Brownsville, Texas: Tale of A Two Hospital Town

Brownsville, Texas is located on the southern most tip of Texas bordering Mexico  22 miles from the Gulf of Mexico. The population exceeds 200,000 during the day, slightly less at night. 

The  two main  hospitals in town, Valley Baptist and Valley Regional Hospital compete  for patients . Part of the strategy of hospitals  to attract patients is to join various PPO networks that promise steeragy, yet  in the case of Brownsville both hospitals belong to essentially the same networks.  As a result, PPO steerage is not a factor in Brownsville.

Brownsville Independent School District  (BISD) is the town’s largest employer. The BISD group health plan spends over $45 million annually towards employee health care, most of which is spent locally.

A look at claim untilization of the Brownsville Independent School District over the past several years is intriguing. Prior to Valley Baptist purchasing Brownsville Medical Center (BMC), it appears that BISD utilization at BMC was 2 to 1 over Valley Regional Hospital, i.e, most BISD hospital care was at BMC. Then, after Valley Baptist purchased BMC, the utilization between the two hospitals apparently did an 180 degree turn, favoring Valley Regional Hospitald 2 to 1 over Valley Baptist.

What caused the added steerage to Valley Regional Hospital? With both hospitals on the same PPO network used by the BISD there is no incentive on the part of BISD plan participants to choose one hospital over the other since the in-network plan benefits are the exactly the same  at either hospital.

Since PPO steerage is not a factor, could the source of steerage be local physicians who direct care? And if that is the case, why has steerage changed between the main two local hospitals? Better care and equipment at one hospital? Or financial incentives?

Editor’s Note: To our knowledge, the BISD has never studied nor quantified their health care costs at either hospital accurately.  Rather, the BISD has relied on expert consultants, audit firms, and PPO representatives for advice as to claim costs. Unfortunately, these experts have not benchmarked claim costs at either hospital using Medicare/Medicaid benchmarking. Instead all have relied on claim “discount” methodologies which utilizes proprietary, arbitrary and inflated billed charges against illusory discounts.


From a Dallas reader:

Bill, 8,000 employees, $40,000,000 they could buy their own hospital and make money of the PPO!

Editor: Yes, forget about on-site medical clinics, they could actually build their own employee hospital with that kind of money.