Healthy: Doctors Hospital continues expansion

The young women in navy suits who guide patients to their appointments at Doctors Hospital at Renaissance might appear like just a nice touch in a facility that touts itself as a four-star medical hotel.

But the "guest relations" staffers are really just a cog in a healthcare operation where efficiency is sacred.

Administrators track the time it takes lab technicians to return test results. Extra surgical equipment is kept on hand to save time sterilizing scalpels and clamps between operations.

Since opening as a full-service hospital five years ago, Doctors Hospital has both rapidly expanded in size and steadily increased its share of the local healthcare market. The hospital's management attributes their growth, at least in part, to an efficiency-based model of health care, one which gives the facility one of the fastest patient turnover rates in the state.

Doctors Hospital Chairman Dr. Carlos Cardenas, who founded the facility with eight other physicians as a day surgery center in 1997, said he saw most of the local healthcare industry as inherently inefficient.

"(At other hospitals) we were always being told there was no room in the budget (for new equipment). And if there was, it took six months to get anything done," said Cardenas, who has worked in most of the hospitals in Hidalgo County.

"A lot of the waiting that goes on is waiting for lab results or waiting for a procedure to be done. Here, there are benchmarks that are looked at."

Benchmarks

All that said, how fast is the hospital's health care?

For the five most common ailments requiring hospitalization, patients will on average spend 21.1 percent less time at Doctors Hospital than other Texas hospitals and 25.4 percent less than other hospitals in Hidalgo County, according to data from the Texas Hospital Association.

Doctors there, the majority of whom hold a stake in the hospital's profits, have good reason to get patients in and out quickly.

Like most Rio Grande Valley hospitals, more than 70 percent of their patients are covered by Medicare or Medicaid, which unlike many private insurers only pay flat fees based on diagnoses, not length of stays or number of tests run.

And because the federal programs pay at a far lower rate than a private insurance company, there is even greater motivation to treat as many patients as possible, as quickly as possible.

Despite the shorter hospital stays, though, Doctors Hospital's charges were almost identical to other Hidalgo County hospitals' average for the five most common ailments. In effect, Doctors Hospital patients stay shorter amounts of time but their insurance providers are charged the same amount of money - mostly because Medicare, Medicaid and even some private insurers charge fixed rates for services.

Faster patient turnaround is a longstanding and growing trend in the health care industry, said Roxanne Andrews, a senior researcher at the Agency for Health Care Research and Quality, a division of the U.S. Department of Health and Human Services.

"Technology has changed and they're able to do many procedures which are less evasive," she said. "A shorter length of stay in and of itself isn't something to worry about. The issue is the outcome, whether their mortality rates are elevated."

The rate of death among patients at Doctors Hospital is 7.5 percent below the state average, according to the Texas Department of State Health Services.

Cut-throat competition

Back in 2005, Doctors Hospital billed $641 million, ranking fourth among Valley hospitals, according to the latest data available from the state health department. But in the years that followed, the number of patients treated at Doctors Hospital has almost tripled, with 116,076 patient days projected for 2008, according to Doctors Hospital estimates.

Up until January 2007, the hospital wasn't included in major health insurance networks, which often meant costlier bills for patients and ultimately less traffic for the hospital. Even out of network, the hospital billed almost $158 million to private insurance companies in 2005, second only to Rio Grande Regional Hospital.

The process of joining networks was thwarted in part by South Texas Health System - the area's largest healthcare provider - which threatened to cut discounts to institutions that included Doctors Hospital in their networks.

The skirmish reached a crescendo heading into 2006, when the two healthcare groups traded buyout offers.

Today, Doctors Hospital is within most major health networks, with the exception of United Healthcare with which it is close to working out a deal, said Doctors Hospital CFO Susan Turley.

And the relationship with South Texas Health, while still chilly, has warmed to the point that the two healthcare providers are working together to lobby for more federal funding for indigent health care in the Valley.

Asked about Doctors Hospital's rise, particularly in attracting patients with private insurance now that it's been allowed into major networks, South Texas Health spokeswoman Lisa Killion attributed it to their novelty.

"It's like a new restaurant opens up in town and you want to go there. But there's always the longer standing establishment where the food's good and you've been going for years," Killion said. "That's competition for you."

Dollars and cents

Within the tight circle of physicians with a stake in the hospital, much of the credit goes to construction magnate Alonzo Cantu, the owner of Cantu Construction and chairman of Lone Star National Bank. Cantu built the original surgical clinic and was approached as investor when the original doctors group decided to expand.

"He's the godfather," joked Beto Gutierrez, a family-practice physician at the hospital. "He'll tell you otherwise, but he made all this happen."

When asked about the hospital's business model, Cantu quickly turned the conversation to the hospital's technological advancements, like the addition of a $1.8 million robotic surgical instrument used for prostate operations.

"It's not all about money," Cantu said. "It's about increasing the quality of health care in the Valley. I'm always really picky about having the best, and, yes, there's always a market for quality."

Since opening as a full service hospital in 2003, Doctors Hospital, like most hospitals here, has capitalized on the massive growth in the Valley's healthcare industry through expansion of their facilities, opening both a psychiatric hospital and a women's hospital late last year.

According to Doctors Hospital, its assets have grown from $65 million in 2003 to $303 million today.

Congressional hurdles

The seemingly biggest obstacle facing Doctors Hospital now is on Capitol Hill.

In the last year, three bills were introduced to bar physicians from referring Medicare and Medicaid patients to hospitals in which they hold a stake. The latest, which was pulled from an appropriations bill before the U.S. House last month, would have limited the expansion of doctor-owned hospitals.

"Physician-owned hospitals are a problem because they are being over-utilized," U.S. Rep. Frank Pallone Jr., D-New Jersey, chairman of the Energy and Commerce Subcommittee on Health and a frequent critic of physician-owned hospitals, recently said on the House floor, according to The New York Times. "Physicians are referring patients to these hospitals in many cases for unnecessary procedures."

Cardenas argues that physician-owned hospitals have been unfairly maligned, that existing federal regulations already provide a check on procedure-happy doctors.

"We live in a very regulated environment, more than any point in history," he said. "If a doctor's prone to over-utilization, he's going to be prone to over-utilization anywhere. Hospitals pay doctors based on fees. That's an incentive in itself."

To protect itself, Doctors Hospital has established PACs, or political action committees, at both the state and federal levels.

The Border Health Federal PAC, stacked with $700,000 in cash as of March - the most recent time for which data was available - funneled $85,000 to Democrats last year, including former presidential candidate U.S. Sen. Hillary Clinton, D-NY, and local U.S. Reps. Henry Cuellar, D-Laredo; Rubén Hinojosa, D-Mercedes; and Solomon Ortiz, D-Corpus Christi, according to the Federal Elections Commission.

"We don't give out much money," said Cantu, a fundraiser for the Clintons for years. "We grow the PACs so we can get some respect."

___

James Osborne covers McAllen and general assignments for The Monitor. You can reach him at (956) 683-4428.