McAllen health care among most expensive in nation, magazine says

McALLEN — A story in this month's New Yorker magazine reveals that McAllen is one of the most expensive health-care markets in the country, with Medicare spending an average of $15,000 per enrollee here - nearly twice the national average.

The article, penned by surgeon, writer and Harvard Medical School professor Dr. Atul Gawande, explores why Medicare costs per enrollee are so much higher here than almost anywhere else in the country.

Only Miami, which has higher costs of labor and living, has higher per-capita Medicare costs than McAllen.

The story relies heavily on anonymously sourced doctors, as well as economists and analysts, who ultimately suggest that the "entrepreneurial spirit" of medical professionals here - who often collect fees for referrals and perform tests and procedures that may not be entirely necessary - plays a role in the high costs.

Gawande compares McAllen with El Paso, another border city with similar demographics. He notes that from 2001 to 2005, critically ill Medicare patients here received nearly 50 percent more specialist visits than those in El Paso.

McAllen patients received one-fifth to two-thirds more gallbladder operations, knee replacements, breast biopsies and bladder scopes than those in El Paso, the author writes, and Medicare paid for five times as many home-nurse visits.

"The primary cause of McAllen's extreme costs was, very simply, the across-the-board overuse of medicine," Gawande reports.

"(M)cAllen and other cities like it have to be weaned away from their untenably fragmented, quantity-driven systems of health care, step by step," he concludes.

The local medical community's reaction to Gawande's story was "irate," said Dr. Linda Villarreal, an Edinburg internist and former president of the Hidalgo-Starr County Medical Society.

"If you're looking at the cost of medical care delivery, you have to incorporate a lot of issues (regarding) how things are done in our area," she said.

Villarreal said Medicare costs are high here largely because of doctors' fear of malpractice suits. Those fears continue despite a 2003 tort reform law that put a $250,000 cap on non-economic damages.

"In spite of tort reform, in Hidalgo County, we still practice ‘legal medicine' - it involves covering your butt," Villarreal said.

She said doctors order tests even if they might not be entirely necessary to ensure they are free from liability - which contributes to the higher costs.

But, she conceded the problem with excessive testing "could be improved upon."

Gawande's secretary said he was unavailable for comment Wednesday.

Nor were many of the people he quoted in the story.

Gilda Romero, the chief operations officer of McAllen Heart Hospital - who was quoted in Gawande's story - did not return phone calls Wednesday.

Eddie Saenz, chairman of the board of South Texas Health System, said he had not read the article as of Wednesday.

A spokesman for Rio Grande Regional Medical Center did not comment on the story Wednesday and did not make CEO Greg Seiler available for an interview.

And Joe Riley, CEO of McAllen Medical Center, did not return calls Wednesday.

Carlos Cardenas, chairman of the board of Doctor's Hospital at Renaissance, also took umbrage at parts of the article.

He said the author failed to take into account the history of the McAllen area.

"I don't know if you can fly in for two or three days and know where the community was a generation ago and where it is today," Cardenas said, adding that it's only natural to see costs go up as the quality of care in the Valley has increased in recent years.

"As the community has grown and as technology has increased, our use of the technology increases," Cardenas said.

He also said he didn't think Doctor's Hospital should be lumped in with the conclusions about the rest of the area, since it has only existed for five years - only one of which was included in the analysts' data.

Gawande's article only touches briefly on outright Medicare fraud, but that may be a contributor to the costs as well.

Earlier this year, Universal Health Systems disclosed that federal authorities are investigating employment practices and referral procedures at its South Texas Health System subsidiary.

A separate federal probe is examining South Texas Health System employees who allegedly obstructed the Medicare and Medicaid fraud investigation, according to company disclosures filed with the SEC.

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Ryan Holeywell covers McAllen, PSJA, the Mid-Valley and general assignments for The Monitor. He can be reached at (956) 683-4446.