McAllen Critics, Obama Target Physician Entrepreneurs

Rep. Jim Cooper, D-TN, says he's not so sure that McAllen is an outlier. "If the issue is self-referral, then the data are pretty clear that physicians are more likely to self-refer when they own the referral facility," Cooper says, citing McKinsey & Co. 2007 report that estimated that physicians make about $8 billion a year with self-referrals.

"When a doctor owns a facility, miraculously, referrals go up," he says. "It's not in the Hippocratic Oath that you should own the referral facilities. In The New Yorker article about McAllen, TX, the evidence is pretty overwhelming. Hopefully doctors would be so ethical that they would not over-refer, but it seems pretty clear that in aggregate they are over-referring."

Ted Epperly, MD, president of the American Academy of Family Physicians, says he won't tell colleagues how to run their practices. But he says a balance has to be struck between the public good and physicians' right to earn a living. "There is going to be a certain degree of experimentation that is going to on with this as we try to find the right balance," he says.