Issue #69
Last Update October 31, 2010
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Business Fear of Competition by David Katz July 31, 2009 It's amazing how strongly Republicans feel about competition and free-market capitalism, except when it threatens the profits of their corporate donors. Although they cheerfully ignore the effects of monopolies, cartels and limited competition in their pretense that the free market exists, any hint of real competition, especially when it comes from a non-profit organization or the government, is met with cries of dismay, “socialism!” and moans about the death of competition. This is especially true in health care.
The “public option”, the compromise floated by pro-health care for all proponents to replace the single-payer option, is called anti-competitive by the right. Why? Since enrollment in the public option is not mandatory, the public option becomes merely another competing force among many. Opponents say the government has an unfair advantage. Looking closely at their argument, it appears that the unfair advantage is one of price: a governmental option does not have the burden of swollen executive salaries, huge advertising outlays, huge administrative expenditures aimed at denying coverage and reimbursement, and profit. Actually, these are the reasons that a public option is needed.
Unfortunately for the free-market capitalists desperately seeking to hold on to their monopoly, there is another mode of competition: if you can't compete on price, compete on service. The commercial world is full of instances where a superior product commands a superior price: Sony and Apple come immediately to mind. Unfortunately for the HMOs and medical insurers, their revenue model depends on giving the poorest service possible. The term of art for the amount of premium money spent on actual health care is “patient loss ratio”, which says all that needs to be said about the insurance companies' view of spending money on patients. Large amounts are expended for refusing coverage, revoking coverage, or denying service, in order to bolster executive salaries and the bottom line.
Instead of them putting their mouth where their money is, let the right try it the correct way around. Give the public option a chance. If the government is really as inefficient as they have always claimed, public option service will be poor, costs will be high, and the people will vote with their feet, abandoning the public option in favor of private plans. If, on the other hand, the public option really works as well as its proponents hope it will, we will all benefit. Actually, this is the rights greatest fear, one that they must think has a realistic chance of being true, or they would not be putting so much energy into stifling it at birth. If the public option works, the case for a medicare-for-all single payer system will have been proved.
The flap over the public option exposes Republican ideology for what it really is: a fig leaf for greed. If free-market competition can be assailed by the right, by what right do they lay claim to the capitalist/libertarian/competitive mantle?
New York Stringer is published by NYStringer.com. For all communications, contact David Katz, Editor and Publisher, at david@nystringer.com