Owner's Box

Chapter 2: Patient A

Half a century ago, El Paso boasted several not-for-profit hospitals, including Hotel Dieu and Providence Memorial Hospital. At that time, the great majority of hospitals were run by charitable organizations or public entities. In addition to the altruistic and often religious motive, patient care was at the heart of hospital dollars in El Paso.

60 years later, nearly all of the inpatient hospital beds available in El Paso are run by for-profit corporations. Now, profit lies at the heart of the private health care delivery system. Overcharging and overutilization of services form the bases for some of the highest health care costs in the nation. Sierra Medical Center and Providence Memorial Hospital—owned by Tenet Healthcare Corporation since 1995—are two of the leading profit centers in the entire U.S.. In fact, the three most expensive hospitals in Texas are Brownsville Medical Center, Sierra Medical Center in El Paso, and Providence Memorial Hospital in El Paso. They were ranked as the #8, #37 and #46 most expensive hospitals in America. All three are owned by Tenet Healthcare Corporation (“Tenet”).

What does this mean for El Paso? Let’s look at an example. An El Paso citizen, who was experiencing chest pains (“Patient A”), was admitted to Providence Memorial Hospital earlier this summer. It turned out that Patient A was not having a heart attack, and therefore, surgery or any other major procedure was not necessary. In fact, the only procedure performed was an angioplasty and Patient A was released within two days without any incident.

A short time later, to his dismay, Patient A received a statement from Providence Memorial Hospital for $101,456.67. The only thing more shocking than the amounts that Providence Memorial had charged for a relatively minor procedure was how much the hospital adjusted the charges for Patient A’s insurance company, Blue Cross Blue Shield of Texas. The insurance company paid $7,332.02—about 7 percent of what Patient A had initially been charged.

Unfortunately, Patient A’s experience is not unique; it merely shows why medical costs are out of control in America.

Here’s another example of Tenet’s true motivation. In June 2006, the Department of Justice reached a settlement with Tenet Healthcare Corporation (“Tenet”) to pay the U.S. more than $900 million to resolve False Claims Act allegations related to Medicare fraud. Of the $900 million settlement amount, the agreement requires Tenet to pay:

  • more than $788 million to resolve claims arising from Tenet’s receipt of excessive “outlier” payments (payments that are intended to be limited to situations involving extraordinarily costly episodes of care) resulting from the hospitals inflating their charges substantially in excess of any increase in the costs associated with patient care and billing for services and supplies not provided to patients;
  • more than $47 million to resolve claims that Tenet paid kickbacks to physicians to get Medicare patients referred to its facilities, and that Tenet billed Medicare for services that were ordered or referred by physicians with whom Tenet had an improper financial relationship; and,
  • more than $46 million to resolve claims that Tenet engaged in “upcoding,” which refers to situations where diagnosis codes that Tenet is unable to support or that were otherwise improper were assigned to patient records in order to increase reimbursement to Tenet hospitals.

And as many of you might remember, Tenet spent hundreds of thousands of dollars trying to kill our new Children’s Hospital, another “public option.” Upon review of reported political contributions and expenditures, Tenet spent at least $285,194.21 to oppose the Children’s Hospital Bond in 2007—this figure does not include the thousands of dollars Tenet spent to advertise their children’s wing as “The Children’s Hospital at Providence.”

Total Political Expenditures in Opposition of Children’s Hospital Bond

Reported Political Expenditures: Oct. 2007 Reported Political Expenditures: Nov. 2007 Reported Political Expenditures: Dec. 2007 Reported Political Expenditures by Jan. 2008 Total Political Expenditures
Tenet Healthcare Corporation $86,646.29 $100,000* $98,547.92 $285,194.21
Texans for Fiscal Responsibility $43,856.269
(received $43,860 political contribution from Empower Texas)
+ $55.030 in reimbursement payments to Empower Texas
= $100,000
Luis A. Ayo, M.D. $7.668.81 $7.668.81

*Political Contribution by Tenet to Texans for Fiscal Responsibility as reported by TFR in their campaign finance report.

Let’s look at some other numbers. As the chart below shows, the average cost of cardiac care at Providence Memorial Hospital is more than $15,000 per day, and at Sierra Medical Center, it’s more than $18,000 per day. At R.E. Thomason General Hospital (now known as University Medical Center of El Paso)—the “public option”—it’s less than $4,000 per day.

Average Cost Per Day in El Paso Hospitals for Heart Attack Care

Average Cost Per Day in El Paso Hospitals for Heart Attack Care

In other words, these Tenet-owned hospitals charge about four times what the public hospital charges. To protect these profit margins, Tenet spent hundreds of thousands of dollars to try to kill the Children’s Hospital bond. And this is why a licensed not-for-profit Children’s Hospital will deliver so much more value for your dollar.

Here in El Paso, in so many ways the frontier of the future, our citizens experience daily the hundred reasons why we need health reform now. One in three in El Paso has no health insurance. We have fewer doctors per capita here than in any large city in America. High health costs are redistributed among those who can least afford it.

From the mother in Montana Vista who drives forty miles round trip to have her son’s broken arm set to the single mom with two children who has health insurance, but it’s not enough—so she is now in Chapter 13, paying what she can over time. From the state representative, who gets an appendectomy in Juarez because he bought a “bare bones” policy to the middle aged professional who changes jobs but must leave his health coverage behind.

El Paso needs reform now.