Sep 10 2009
Public Healthcare & Public Education
In President Obama’s health care speech last night, he compared a public health insurance option to the way public colleges & universities are funded and operated.
I’ve insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects.
…it could provide a good deal for consumers, and would also keep pressure on private insurers to keep their policies affordable and treat their customers better, the same way public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities.
This is an interesting notion. Indeed, each year public higher education institutions are moving more and more towards self-sufficiency, with ever diminishing support from governmental sources. We have to pick up the slack through higher tuition rates, research grants, and also stepping up fund-raising efforts- that is through charitable donations.
Unlike with colleges & universities, in the president’s scenario for a public health care plan I don’t really see any potential for income through research grants or charitable donations. Am I missing something or does this leave the public health care option relying solely on premiums? And wouldn’t the public option be for people who can’t already get insurance in the current system (a higher risk demographic)?
What does establishing an unsubsidized public health insurance option that is self-sufficient through premiums accomplish? President Obama suggests that it could avoid
…some of the overhead that gets eaten up at private companies by profits and excessive administrative costs and executive salaries
If you compare public & private institutions of higher learning, you will nearly always find lower salaries and administrative costs at the private institutions, as a matter of their survival. If you don’t believe it, here is an example for which I have some data— Student Information Systems. In 2004, I did a study of the student information systems used by the community colleges in Kansas. There are 19 community colleges in Kansas and they run eight different brands of student information systems. Each school purchases and operates it’s own stand-alone database independently. Now compare this approach to the private Associated Colleges of Central Kansas approach. Six private universities in Kansas, that is six private schools that directly compete with one another, formed a consortium to share a single, centralized student information system that saves about half a million dollars a year for these schools.
Sorry President Obama, I think the public & private college analogy isn’t helpful for making your case. If you think a public health insurance option that receives no government subsidies can be completely self sufficient by insuring the segment of the population that cannot already obtain private insurance, you are out of touch with how the real world works.
One response so far
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Out of touch is exactly what he is. President Obama is living in the some dream world where the US government has unlimited funds to make anything his socialist buddies can dream up happen. You know, we already have a lot of public options. The US Postal Service. Medicaid. Medicare. Social Security. But these are all able to run under just what money is put in by the people that use them, right? Wait, no. All of these systems cost American taxpayers billions of dollars every year. Billions. And they pale compare to the cost of a healthcare plan that has no hope of actually making the sickness in the system well again.