Texas Public Policy Backed by Big Money
Immediately after President Barack Obama signed his controversial health care reform legislation that promised to insure 32 million Americans, Republican Gov. Rick Perry of Texas responded with a video slamming the bill, arguing his state is doing a better job than Washington.
“We will do everything in our power to fight this federal excess and find ways to protect our families, taxpayers and providers from this gross federal overreach,” Perry said. “Taking a more Texas-style approach would definitely move this issue in the right direction.”
Unspoken in his rhetoric is the fact that Perry governs the state with the highest percentage of uninsured citizens in the nation.
Texas ranks 42nd out of 50 states for public health care spending per capita, according to a study by the United Health Foundation. The state spends only $51.30 per person on public health programs. There is limited access to prenatal care, and a high percentage of children live in poverty. The study concluded that Texas has so many challenges that the overall health of its citizens is likely to decline. Clearly it is a state with a health care crisis.
The strategy of the national health reform plan was to insure more Americans by expanding Medicaid, create affordable insurance exchanges to lower policy costs, and reform inefficient private health insurance regulations.
Undeniably, the question of how to provide health insurance to more Americans has become a divisive issue nationwide, and that question is especially applicable in Texas.
Although one in four people in Texas are uninsured, the state has become a conservative battleground for some of the most aggressive efforts to repeal the new national health reform.
“Texas historically is at the bottom of the ladder in every category of health and human services spending,” state Rep. Elliott Naishtat (D-Austin) said. “We are stingy and I would suggest mean-spirited when it comes to helping people that need a little help from their government.”
FOLLOW THE MONEY
At the Southern Republican Leadership Conference, days after his video response, Perry further criticized the Obama administration over the new law.
“Washington is telling us what medical procedure you can have and how much of your paycheck you are going to pay for it,” Perry said. “There is this endless struggle between the left and the right, between conservatives and liberals, between democracy and socialism.”
While Perry and other Texas politicians claim their fight against a national health care system is based on the federal government’s overreaching its authority, they have also accepted generous political donations from special interest groups opposed to health reform.
Throughout his political career, Gov. Perry has received millions of dollars in campaign contributions from donors who have opposed health care reform, including $2 million from the insurance industry. Other anti-healthcare-reform organizations, like the Texas Dental Association and the Texas Medical Association, donated $225,000 and $175,000 to Perry, respectively.
Additionally, corporations such as Perry Homes, no relation (though it donated $910,000 to Perry) and Contran Corp ($1.2 million) have also given millions to fund the nonprofit conservative group American Crossroads. Topping the agenda of American Crossroads is the repeal of health care reform. Koch Industries, another opponent of the Obama legislation, has donated $116,000 to Perry.
Republican Sen. John Cornyn of Texas has received $600,000 from insurance companies that oppose health care reform, plus, he has received large donations from a number of the same anti-reform companies as Perry. Cornyn has taken $37,500 from Contran Corp, $19,400 from Koch Industries and $18,000 from Perry Homes.
Cornyn has sponsored the Health Care Bureaucrats Elimination Act, which attempts to repeal the Independent Payment Advisory Board, which was created by the Obama administration to find solutions to rising Medicare costs.
Additionally, Cornyn and fellow Texas Sen. Kay Bailey Hutchison co-sponsored a bill to repeal the health care reform legislation entirely. Hutchison also sponsored a separate bill to suspend implementation of the national health care reforms until rulings on lawsuits filed by several states that claim the law is unconstitutional are made.
Hutchison has taken nearly $1 million from health professionals, plus an additional $651,000 from insurance companies, for her campaigns.
Texas is a model of the problems created when politics and progressive health care policies collide. Gov. Perry and other conservative legislators in the state have implemented spending cuts to public health care services, even though their state is in great need of that care. They have also proposed and implemented alternative plans to health care reform, rather than enforcing it.
Gov. Perry has bragged that, unlike the federal government, Texas was able to balance its budget. To accomplish this, Perry cut billions from health care and education but left $6 billion in the state’s rainy-day fund. The legislature also failed to fully fund Medicaid by $4.8 billion, but they promised to come back and deal with the shortfall in two years.
Dan Stultz, CEO of the Texas Hospital Association, said the push to cut health care services became more urgent after the last election. “My opinion is the first-time legislators felt like the voters sent them a mandate of no new taxes, to be very conservative,” he said.
“I would have to say when the new conservative Tea Party movement came to Texas, led by Gov. Perry, things changed,” said Anne Dunkelberg, associate director of the Center for Public Policy Priorities.
One of the more controversial bills pushed by Perry asks the federal government to allow Texas to create its own health care system. It would be formed with federal funds from Medicaid and Medicare using a device called an interstate compact.
“One of the things that we noticed about the interstate compact law is that it doesn’t propose to do anything about our 6.4 million uninsured,” said Dunkelberg. “It basically says we want the freedom to deal with the people who are getting publicly funded health care the way we want to; not subject to any federal standards.”
Some representatives in the Texas legislature were exasperated by the state’s conservative health care policies. “It is frustrating when you are trying to solve a policy problem and people are just doing politics,” state Rep. Garnet Coleman (D-Houston) said. “These solutions are only presented as an alternative to the solution that has already been passed, to make that solution seem less desirable.”
By opting out of the national health care reform for the interstate compact, Perry could be forfeiting more than $120 billion in potential federal funds over time.
“It seems silly when you have a state like Texas, that has the biggest opportunity to gain the most in federal dollars, and many of the politicians are against it,” David Cutler, a Harvard health economist, said. “It’s against their interest.”
THE MCALLEN PROBLEM
If Texas strongly illustrates the health care crisis in the U.S., then the southern border town of McAllen is a microcosm of the problems created when party politics mixes with health care policy.
It is no accident that President Obama made an example out of the town in his speeches, calling it “The McAllen Problem,” after a 2009 New Yorker article claimed the city was guilty of overusing medicine.
In McAllen, the average cost of care for a 2007 Medicare patient was $15,695, which was 81 percent higher than the national average ($8,682), according to a Dartmouth Atlas of Health Care study. The study found that between 1992 and 2006, the rate of per-patient Medicare spending in McAllen was the highest in the nation, growing by an average of 8.3 percent a year, versus the national average increase of 3.5 percent.
Dr. Lester Dyke, a cardiologist in McAllen, said he lost around 70 percent of his practice when local doctors refused to refer patients to him after he spoke out publicly about the town’s overuse of medicine. Dr. Dyke believes that the political resistance against changing the current system in McAllen is a by-product of the relationship between politicians and special interest groups.
“This issue will never be solved because politics runs on money, and if enough of the right politicians are given enough money you can get away with anything,” Dyke said.
DOCTORS AND DONORS
While Gov. Perry has been criticizing Washington and claiming his policies have lowered health care costs, he has been taking large campaign contributions from McAllen doctors.
Border Health, a PAC that donates to both parties, is an organization whose donors are doctors from a local physician-owned hospital in McAllen. Since 2005, it has given $225,000 to Perry and another $230,000 to Lt. Gov. David Dewhurst, according to the Sunlight Foundation. Since 2004, Border Health has raised more than $2.5 million and contributed hundreds of thousands of dollars to dozens of federal and state politicians.
“If the government is going to be paying doctors and hospitals to do work, there needs to be a lot of oversight, and they need to be very tough,” Dyke said. “They need to be independent of politicians that may call to, say, lay off this doctor, or this hospital, because they were given a lot of money.”
McAllen has a population of about 130,000 people; 27 percent of them live below the poverty level and 34 percent are uninsured. Despite being a small town, it has five major hospitals.
According to the Dartmouth Atlas study, McAllen ranks second on the list of the most expensive U.S. health care markets. However, it is not the only area to stand out in Texas: Of the 22 health care markets in the state (designated by hospital referral region), 15 were above the national average for per-patient Medicare spending.
Texas also has more physician-owned hospitals than any other state.
The Border Health PAC and other physician-owned hospital groups have been firmly against national health reform because, effective in 2012, the legislation bans new physician-owned hospitals from receiving Medicare certification. It also severely limits the expansion of the existing facilities.
The restrictions were created to counter the inherent conflict of interest that doctor-owned hospitals can create. Because the participating doctors share in their hospitals' overall profit, there is a built-in incentive to refer patients to specialists within the hospital, run extra tests and procedures, and, as a result, drive up billing to increase profits.
“Right now we have sort of an unrestricted system where the more you do the more you make, and that is obviously not a good system,” Dyke said. “When you have fraud in medicine, especially in a community like this where most of the patients are insured by Medicaid or Medicare, and any doctor or business entity overbills — and believe me it is rampant — they are taking money from you and me.”