Texas-Sized Health Care Problems Offer Pros, Cons of Reform Policy : Medicine: Almost 26% of Lone Star State residents under 65 have no health coverage. Yet many say the price of covering everyone may be too high.

AUSTIN, Tex. — The Texas Medical Center in Houston, the nation’s largest and richest health complex, pours $4 billion a year into cutting-edge research and care. Insured patients at Houston’s Methodist Hospital are met with valet parking, uniformed bellhops and a 24-hour concierge.

Dallas has more multimillion-dollar magnetic resonance imaging machines than the entire country of Canada--and Houston has even more than Dallas.

Yet in West Texas, there is a county the size of Connecticut that does not have a single primary-care doctor. Better than one in four Texans under age 65 has no health coverage. Third World diseases are rampant along the Mexican border. At Houston’s public hospital, it is not unusual for a seriously ill patient to have to wait 24 hours for a bed.

It would be difficult to imagine a place that better embodies the breathtaking achievements of modern American medicine--and its tragic failures--than Texas. That is why this state offers a unique road map of the opportunities and the pitfalls that lie ahead as President Clinton and Congress seek to come up with a way to fix what is wrong with the current system while preserving what is right.

“What we have here is a plan (Clinton’s) that has some very good parts and some other parts that are just not doable in Texas,” said Dr. Robert Tenery, president of the Texas Medical Assn., one of the most powerful and conservative statewide physicians organizations in the country.

No state welcomes Clinton’s promise of universal coverage more eagerly. Almost 26% of Texans under 65 have no health coverage--nearly the worst record of any state. One out of every 10 uninsured Americans is a Texan.

Yet many here say they fear that the price of covering everyone could be too high--particularly if the state’s employers, which have only just begun to shake a decade-long economic downturn, are forced to bear the brunt of it.

And a plastic card guaranteeing access to health coverage is useless if there is nowhere to take it, as is true across vast stretches of this sprawling state. Nor will it cover the hundreds of thousands of illegal immigrants whose care cost state and local governments in Texas $94 million last year.

While polls show strong public sentiment here for major change in the health care system, it remains to be seen whether most people will be willing to give up their current insurance. Cost-saving concepts such as health maintenance organizations and managed care, in which consumers are limited to networks of doctors who offer cut-rate prices, have only begun to take root in Texas.

The majority of Texans who have coverage are not at all sure they want to give up what they see as unrestricted access to the best that medical science has to offer--particularly if it is in favor of a program that comes to them from Washington.

“I think people in Texas, probably as much or more than any other place in the country, are very skeptical of a government that’s coming to give us something,” said Sen. Phil Gramm (R-Tex.). “We have not found government to be a bearer of great gifts.”

Gramm said no one opposes universal health care coverage in principle. “The problem is how to pay for it,” he said, “and how to find the sources of paying for it in a way that does not disrupt the economy.”

The Texas economy is built on small, low-paying, non-union firms--the very kind that are unlikely to offer health coverage as an employee benefit.

In addition, many poor, non-working Texans must go without coverage because the state has one of the nation’s stingiest Medicaid programs. A single mother with two children does not qualify for Medicaid if she earns more than $2,200 a year.

Nonetheless, the uninsured do get health care, and it is often in the expensive setting of the emergency room.

The costs of treating the uninsured show up in the inflated prices that hospitals charge their insured patients and in the strained budgets of state and local governments. Medicaid spending alone has grown by more than one-third since 1993.

“Paying for health care is killing us,” Democratic Gov. Ann Richards said.

The Clinton Administration says its reforms would help by controlling health care costs generally and requiring businesses to pay up to 80% of the cost of insurance for their workers. Altogether, it says, Texas would save at least $3.3 billion between 1996 and the year 2000.

State officials are dubious. Richards said she wonders whether the net result would be additional costs for Texas.

Her doubts are echoed by other state officials. “We’re certainly leery of the numbers,” said Democratic state Sen. John T. Montford of Lubbock, chairman of the chamber’s Finance Committee. “I think it’s going to be significantly more costly than what they are anticipating.”

Just as troubling to many Texans is Clinton’s plan to shift the primary burden for health care costs to businesses. His proposed requirement that employers dedicate up to 7.9% of their payroll costs to workers’ health coverage is sending shudders through a state where three-quarters of the work force can be found in businesses that employ fewer than 100 people.

Texas is only beginning to recover from the oil bust of the early 1980s, and people here take seriously the National Federation of Independent Business’ dire warning that employer mandates could cost the state over a million jobs.

Don Summers provides a case in point. As proprietor of a small welding business in Austin, he was paying $911 a month for health insurance for his six workers until a few bad breaks--a drug-abusing employee, a problem birth and Summers’ own wife’s chronic illness--more than quadrupled his rates and forced him to cancel his policy.

Summers, 61, made two trips to Washington in 1992 to plead with congressional committees to make health coverage more affordable. Now that he has seen the White House proposals, he wonders if he should not have left well enough alone.

“Mr. Clinton’s idea has taken our request for help and turned it into a gun to our heads,” he said. He estimates that the burden of paying 7.9% of his payroll for health insurance (his company’s average salary is slightly too high to qualify for federal subsidies) would wipe out two-thirds of his profit.

Texans also wonder whether having a plastic card entitling them to health care will make much difference to people in the 87% of the state’s counties that, according to the Texas health commissioner, do not have enough medical facilities and personnel.

In Leakey, the seat of Real County, for instance, people must drive 45 miles to the nearest Wal-Mart store just to get a prescription filled. Those too sick or poor to make the trip must hope that one of their neighbors happens to be listening when the pharmacist uses the public address system to ask if anyone in the store can deliver the medicine.

“We lose people. They die from lack of medical services,” County Judge G.W. Twilligear said.

Susie Casillas, now five months pregnant, has almost miscarried three times--and in each emergency has had to drive 65 miles from her home in Sonora to the nearest obstetrician in San Angelo. “We have a nice operating room in our hospital” in Sonora, she said, “but it’s used for storage.”

Although the Clinton plan has incentives for doctors and other medical workers to practice in underserved areas, officials in the state doubt that an adequate health care network would rise from the dust in the vast expanses of rural Texas.

“Unless Dairy Queens are going into the business of health care, we’ve got a problem,” state Health Commissioner David R. Smith said. “There’s nothing else out there.”

Nor has experience inspired rural Texas’ confidence in any system that comes from Washington.

In the quarter of a century that Dr. Jim Bob Brame has practiced in the West Texas town of Eldorado, he has been known to drive 90 miles to make a house call in Crockett County. Mostly, though, sick people try to go to his 16-bed hospital, with its emergency room.

A few years ago, when Brame admitted a 76-year-old rancher who had pneumonia and lived alone 25 miles outside of town, Medicare disallowed the expense as unnecessary. “Those types of things make us very, very skeptical of anything the government is running,” Brame said.

Community health centers and public hospitals now struggle to fill the gaping holes in the fabric of the Texas health care system. Their budgets could shrink dramatically if Washington cuts back federal funding.

Texas’ public hospitals could lose $1.2 billion in “disproportionate share” payments--government subsidies for institutions that provide large amounts of free care. While the amount of free care would drop sharply under universal coverage, public hospital officials said many needy people would continue to show up in their waiting rooms.

“You could pull out all the underpinning and the whole system could collapse,” said R. King Hilliard, director of government relations for Houston’s Harris County Hospital District.

Also of concern to Health Commissioner Smith is the fate of public health spending. The Clinton proposal calls for many initiatives but does not guarantee funding for them.

“In Texas, we have the biblical diseases,” Smith said. “We have plague, TB, leprosy and rabies, and they’re epidemic. Even a plastic card, an emergency room and access to a CAT-scanner aren’t going to fix those. It will take good water, sanitation and a public health infrastructure.”

DeAnn Friedholm, Texas’ Medicaid director and a member of the task force that helped devise the Clinton plan, said Texas’ diversity makes it the most difficult state to implement health reform.

Yet, she said, referring to Clinton’s proposal: “I’d rather be struggling with making that one happen than continuing to struggle with what we struggle with today.”