by James Thompson

According to Project Vote Smart, Border Health, Laurence Hirsch and James Flores were tied to be Greg Abbott’s 16th highest political contributors at $100,000.

Texas monthly writes about Border Health PAC:

“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 PAC’S initial treasurer was Dr. Carlos Cardenas, a physician on the Doctors Hospital at Renaissance Board of Managers. The hospital was constructed by Alonzo Cantu, a successful Valley real estate developer who was known nationally as a “bundler” for Secretary of State Hillary Clinton during her presidential campaign. Cantu remains a key investor in the hospital. His involvement in blocking federal legislation banning doctor-owned facilities was highlighted in a 2007 Washington Post profile.

The Doctors Hospital group is obviously well connected: Its board hosted Speaker of the House Nancy Pelosi in 2007 for the grand opening of its new Women’s Hospital. (Cantu made her trip worthwhile, as he personally contributed $6,600 to the Democratic Congressional Campaign Committee that month.)

And former Texas comptroller John Sharp, now a Democratic candidate for the U.S. Senate, owns a small stake in the hospital.  He has also contributed $250 per month since November 2005, to the Border Health PAC. That  same month Governor Rick Perry named Sharp chairman and Cantu a member of his tax reform commission. Sharp has also contributed $250 each month to the federal Border Health PAC. There are others who make clockwork-like contributions like Sharp’s–Cantu, for instance has sent a $250 check each month since August, 2004, as has Doctors Hospital CEO Lawrence Gelman. Cardenas said in a phone interview that all owners are encouraged, but not required to give to the PAC. The PAC has received authorization to draw a certain contribution from each owner, but Cardenas says there is no link between those sums and the hospital’s profits.

Sharp, who is an announced candidate for the U.S. Senate seat that Kay Bailey Hutchison will give up this fall, said his contributions to the PAC do not mean he agrees with the positions advocated by the group. As for the proposed federal ban on doctor-owned facilities, Sharp said, “It is not on my radar screen.” He said he signed up to make regular contributions to the PAC at Cantu’s request, and said he believed most investors did as well. “See, they have these deals at banks where you can automatically deduct,” he told me. “It’s no different than any other PAC.”

He also noted that Cantu has not held a fundraiser for him in his current race. According to news reports, Cantu held an event for Sharp’s opponent, Houston mayor Bill White, to meet community leaders.

The largesse of the Border Health PAC is significant. Since 2006, here are some of its beneficiaries: in the Texas Senate, Juan Hinojosa, $125,000; Judith Zaffirini, $50,000; Eddie Lucio, $25,000; in the House of Representatives, Richard Raymond, $20,000; Yvonne Gonzales-Toureilles, $20,000; Veronica Gonzales, $22,500, Flores, $42,500. Perry picked up $75,000 during the same period, and Lieutenant Governor David Dewhurst and former House Speaker Tom Craddick both netted $25,000.

Undoubtedly, political influence has been brought to bear on the federal issue of physician-owned facilities and the state issue of managed care. So should lawmakers revisit the issue of extending managed care for Medicaid in the Valley?

State representative John Zerwas, who oversaw the state health care budget for the House this spring, says he advocated moving to managed care in the Valley to take advantage of the estimated cost savings, but Valley lawmakers “would have none of it.” Zerwas, a physician, says, “There is no doubt that managed care makes costs go down. The question is what will that do to the hospitals and the docs?” The delivery system in the Valley is “fragile,” he said.

Still, given evidence of “overutilization” of medicine dramatized by the New Yorker article, he said “It should be a wake-up call to practitioners in the Valley to recognize that the single biggest driver of the cost of care is the pen in their hand.”

Coleman, who is leading a group of state lawmakers making recommendations for national heath care reform, recently met with representatives of Doctors Hospital. “I was chagrined that Texas was being used as an example of the worst in terms of costs, particularly when we have the most uninsured. A change needs to occur in how health care is delivered in Hidalgo County.”

But he cautioned against a “knee-jerk” reaction, like banning physician-owned facilities or switching to a traditional managed care system that does not take into account the region’s unique mix of poverty and chronic illness.

Cardenas argued that the Valley has needed its current system for Medicaid administration—primary care case management, which allows many medical procedures to be billed as “fee-for-service”—because its population is more spread out, poorer, and more sickly than is characteristic in other areas of the state. Adopting the managed care system of the state’s other metro areas might realize savings, but would also result in poorer care for patients, Cardenas said. It is not immediately clear why managed care would not work in these circumstances.

Senator Steve Ogden, chairman of the Texas Senate Finance Committee, says he’s always believed managed care would trim health care costs in the Valley. But, he acknowledged, “Valley legislators line up uniformly opposed to it. It was not a fight I took on because there wasn’t anything I could do about it.”

This is how the system works: The politicians who get huge contributions from the Border Health PAC protect the status quo, the doctors continue to order expensive medical procedures, and the money rolls in. The question is whether, given the spotlight shone on the Valley by the New Yorker and now by the New York Times (“ Texas Hospital Flexing Muscle in Health Fight ”) the question is whether the status quo can be changed in the face of resistance from the region’s delegation. Says Ogden: “There are some providers using poor people to make a lot of money. And I think South Texas is probably ground zero for that.”

Forbes magazine wrote this about Laurence Hirsch:

Mr. Hirsch is Chairman of Highlander Partners, a private investment company. He has served as Chairman of our Board of Directors from July 1999 to the present and also served in that capacity from January 1994 through December 1997. He was our interim Chief Executive Officer from April 2003 through September 2003. Mr. Hirsch is a member of the Executive Committee of our Board of Directors. Until his retirement on March 31, 2004, Mr. Hirsch served Centex Corporation in various capacities, including as President beginning in 1985, as Chief Executive Officer beginning in July 1988 and as Chairman of its board of directors beginning in July 1991. Mr. Hirsch served as a director of Belo Corp. from August 1999 through January 2008 and continued as a director of A. H. Belo until May 2011. Mr. Hirsch served as a director of the Federal Home Loan Mortgage Corp. (Freddie Mac) from November 2009 until February 2012. Mr. Hirsch is currently Chairman of the Center for European Policy Analysis.

Forbes magazine wrote this about James Flores:

James C. Flores, Vice Chairman of the Board of the company and President and Chief Executive Officer of Freeport-McMoRan Oil & Gas LLC, our wholly owned subsidiary, since June 2013. Former Chairman of the Board and Chief Executive Officer of Plains Exploration & Production Company from its inception in December 2002 and President from 2004 until acquired by the company in 2013. Chairman of the Board of Plains Resources, Inc. (now owned by Vulcan Energy Corporation) from May 2001 to June 2004 and current director of Vulcan Energy Corporation. Chief Executive Officer of Plains Resources, Inc. from May 2001 to December 2002. Co-founder, Chairman, Vice Chairman and Chief Executive Officer at various times from 1992 to January 2001 of Ocean Energy, Inc., an oil and gas company.

Mr. Flores owns a “mega-mansion” located at the corner of River Oaks Blvd. and Inwood in Houston. This is the heart of River Oaks, the most exclusive neighborhood of the wealthiest Houstonians. The mansion boasts 28,000 ft.² and is valued at nearly $19 million.

Texas voters should remember these contributors to Greg Abbott’s political campaign when they cast their ballot in November.