Health policy must serve clients, public, not big govt

As Gov. Bobby Jindal continues to seek out spending fewer taxpayer dollars on state delivery of services without reduction in quality, a curious argument has emerged against the strategy which bears reviewing for its veracity and what it can tell us about the motives of its advocates.

Jindal has placed great store in identifying government functions amenable to privatization and moving in that direction. This has raised the hackles of both some state employees, who would lose state jobs and possibly not be hired by the private sector afterwards, and some politicians who believe in a model of bigger government doing more using more resources. They try to counter the Jindal initiatives by arguing that provision of the services will suffer in doing this, both in a relative and absolute sense.

This means that two objections could be raised. One is that the service will be performed adequately, but not to the same level as it had been done by the state previously. An example of this comes from the state’s decisions to remove from veterans’ homes run by the state pharmacies with a variety of compounds. Those disappointed in this argue that this causes inconvenience and possible threats to the health of aged veterans.

Yet the state has absolutely no incentive to endanger lives of people under its care, not only for moral reasons but also because of the legal implications. Further, in regards to nursing home care, veterans; homes represent the absolute lap of luxury. The majority of veterans who qualify to be in them can’t even get into them either because they can’t afford it (because few beds are set aside for non-private payers outside of those whose Veterans Affairs benefits can pay for them, and many more veterans qualify for admission than they do for VA benefits on this account) or because space is too limited. Most if they need nursing home care, whether paid by another government program such as Medicare or (most often) by Medicaid or by private pay, end up in the private sector of which few facilities have their own resident physician, comprehensive pharmacy, and the like.

So why should one set of veterans have taxpayers contribute more to their care than others? As long as each get comparable and adequate service, that is all the obligation a taxpayer should have – even as the state’s veterans’ homes under the new arrangement will continue to offer more services than the typical private-sector institution.

The other objection implies that the service will not be adequately provided, such as in the area of mental health service provision with the transfer out from state hospitals of clients judged in need of less intensive services. Not only that, they claim, but also money will not be saved this way. Illustrating this are remarks made by state Rep. John Bel Edwards, demonstrating he warmed quickly to his new role as leader of Democrats in the state House. “It will look good for a year or two. But I promise you the savings are not there,” and then predicted an apocalyptic scenario of the jails filled with mental patients.

Let’s parse this fascinating, if uninformed, statement. Essentially, Edwards argued that private sector facilities could “cherry-pick” the clients of lowest cost to them, leaving higher-cost individuals under state hospitalization. No kidding; only the clients needing less-intense services would be served appropriately outside of a hospital, but the state still will save money by having to commit fewer costs per patient to these individuals, such as through personnel reductions the costs of which are greater than those registered by the more efficient private sector.

Under this formulation, therefore, the savings will have to be eaten up by the remaining population, meaning under Edwards’ calculations that total costs will go up faster for serving fewer people than they would for serving more. Under this calculus, either Edwards is a genius who needs to apply this principle to the development of a perpetual motion machine (creating more output the more input is reduced) or he needs a lot of work on his critical thinking skills.

One could argue Edwards’s argument might make sense if government in fact was more efficient in providing services regularly provided in the private sector, because then the cost of contracting would exceed the cost of providing that service in-house through government. One need not laugh off this argument with the plain observation that in the real world there are all kinds of examples of the private sector, disciplined by the profit motive, performing better and more efficient service than government, by simply noting the inefficiencies in government provision are reflected in the vast disparity of higher per-person labor costs paid in the public sector relative to the private sector.

But most interesting is the assumption that permeates Edwards’ statement, that government does a better job in cost or service or both. If that were the case, then why isn’t he arguing that government does everything? Why not close every private mental health facility and create massive state-run institutions, if government does such a good job at this and the costs of contracting out would be more expensive and/or the service in the private sector (which handles by far the largest proportion of clients) is so demonstrably inferior that it cannot be trusted to perform it and therefore justify higher government costs? Again, to anybody with common sense who can view the real world, in all but a handful of endeavors to believe government does a better job that the private sector is to live in delusion.

Or, to imply such is to reveal their true agendas. Perhaps Edwards and his ilk actually are concerned about the clients themselves, but it’s crystal clear they care more about preservation of government jobs and power than anything else. That, after all, is the ideological agenda of Democrats: to empower government rather than people, to punish people for their successful application of talents and wills that allows them to pull the wagon in order to reward those that contribute little who ride it, and to demonize policy that protects people’s liberty in order to cater to special interests.

This is what happens when emotion and rhetoric replace reason. By all indications, Jindal’s plans will serve as many or more people as well or better than they have been at reduced cost to the citizenry. Government employment is not a guarantee, and political hot air doesn’t substitute for valid thinking. Neither should distract from pursuit of this policy that will help both clients and citizens. Indeed, not to bring about this reform is folly that disserves the public through the waste of resources better used for other things.