by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
Gov. Roy Cooper is touting Medicaid expansion now as a “jobs” program, saying it would “add an estimated 37,200 more jobs to North Carolina.”
If you wondered “Based on what?” or “Estimated by whom?” you are ahead of the game.
Compare that mild skepticism with how The News & Observer reported on it. Here is their news headline: “Medicaid expansion projected to bring jobs to every NC county, and not just in health care.”
Doesn’t that sound a tad credulous? Well, read on, Lizzy.
The N&O provides this information on who furnished the study:
The study is a collaboration between the university [George Washington University] and two North Carolina-based foundations — the Cone Health Foundation, based in Greensboro, and the Kate B. Reynolds Charitable Trust, which works to improve health care for Forsyth County residents.
Oh. The study is done in collaboration with two foundations with a vested interest in health care policy. Of itself, that doesn’t mean the study is wrong, but it’s important to note. As Roy Cordato wrote recently:
As a general rule, the public and politicians should never view economic impact studies as anything more than an attempt by special interests to manipulate public opinion for their own benefit.
I’d add to that general rule “and media, too.” Because that principle would have served the N&O’s reporting better.
The N&O’s report asked and answered several questions, given in bold subheads. What were they?
The news report didn’t ask several questions, such as:
The report quoted several people. Who were they?
The report didn’t quote several people, such as:
This morning Carolina Journal published a column by Cordato on the study. Cordato is an economist and also a well-known critic of the kind of “economic impact” reports used by the governor and parroted by the N&O. His column is entitled “Medicaid expansion and job creation: Bad economics, good special interest politics.”
Roy’s article goes into detail about how the model used expressly avoids opportunity costs, adopts a “manna from heaven” assumption about government spending, and ignores bidding effects on land, labor, and capital in an economy at full employment. He points out that such a questionable model is being employed by “strong advocates” of Medicaid expansion and that neither the lead author nor the co-authors have economics degrees.
The analysis doesn’t even pretend to be weighing the economic pros and cons of Medicaid expansion, only the pros. If the funders were truly interested in unbiased analysis, they could have gone to any of the major research institutions in North Carolina, all of which have world-class economics departments, to find truly qualified economists to perform a real cost/benefit analysis, instead of funding a “study” that focuses strictly on the benefits.
In assessing the economic effects of Medicaid expansion, the people of North Carolina are presented with a study funded by two special interest advocacy groups, written by three authors with no credentials in economics, and a lead author describing himself as an “advocate.” Furthermore, the study is using an economic model designed to never show job or GDP losses. Those who use this as a basis for claiming that Medicaid expansion will create nearly 40,000 jobs in the state may also be interested in a bridge that I have for sale.
Roy and I have written a great deal on economic-impact studies and the modeling software used (including REMI) to produce them. These briefs and reports provide useful information for responsible media, public officials, and private citizens, too.