No one wants to learn the lesson that while government administration of some things might be "inefficient", any efficiencies brought about by privatization will be turned into margins by the private entity rather than savings to the end customers. Private entities need to maintain margins and will cut service to maintain them.
Yea the argument that efficiency gains are passed to consumers is a tired old and often false argument. The only time efficiencies are passed to consumers are when there is real healthy competition and consumers are supporting that diversity. That's when in order to remain competitive, efficiency needs to be passed to the consumer.
Even in those situations it's not guaranteed. Markets seem to arise at or duplicate similar solutions and even if it's inefficient it's not worth he risk to find better alternatives for consumers because the competitive edge vs risk vs reward just isn't a winning mix worth pursing.
I'm increasingly convinced that most forms of free market systems work best once we have commoditization of a solution and it's just a matter of reproducing that solution, and doing so isn't too capital intensive. As you start to move away from these parameters, markets get more and more consumer hostile and self focused making the argument for them increasingly weak.
There needs to be a focus on competitive markets instead of free markets. Competition is mostly good for customers but competition needs to be created by regulating the market to some degree. Otherwise markets will almost always be taken over slowly by the biggest players that don’t like competition.
It’ll never happen in the US. Neither political party with power will break away from the corporate interests that determine what laws and regulations will pass.
The last candidate who ran on small donors and wore a proud badge of being anti-corporate interests lost twice. Politicians are figuring out how much money can be made by both acquiring legislative influence and power and accepting donations to steer their platforms, as well as passing legislation and policy that helps siphon public funds into private companies that said politicians have a financial stake in.
Changing private equity power requires benevolence, and there’s very little of that left amongst those with political power in the US.
Not to mention that the private companies will work to avoid said competition. Little wonder why ISPs refer to creating networks where one already exists as “overbuilding”
When I look around, there are multiple businesses usually near each other that compete. Home Depot and Lowes, Walmart and Target, Burger King and McDonald’s. ATT/Verizon/Tmobile.
But it is possible that if you pay to build out an entirely new network to a place where Comcast has a monopoly, and the customers would rather pay Comcast $5 less than whatever the lowest price you can charge is, then you would see negative returns by paying to build that network (since the cost of building out a network like that is so astronomical, and Comcast obviously does not have to pay it so their COGS is much lower).
> most forms of free market systems work best once we have commoditization
It’s almost the opposite. Free markets didn’t work in the pre-industrial era because everything was commoditised. That made returns on capital paltry, which in turn made it more “profitable” to conquer capital than build it.
After industrialisation, we repeatedly saw innovation—though not necessarily creativity—in market economies outperform that in centralised ones.
> Private entities need to maintain margins and will cut service to maintain them
This is a false dichotomy. Public v private is so often framed as a political agency versus free-market bonanza. In reality, we have independent agencies and public-private partnerships. But on the private side, we also co-operatives, a model which seems well-suited for community hospitals.
PPPs are often a mirage. As long as there's a private actor involved, some of the input (money) will be siphoned off as profits. That's the height of inefficiency. Where the alternative is a competent, responsive and accountable government, the government will allocate the resources more effectively, and all "inefficiency" goes into working people's pockets. This is not always practical, for example in situations where only private businesses have highly specialized knowledge, but for basic infrastructure the private sector offers nothing the government couldn't do just as well.
“If the public health goal is to improve hospital care, then focusing on things like for-profit or nonprofit status is a distraction” [1].
> Taking "profit" from keeping people "not dead" seems as close to extortion
Modern medicine is expensive. For profit or not, expenses must be covered.
We’re better off incentivising people to become doctors and nurses and pharmaceutical researchers. The problem is all the nonsense being eaten up in administration, administration largely paid for by price obfuscation.
Still you manage to waste 10% on Administrative Expenses and have the worst health outcomes in G7 but the highest expenses.
Maybe learn a thing or two from northern Europe which has 100% public healthcare delivery
> Modern medicine is expensive. For profit or not, expenses must be covered.
There's a ton of bullshit that goes into "medical expenses" in the US. Not the least of which is the inability for people to pay for care and end up in the ER for urgent non-emergency services because ER services are required to be provided. Hospitals need to foot the costs of those people that literally can't pay. Those costs get amortized over every other service (plus plain old margin and gauging) increasing the overall costs.
Besides eliminating unpaid emergency service public health coverage would let people get regular medical care without plunging into debt so they'd go sooner before conditions become acute. Private insurance could even still exist, but as a premium add-on to statutory coverage.
More doctors and nurses is just supply side economics applied to healthcare. Those jobs will appear naturally with the entire population completely covered. Rural hospitals could even open back up since they'd be serving people with actual coverage.
Water is a monopoly right? Seems obvious that privatizing a monopoly doesn't help, because there's no competition incentive to keep prices down and service up.
Hospitals are a monopoly too, when you have an emergency and need care now, you can't compare prices or get quotes for the care, as you don't know even what you will need
This is not well-known but the vast majority of hospital visits are non-emergency.
People used to have choice but now due to 1950s tax code, your employer chooses a health conglomerate which chooses an insurance company which influences the billing allowances which influences the hospital profitability which is now so complicated that often only PE firms are willing to take the investment risk.
The incentives and market feedback is now so distorted that there is little to no signal. Healthcare in the US is often used as an example of failed free markets, but it is very far from a free market.
It's still one of the most deregulated, most bloated and inefficient systems in the whole world, delivering the worst health outcomes across the G7-States.
Everywhere else in the world tight-controlled and regulated Healthcaresystems deliver far better quality. It's one of the cases where you need a regulated market, not a free one
American lifestyles especially in certain states are generally not conducive to good outcomes but the US healthcare system itself is still generally world-renowned for cutting edge procedures.
Analyzing from a cost POV it's quite bad, but in many ways healthcare is the ultimate marginal good so people are willing to spend what they have.
On a population level it does.
Higher children mortality than most developing countries and worst life expectancy in G7 can't only be contributed to bad lifestyle.
It's also a huge part of not being able to access care, and that's not the cutting edge care, it's cheap basic care
I sometimes think the "anti-government run anything" mantra is just people who are easily swayed by propaganda reciting a line. It's easy to take singular examples of government failure and write articles claiming that everything must be owned by private equity because government is dysfunctional.
But do you know what? I used to pay 1/4 the price for electricity when i lived in an area with a local county run power company compared to my new nearby location that has PG&E as the only option. As in government run utilities were literally 1/4 the price per kwh and yet i'm supposed to buy into this "GOVERNMENT IS INEFFICIENT LOL COMMUNISM" propaganda that just doesn't appear true in the slightest. I mean this is consistent across the board.
I know the baby boomer generation were vulnerable to this anti-socialism propaganda but can we please start looking at things objectively and push back against this privatization that is almost always a way for politicians to enrich themselves. Sigh.
My township recently sold my local sewer line to a private company, after privatizing my water line to the same company. Interestingly, there was a major scandal a few years ago where the private company had allowed grey water to mix with the fresh water running to everybody's tap, and a few people got sick. There seemed to be a major public outcry but the company did not pay a price for the error, and were rewarded with the sewer business. As someone who maintains a SaaS business, this seemed unforgivable to me, the equivalent of my company failing in their one job, to keep the servers online. At the same time, my water bill has just about doubled, and my sewer bill has now gone to be around three times. I now pay 4.5 times what I did at my old residence with public utilities, for the exact same service. Is everybody on the take?
I think the anti-government everything must be privatized thing is pushed because it's an opportunity to divert large flows of money into wealthy peoples pockets. The head of a publicly run company might make as much as a sr tech bro. The head of a privatized one can divert tens of millions a year.
Same as attempts to privatize social security. You got a cash flow of $1.4T/year and it drives the lords of capital bonkers they can't get their hands on it.
The government is less efficient at serving its stake holders than for-profit corporations.
The government creates the conditions for PGE to be so bad. I’m defecting from the grid this year, PGE’s high prices mean my s system will pay for itself in less than a year and will likely be more reliable.
battery and solar companies saved me from PGE and they can save you. The government perhaps can but likely won’t. Extrapolate for yourself what this means about the world and what organizations should command the most resources.
The government told PG&E not to fix its broken ass infrastructure and cause a catastrophic fire? I think if you examine the historical record, you will find that the opposite occurred. The government told PG&E not to have 100-year-old infrastructure in fire prone areas, and PG&E decided to send dividends to its hedge fund owners instead of doing so.
Seems a bit passive no? The government has a job, but your way of handling it is the opposite of holding it accountable. Government is made of people and they will be as inefficient as allowed to be.