Wednesday, August 17, 2011

Missing The Forest For All The Trees

Monday, I pointed out the fallacy that privatization actually saves tax payers money.  That piece was done due to the onslaught of stories of just how poorly LogistiCare, an Atlanta-based company, was performing in making sure poor, elderly and disabled people made it to non-emergency medical appointments.

Jeremy Shown, a respectable man even if he is conservative, felt that I was incorrect in my position.  

He felt that the issue wasn't privatization in itself. He felt the bigger problem was the lack of competition.  With competition, prices would have to go down.

But I'm afraid that Jeremy is just plain wrong on this for a couple of reasons.

One, competition doesn't necessarily reduce the price of anything. Look at the cost of health care in Southeastern Wisconsin.  We have so much competition that hospitals and clinics and medical centers are more common than bars now. Yet health care costs in this region are among the highest in the nation.

Secondly, competition doesn't do anything about the underlying problem - putting profits before people.  All it means is that we would have a lot of companies charging too much for services they're not rendering.  Actually, from what I had seen when there were multiple agencies being given contracts for child welfare in Milwaukee County, there was actually less services being provided than before. This happened because there were so many administrations/executives that want their piece of the pie before the money meant for the kids made it that far.  Even now, when the system is finally reaching the point of providing services on the par that the County was providing before the privatization, it's costing tens of millions of dollars more each year.

Another one that can't see the woods for all the trees is Dad29, who also felt the need to chirp in with this:
To elucidate a bit: perhaps Milwaukee County is 'convenienced' by engaging one firm to handle all its logistics.

But with a little less 'convenience', Milwaukee County could assign intra-county 'territories' to two or three vendors, find out which one does the best job, and then reward that firm with more business.
Um, news flash for Daddio, but Transit Plus, Milwaukee County's provider for specialized transport, already contracts with many different companies. Two or three of them already have the bigger slices of the pie, but that doesn't mean they're doing a good job or that they're necessarily the cheapest. That's not how things worked under then County Executive Scott Walker.  And there's no reason to believe Walker suddenly has developed morals as governor.  If anything, he has gotten that much worse.

And to also shatter Daddio's theorem, specialized transport has more than tripled in price over the last few year, even with the competition.

What both of these men are missing though, is that competition is not going to solve the underlying problem.  There is no way to justify putting profit before people, especially if the people are our most vulnerable citizens who need our help to survive.  The money that is lining the pockets of the CEO's, the boards and the administrations of these agencies is money that could be and should be going to the people that need the services.  And that, by any stretch, is not the best use of our tax dollars.

1 comment:

  1. 1. I disagree with you on the question of "profits before people." I think that competition CAN produce positive results for people in a variety of situations. But in the case of healthcare, that is not true. Healthcare is a special circumstance where competition in the insurance market distorts the real costs of healthcare. I'm not in favor of an NHS-style system, but a single payer system where the government handles the insurance but hospitals and physicians operate as private actors makes the most sense. See this blog post: and this one for more useful information

    2. I do agree that privatization is not an end unto itself and it's stupid to assume that it should be. A mix of public and private services is what we need, not all one or all the other. And the conservitards can keep their slippery slope arguments to themselves. They're not convincing... :-)