VA Scandal Shows How Government Works
Jeffrey Dorfman , CONTRIBUTOR
I use economic insight to analyze issues and critique policy.
FOLLOW ON FORBES (176)
Opinions expressed by Forbes Contributors are their own.
I had to go to the local department of driver services office for a driver’s license renewal this week. While the lady I dealt with was quite helpful and completed the renewal in less than five minutes, I first had to wait nearly two hours. There were about fifty people waiting and at various times either two or three people working to help them. A normal business would have more employees to help the customers because in a normal business more customers is a good thing. With government in charge, it makes no difference and that is the problem.
In a for-profit business, serving customers are how one makes money and it is important to keep customers happy. Customers do not like waiting, so businesses work hard to avoid excessive waiting by the customers. They do this in order to make more profit. Government agencies do not have a profit motive. The workers and supervisors have no reason to care about their “customers” except their own pride in doing a good job or perhaps hope of a promotion.
Injuries incurred by service members are cover...
Photo credit: Wikipedia
If you stop to think about the parts of the U.S. that are not working well, they are almost all things that the government provides, not the free market. Public education, public mass transit, government offices, and the example of the moment: the Department of Veterans Affairs.
What is the shared feature of government provision of goods and services that leads to problems? That’s easy; the customer does not pay or pays only indirectly through taxes that are not connected to their use of the service.
Free markets are excellent at providing people with what they want because it is automatic. People go to a store and make a purchase. If demand is strong enough to create a shortage, the manufacturer will produce more and the retailer will stock more because they can make more money by doing so.
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The extra profits earned by those manufacturers and retailers will be noticed and will spur competitors to join the production and marketing of the demanded product. Consumers will get more of the products they like and businesses will make profits. It is a win-win.
But what happens when the government is providing the good or service? The VA health system is the epitome of a government service. It is the liberals’ generation-long dream of a single-payer nationalized health care system. The government employs all the workers and pays all the bills. The veterans may think they are the customers, but they do not pay the bills. The people providing their health care know that they work for the government, not the veterans.
The true scandal is not that people within the VA created fake waiting lists to hide the real, months-long wait which caused some veterans to die. The true scandal is that such a system was created in the first place. This is how government-provided, nationalized health care works. It budgets money for a certain amount of service and then rations that amount amongst its patients through a waiting system. Canada and Britain are both perfect examples of such health systems that apply to all citizens and the same sorts of tragic deaths occur in both countries thanks to the uncaring hand of government and the lack of a profit motive to encourage anybody to do better.
According to reports, the VA hospital in Albuquerque has eight cardiologists who between them see as many patients per week as a single private sector cardiologist would see in two days. The VA doctors get paid the same amount regardless of how many patients they see, so why should they work harder? Liberals may hate profits and the supposed greed it inspires, but profits would get those doctors working harder and could have saved the lives of sick veterans.
In the past few years, the VA has spent hundreds of millions of dollars on furniture instead of hiring more doctors because seeing more patients and delivering better patient care did not bring in more money. If anything, government agencies can best gain budget increases by having problems since politicians seem to think that problems can be solved by throwing more money at them. In reality, problems are solved by allowing markets to work and by getting the incentives right.
Government agencies like the VA deliver bad service because they have no incentive to do any better. As explained in my e-book, Ending the Era of the Free Lunch, government employees see the politicians and others in charge of their budget as the customer, not the citizens who they are supposed to be serving.
As the VA scandal continues to develop people would be wise to remember that Obamacare’s design was a compromise by the Democrats in hopes of attracting Republican support. Many Democrats wanted single-payer health care that would be one step away from the VA system (health care providers would still have been private).
The VA scandal may at least produce some good if it educates people about the dangers of relying on the government. If so, our veterans will once again have done their country a service at great personal sacrifice
Jeffrey Dorfman , CONTRIBUTOR
I use economic insight to analyze issues and critique policy.
FOLLOW ON FORBES (176)
Opinions expressed by Forbes Contributors are their own.
I had to go to the local department of driver services office for a driver’s license renewal this week. While the lady I dealt with was quite helpful and completed the renewal in less than five minutes, I first had to wait nearly two hours. There were about fifty people waiting and at various times either two or three people working to help them. A normal business would have more employees to help the customers because in a normal business more customers is a good thing. With government in charge, it makes no difference and that is the problem.
In a for-profit business, serving customers are how one makes money and it is important to keep customers happy. Customers do not like waiting, so businesses work hard to avoid excessive waiting by the customers. They do this in order to make more profit. Government agencies do not have a profit motive. The workers and supervisors have no reason to care about their “customers” except their own pride in doing a good job or perhaps hope of a promotion.
Injuries incurred by service members are cover...
Photo credit: Wikipedia
If you stop to think about the parts of the U.S. that are not working well, they are almost all things that the government provides, not the free market. Public education, public mass transit, government offices, and the example of the moment: the Department of Veterans Affairs.
What is the shared feature of government provision of goods and services that leads to problems? That’s easy; the customer does not pay or pays only indirectly through taxes that are not connected to their use of the service.
Free markets are excellent at providing people with what they want because it is automatic. People go to a store and make a purchase. If demand is strong enough to create a shortage, the manufacturer will produce more and the retailer will stock more because they can make more money by doing so.
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The extra profits earned by those manufacturers and retailers will be noticed and will spur competitors to join the production and marketing of the demanded product. Consumers will get more of the products they like and businesses will make profits. It is a win-win.
But what happens when the government is providing the good or service? The VA health system is the epitome of a government service. It is the liberals’ generation-long dream of a single-payer nationalized health care system. The government employs all the workers and pays all the bills. The veterans may think they are the customers, but they do not pay the bills. The people providing their health care know that they work for the government, not the veterans.
The true scandal is not that people within the VA created fake waiting lists to hide the real, months-long wait which caused some veterans to die. The true scandal is that such a system was created in the first place. This is how government-provided, nationalized health care works. It budgets money for a certain amount of service and then rations that amount amongst its patients through a waiting system. Canada and Britain are both perfect examples of such health systems that apply to all citizens and the same sorts of tragic deaths occur in both countries thanks to the uncaring hand of government and the lack of a profit motive to encourage anybody to do better.
According to reports, the VA hospital in Albuquerque has eight cardiologists who between them see as many patients per week as a single private sector cardiologist would see in two days. The VA doctors get paid the same amount regardless of how many patients they see, so why should they work harder? Liberals may hate profits and the supposed greed it inspires, but profits would get those doctors working harder and could have saved the lives of sick veterans.
In the past few years, the VA has spent hundreds of millions of dollars on furniture instead of hiring more doctors because seeing more patients and delivering better patient care did not bring in more money. If anything, government agencies can best gain budget increases by having problems since politicians seem to think that problems can be solved by throwing more money at them. In reality, problems are solved by allowing markets to work and by getting the incentives right.
Government agencies like the VA deliver bad service because they have no incentive to do any better. As explained in my e-book, Ending the Era of the Free Lunch, government employees see the politicians and others in charge of their budget as the customer, not the citizens who they are supposed to be serving.
As the VA scandal continues to develop people would be wise to remember that Obamacare’s design was a compromise by the Democrats in hopes of attracting Republican support. Many Democrats wanted single-payer health care that would be one step away from the VA system (health care providers would still have been private).
The VA scandal may at least produce some good if it educates people about the dangers of relying on the government. If so, our veterans will once again have done their country a service at great personal sacrifice
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