Rick Perry’s Texas: It’s Better to Create More Jobs Than More Medicaid Dependents

Rick Perry’s Texas: It’s Better to Create More Jobs Than More Medicaid Dependents

Key Points:

Texas has a significantly higher rate of uninsured residents, and a somewhat less expensive Medicaid program, than the national average.
These conditions have not resulted in poor outcomes: In both health-system outputs and causes of mortality, Texas generally performs as well as other states.
Therefore, throwing more money at health care in Texas is unlikely to improve health outcomes.
Americans have voted with their feet, fleeing states with more expensive Medicaid programs and more “universal” insurance coverage in favor of Texas, which has a superior record of creating jobs.
As Texas governor Rick Perry makes a splash in the Republican presidential primaries, one place where people are looking for evidence of poor executive leadership is his record on health care. Fellow conservatives have focused on his 2007 executive order that girls entering grade 6 should receive a vaccine, Gardasil™, which protects against the Human Papilloma Virus (HPV).

Although this is a valid criticism, it is hardly relevant to Perry’s presidential campaign: The policy was overturned by the legislature before the school year began, and Perry has already regretted the order. Especially given his commitment to the 10th Amendment, there is no likelihood whatsoever that Perry believes it within presidential power to issue such an executive order for the entire nation.

A criticism that will likely carry more weight as the campaign develops is Perry’s record on Medicaid and the uninsured. We see this in an article written by Noam N. Levey in the Los Angeles Times, which declared that Texans’ access to health care is “withering” under Perry.1 As Levey notes, Texas has the highest rate of uninsured in the nation, over one quarter of the population. This is important, but not in the way Levey believes.

Avik Roy, of The Apothecary blog, has published a comparison of various health-related measurements in Texas and Massachusetts.2 Roy’s goal is to describe the differences between Rick Perry’s policies and those of Mitt Romney.
Drawing upon a number of sources, Roy concludes that:

Health-insurance premiums have grown significantly slower in Texas than Massachusetts, from 2003 through 2009.
Medical-malpractice claims were significantly lower in Texas than Massachusetts in 2010. The proportion of the population without health insurance is significantly higher in Texas than Massachusetts.Hospital admissions, emergency-room visits, and inpatient days were somewhat fewer in Texas than Massachusetts.Texas has far fewer Medicaid dependents than Massachusetts does, and spends significantly less per dependent than Massachusetts does.

Roy concludes that the data on Medicaid and health insurance confirm our ideological biases: Those who believe more government spending and regulation is good will condemn Texas’ record. Those who believe in individual choice and limited government will cheer Texas’ record. But what other costs did Texans pay? Or, as a liberal might frame the question: “How many children died in the street to pay for Rick Perry’s tax cuts for millionaires and billionaires?” The answer is “none”.

Every year, the United Health Foundation produces America’s Health Rankings, which ranks every state along a number of health-related measurements. Some of these rankings have to do with insurance coverage and government spending. But others have to do with the actual state of people’s health. Tables 1, 2, and 3 show how Texas ranks in inputs to the health system, in outputs for which the health system is (partially) responsible, and in causes of mortality.3

Table 1 shows five inputs to the health system. Texas does not rank very highly in these inputs, and it is more than likely that below average health spending can (to some degree) explain this.

However, relatively poor rankings for inputs are not reflected in generally poor outputs. Table 2 reports 13 health-system outputs. Texas ranks very well in four outputs, and very poorly in four. For the other five, it ranks in in the middle. Note that the health system is not entirely responsible for these outputs. Other determinants of health play a large role. The lesson? Below average health spending may result in lower inputs, but not necessarily lower outputs.

Finally, we look at four causes of mortality. Table 3 clarifies the picture even more. Texas ranks very well in two important causes of mortality, cancer deaths and infant mortality, and ranks about average in two others.

Given these outcomes, it is not at all clear that Texas’ spending more money on the health system would result in better health outcomes. Also, throwing more money at the health system would destroy Texas’ competitive advantage in attracting people.

During the period 2000 through 2009, Texas’ population grew by 3.9 million people. This accounted for 15 percent of the population growth of the entire U.S.6 Furthermore, over 700,000 of these were not newborns or international migrants, but residents from other states – most of which had dramatically more expensive Medicaid programs, like New York.7

And these people came to Texas because that’s where the jobs are. Even Factcheck.org, a liberal watchdog, admits that “the state has added 1,081,900 jobs since December 2000, the month Perry took office. It’s an increase of 11.3 percent during his time as governor. Nationally, employment has gone down in this time frame, declining by 1,295,000, a nearly 1 percent drop.”8

Americans clearly value jobs more than Medicaid dependency or the political goal of “universal coverage.” Instead of frittering away his citizens’ prosperity in mindlessly throwing more of their money at Medicaid, or fruitlessly investing political capital in trying to guarantee so-called “universal coverage,” Perry focused on policies that created jobs. Americans have voted with their feet, and they have voted for Perry’s Texas model.


1 Noam N. Levey, “Texas Healthcare System Withering Under Gov. Perry,” Los Angeles Times (September 8, 2011). Available at http://tinyurl.com/4xjvrmk.
2 Avik Roy, “Rick Perry’s Texas vs. Mitt Romney’s Massachusetts: The Health Statistics Almanac,” Forbes.com: The Apothecary (August 12, 2011). Available at http://tinyurl.com/3jnrfpb.
3 These are my classifications and definitions, not the United Health Foundation’s.
4 America’s Health Rankings (United Health Foundation, 2010). Available at http://statehealthstats.americashealthrankings.org/.
5 America’s Health Rankings (United Health Foundation, 2010). Available at http://statehealthstats.americashealthrankings.org/.
6 Population, population change and estimated components of population change: April 1, 2000 to July 1, 2009, NST-EST2009-alldata (Washington, DC: U.S. Census Bureau, accessed September 15, 2011).
7 Author’s calculation from State Population Estimates and Demographic Components of Population Change: July 1, 1998 to July 1, 1999, ST-99-1 (Washington, DC: U.S. Census Bureau, December 29, 1999); and Arthur B. Laffer, et al., Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index, 4th edition (Washington, DC, American Legislative Exchange Council, 2011), p. xi.
8 “Texas-Size Recovery,” Factcheck.org (Philadelphia, PA: Annenberg Public Policy Center, August 31, 2011. Available at http://www.factcheck.org/2011/08/texas-size-recovery/.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.