Thursday, September 10, 2009

Choice & Competition

Choice and competition. Choice and competition. Choice and competition.

Such were the words President Obama last night claimed were his core principles in providing affordable health insurance for all. As a means to providing choice and competition, the President said, we should institute a public option that doesn't have to deal with such pesky things like highly paid executives and all that extra "wasted" money that constitutes the evil bane of man's pitiful existence, PROFIT.

As I read today that Andrew Sullivan considers those of us on the Right side of this argument over health care reform to be intellectually bankrupt for wanting to see tort reform take place, calling it the "crown jewel of Republican cost control," as if this was the only thing that has been proposed by either the Republican party, or anyone else on the Right, I am as frustrated now as I have been silent throughout the entire healthcare debate. I have been relatively silent throughout the process as I have, quite frankly, not had time to sit down and pore over the bill on my own, and many others have done quite a sufficient enough job of it that I felt my voice would not be as purposeful. But Sullivan, as is often the case, knows full well how to push buttons, and whether he knows or cares who I am, he has managed to push one of mine.

The very thought on his part, and it is a thought that is widely held by those on the Left, is twofold. Part A is to point out that everyone that is remotely on the Right side of an issue is stupid. Part B, when confronted by the impossibility of someone on the Right side of an issue who can both read and infer consequences via logic, is to deride them, sneeringly when possible, as a Neocon, or oftentimes in a sophomoric twist, just a "con" and therefore a liar, and then to declare the argument over.

Perhaps if Sullivan and his ilk were to remove their ears from betwixt the President's legs, they might hear his words.

Yes We Can. Yes We Can. Yes We Can.

Choice and competition. Choice and competition. Choice and competition.

As of last night it is the President's own new mantra. But it is a mantra as empty and as meaningless as was the one that won him the presidency. A government option would do no more at offering people choice and competition than the post office offers to Fedex or UPS or DHL. Those companies are in the business of providing a service that the post office cannot: reliability. Do they do it at a higher price than the post office? Of course they do. They're doing it at real market prices, not subsidized-by-the-taxpayers prices. But if I send a letter out in a Fedex envelope and pay the money they ask for it to be there first thing tomorrow morning, it will be there first thing tomorrow morning. This is not something that the post office can provide, and this is why we pay Fedex or UPS or DHL.

Allow me to stay on these terms. Let's say that I live in Illinois, and I have the post office available to me as an option, along with Fedex, UPS and DHL. Fedex, UPS and DHL are not competing with the post office on price, and are not attempting to. Instead they are competing with each other. Each of them have rates that are very easy to find out, and for the most part, are competitive on pricing with each other. All are reliably delivering the next day for $20, and you can track those deliveries step-by-step to their location until they are signed for by their receipient. The post office is delivering for $0.43, assuming you can wait a few days and assuming you don't mind if the mailman maybe takes it to the wrong place or loses it.

Now let us imagine that there are 100 other companies in the United States that provide the service that Fedex, UPS and DHL provide. All 100 of those companies are able to provide the same service for less money. I should be able to solicit those services from one of those 100 other companies instead. But let us imagine that the law of the land is that I am not allowed to. That being the case, Fedex, UPS and DHL are all perfectly content to continue charging me $20, blissfully immune to the existence of the post office, since they know they are providing a better service no matter what. The only way for me to get service that is as good or better is to go to a company outside of Illinois. The only way for this to happen is to change the law.

This is the situation we find ourselves in with the law of the land pertaining to insurance companies. There are 1,300 insurance companies in the United States providing health insurance. That's an average of 26 insurance companies per state. It makes zero sense whatsoever that I should not have access to 1,274 more insurance companies.

That would be choice.

That would be competition.


  1. You are not comparing like-with-like. You are comparing a postage stamp with guaranteed next-day-delivery when you should be comparing a post office expedited service with UPS Fedex and DHL.

    Shame on you for misleading your audience.

  2. UPS, Fedex and DHL all have ground pricing in line with USPS, and the items get there almost a week quicker. Which would you use George? I know, USPS because they truly need our help to survive.

  3. George-

    Guilty as charged. USPS does overnight delivery for a one-pound package for $17.63 according to their website, if we want to get apples-to-apples. But let's remember that that is the USPS's price to compete with UPS, Fedex & DHL. And at that price, the USPS is not viable, losing money on a yearly basis.

    It doesn't change my point. UPS, Fedex & DHL are still competing with each other. They give no thought to USPS. There is a deeply ingrained distrust of the post office. This is why people in business use the parcel services I discuss. They can afford it, so they use it.

    Such would be the result with a public option for insurance as well. Insurance companies would still charge more, knowing that at the end of the day, they are providing a better service than the government, watching and laughing while the government established option attempts to offer lower rates, while losing money, and providing lesser service.

    You get what you pay for.