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Thursday, August 22 2019 @ 03:51 AM CDT

Texas: Great for Business - as Long as You Don't Have to Live There

Texas Topics

by Barbara O'Brien

The health care crisis is hitting Texas harder than many other states. We need to understand why.
Virginia has bumped Texas out of the number one spot in CNBC’s annual list of the best states for business. By itself that’s not a big deal. It is no bad thing to be the second best state for business, after all. But a close look at why Texas lost to Virginia ought to give Texans –and the rest of us — something to think about.

Texas still has the nation’s healthiest economy, CNBC says, as well as the best infrastructure. It is in the top ten for technology and innovation, access to investment capital, and cost of living. Where Texas is failing is in quality of life, which includes factors such as crime rate and health care. Since last year, Texas has fallen from 22nd to 32nd of the 50 states. Texas also slipped in the cost of living and cost of doing business categories.

CNBC’s poll doesn’t explain exactly why the Texas quality of life is slipping. Texas has had above average violent crime rates for some time, in spite of its famously execution-happy justice system. Texas ranked 15th for violent crime in 2006, for example. I don’t know if it has gotten worse since.

One thing I do know is that the health care crisis is hitting Texas harder than many other states. This is true in spite of the fact that Texas passed a draconian tort reform act in 2003 that was supposed to fix their health care problems.

I’ve written elsewhere about how “tort reform” was promoted by Karl Rove as a killer wedge issue beginning in the 1980s. Manufacturing workers were being exposed to asbestos and other toxic substances, and yes, attorneys were doing very well taking manufacturers to court. But the fact remains that those workers suffered real and severe damage — mesothelioma, for example, and other extremely serious diseases and injuries.

But for several years, Texas has had the highest rate of uninsured citizens in the nation. That rate has continued to rise since 2003, and at times it has risen even faster than the rate of uninsured in the rest of the nation. In 2008, the Robert Wood Johnson Foundation found that Texas health insurance premiums increased by 40 percent from 2001 to 2005, which was the third fastest increase in the nation.

In many ways, Texas is a great example of why our health care system is breaking down. A conservative state, Texas has been loathe to regulate the health insurers to accept patients with pre-existing conditions, or to prevent the insurers from selling junk policies with limited coverage. So, a whopping one-quarter of all Texans have no health insurance. Many Texans who are insured do not have comprehensive policies.

The conservative argument against government regulation is that a competitive “free market” is the best way to provide affordable health insurance. But if Texas is an example, this argument falls apart in the real world. In fact, the high rate of uninsurance is one of the factors pushing up health care costs in Texas.

Because there are so many uninsured and under-insured Texans, in some public hospitals a majority of patients are uninsured. The costs of caring for them are passed on to everyone else. And because un- and under-insured people often postpone treatment until their conditions are dire, treating them is more expensive than it would have been if they had better access to primary care.

Medicare costs in Texas are higher per capita than in many other states. In Roll Call, Michael Johns and Atul Grover explain that it’s common for states that are stingy on health care for their citizens to have high Medicare costs.

According to the Census Bureau, 13 percent of Americans (children and adults) live in poverty. In Louisiana and Mississippi, where poverty rates are 19 percent and 21 percent respectively, both states spend less on health care per capita than the U.S. average, while spending more on Medicare beneficiaries than the U.S. average of $7,439.

Why is it then that the health of citizens in these two state lags far behind the nation as a whole? Could it be that once given health insurance and other benefits — by way of reaching the dual entitlements of Medicare and Social Security — when they turn 65 years of age, Louisianans and Mississippians must eventually pay a heavier price for a lifetime of neglected health needs?

In Texas, 16 percent of the population lives in poverty, and per capita health care spending is far below the U.S. average ($4,601 vs. $5,283). Yet Medicare per capita spending in Texas is far greater ($8,292) than the U.S. average.

Johns and Grover note that infants born in Texas, Louisiana and Mississippi have high mortality rates compared to other states (and very high mortality rates compared to other western democracies). Part of the reason for this, they think, is lack of health care support for younger people.

Wait a minute; CNBC says Texas has the healthiest economy of all 50 states. Yet it has higher rates of poverty than many other states. Don’t conservatives keep telling us that “a rising tide raises all boats?” Looks like some people missed the boat.

According to the Texas Hospital Association, the Texas health care crisis is hitting small business hard:

Providing health care coverage for employees is especially challenging for a small employer. In Texas, about 75 percent of all businesses are small companies, and only about a third of them can offer health insurance.

“Health care affordability and accessibility are the top priority for small business owners year after year,” said Lance Lively, legislative director for NFIB Texas. “They continue to pay an average of 18 percent more than their big business counterparts for the same coverage. This should be a key consideration for lawmakers.”

Darrin Forse, owner of Force Transportation, a small trucking business based in the Houston area, concurred. “It is imperative that small businesses be provided a cost-effective way to make health care coverage affordable and accessible to our employees,” he said.


“This is a crisis that is hurting every man, woman and child in Texas,” said THA President/CEO Dan Stultz, M.D., FACP, FACHE. “Many people without coverage are going without routine, preventive care. Those of us lucky enough to have coverage pay a higher premium as some of the costs for delivering care to the uninsured who do seek help are shifted to paying patients. Local taxpayers are also affected; we all pay higher taxes to support public hospitals, and patients may have to wait longer to receive care, especially in the hospital emergency room.”

So, Texas shows us that “tort reform” doesn’t provide affordable health care, and “free market” health insurance doesn’t provide affordable health care. And as far as the economy is concerned, a rising tide really does not lift all boats. Not that you’ll ever get Texas conservatives to admit that.

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