Critical Condition

How Does Rick Perry Stack Up to Mitt Romney on Health Care?

Rick Perry, upon entering the presidential race, immediately becomes a top challenger to front-runner Mitt Romney. Romney is well known in these parts for his track record on health care as governor of Massachusetts. But what about Perry? How does Perry’s nearly eleven years in the Texas Governor’s Mansion stack up on health-care matters?

Motivated by this question, I compiled a Texas vs. Massachusetts almanac of health statistics over at my Forbes blog, chock full of charts and graphs. And the figures are interesting:

If you’re the type who likes to read the end of a book first, you might ask, “Okay, Avik, what’s the bottom line?” The answer will, in part, depend on what you think is important in health care policy. If you’re most concerned about runaway government spending, Perry is the clear winner. If the rising cost of health insurance is your primary worry, Perry wins there too. On the other hand, if universal coverage is your bailiwick, Romney comes out far ahead.

Texas spends just 5.1 percent of its budget on Medicaid, compared to 28.9 percent for Massachusetts. (The national average is 15.7 percent.) And that doesn’t count what the Bay State spends on Romneycare’s health exchange subsidies.

Most impressively, from 2003 to 2009, the average health-insurance premium grew in Texas by 4.0 percent for an individual plan per year and 4.6 percent for a family plan, below the national average of 5.0 percent and 5.9 percent, respectively, and far below Massachusetts’ 7.1 percent and 6.9 percent.

This different in premium growth is at least partially driven by the two governors’ different approaches to health reform. Romney’s plan subsidized the demand for additional health spending, without expanding the supply of doctors and hospitals, driving prices up. Perry’s signature achievement — convincing Texas voters to pass a referendum capping non-economic medical malpractice damages — has helped the Lone Star State buck national cost trends, and attracted hordes of doctors to the state.

Romney fans, on the other hand, can point to the state’s very low proportion of residents lacking health insurance: 4.4 percent in 2009, compared to 26.1 percent for Texas; the national average in that year was 16.7 percent.

However, contrary to Romney’s argument (repeated at last night’s debate) that his plan would solve overuse of emergency rooms by “free riders,” ER usage in Massachusetts is above the national average, at 473 visits per 1,000 residents in 2009, compared to the national average of 415, and Texas at 381.

What these two governors did or didn’t do at the state level is just one aspect of things, of course. What matters even more is how they plan to tackle our health-care entitlements at the federal level. We’ll have to see if past is prologue.

— Avik Roy is an equity research analyst at Monness, Crespi, Hardt & Co., and blogs on health-care policy at The Apothecary. You can follow him on Twitter at @aviksaroy.

Avik Roy — Avik Roy is the President of the Foundation for Research on Equal Opportunity (FREOPP.org), a non-partisan, non-profit think tank.

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