Playing Politics With Health Care In Texas

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In yesterday’s New York Times, columnist Ross Douthat held up Texas as “model citizen” in this difficult economy. And while I’ll take a back seat to no one in my regard for my home state, I have to take issue with Douthat’s suggestion that President Obama should be looking to Texas as he tries to figure out a way to fix health care. As I’ve written before, the state offers some of the best examples of what is wrong with health care in America; it has the highest rate of uninsured in the country, and an insurance market that can charitably be described as a mess. Atul Gawande’s often-cited New Yorker piece earlier this year spotlighted the border city McAllen as a textbook case of a medical system gone crazy. This kind of excess is not only wasteful but tragic, considering that McAllen is in one of the poorest areas in the country, a place with so many unmet needs.

But in the past week, we’ve seen a couple of articles that help us understand why. And it turns out to be about politics. Specifically, about political connections and money:

On July 29, New York Times writers Kevin Sack and David Herzenhorn took a close look at the millions that those connected with physician-owned Doctors Hospital at Renaissance in McAllen have been pouring into the campaign coffers of national politicians:

Disclosure reports show that about 220 donors from the McAllen area contributed to the Senate Democratic committee for the March event. Receipts totaled at least $425,000, about 2 percent of the group’s collections for the first half of the year.

“We’re not naïve,” said Dr. Ambrosio Hernandez, a pediatric surgeon who gave $5,000. “We understand that politics plays a role in everything.”

What’s important to know as we follow the health care debate, however, is that many of the key decisions are being made not in Washington, but rather, in state capitals. In Austin, it would appear that Rio Grande Valley’s medical-industrial complex is getting an even better return on its investment. Writing in Texas Monthly, my good friend Patricia Kilday Hart connects the dots.:

But it is not just doctors who are responsible for the high cost of medicine in McAllen. As extensive as Gawande’s reporting was, his focus on medical issues missed an important part of the story. The cost conundrum Gawande wrote about did not come about by happenstance. It is the result of the confluence of medicine, money, and politics that is unique to the Valley.

The political influence of Valley lawmakers has shielded the region’s health facilities from the scrutiny endured by their peers in every other metro area of the state. Only in the Valley is Medicaid not subject to a state-mandated managed care system for Medicaid patients. While Gawande focused on a different program–Medicare–the state’s Health and Human Services Commission (HHSC) has calculated that extending managed care to the Valley would result in considerable savings: $137 million over the next four years.

Why hasn’t this savings been realized? The short answer is: because of politics. The key actor was state representative Kino Flores, who was recently indicted by a Travis County grand jury for failing to report his sources of income on Personal Financial Statements he filed with the Texas Ethics Commission over the past six years. During the 2003 legislative session, when state budget writers faced a $10 billion hole, he amended Arlene Wohlgemuth’s mammoth revision of health care policy to prohibit HHSC from implementing managed care in the Rio Grande Valley. (He wasn’t the first to advocate the position: Houston representative Garnet Coleman sponsored similar amendments in the early days of managed care.) Since then, Valley lawmakers have fought uniformly and vigorously against changing the state’s policy–despite the savings estimates by HHSC.

In the years after Flores passed his amendment that has proved to be so lucrative for Valley hospitals, he received, according to the indictments, a retainer from McAllen Medical Center from 2004 to 2008.

That Flores began receiving a retainer from a hospital directly affected by his legislation apparently was no isolated arrangement for the seven-term lawmaker: The indictments also cite other retainers from big vendors who benefited from public works projects he championed. (A spokeswoman for McAllen Medical declined to respond to questions about Flores’ work or the hospital’s position on managed care.) And McAllen Medical has other political ties: State senator Juan Hinojosa, for example, has represented the hospital as local counsel in two cases.

A well-funded political action committee has augmented the region’s political influence. The Border Health PAC, whose contributors are closely associated with Doctors Hospital, has contributed $940,000 to state and local candidates and now boasts a war chest in excess of $1 million.

The whole article is worth a read. It shows that Douthat is right: Texas is indeed a “model” for health care in this country. That’s part of the problem.