A new government report reveals that the U.S. health care system is performing worse than previously thought.  Not only are costs escalating wildly, but distribution of health care is becoming more contracted, and quality is not improving, the report states.

Some of the stats include:

• Costs are 16.2% of GDP and at $7,421 per person per year are twice that of other industrialized countries.
• The average cost of employer based health insurance is now at $12,680 or roughly equal to the annual earning of a minimum wage laborer.
• Half of all bankruptcies are due, at least in part, because of burdensome health care bills.
• Incredibly, 87 million citizens, almost one in three, were without insurance coverage at some point during the year.
• More than 80% of the uninsured are in working families.
• Over 37 performance indicators, the U.S. achieved an overall score of 65 out of 100.
• More than 98,000 Americans die each year as a result of medical errors, more than the total from motor vehicle accidents, breast cancer and AIDS.

 This situation is an embarrassment to the country.  That we tolerate the routine cruelty contained in the numbers above is shameful.  Enough already.  If you want to see more stats about this disaster, go here.

There are government services we expect, obviously, and private services we expect as well.  Comparing them where they overlap, which they often do, is frought with ideologies.  Free market, regulated market, government market.  When to use what, or a combination?

Take, for example, motor vehicle registrations.  This is the government market.  The lines are often long, as are the waits.  Grumble.  So why not supplement this government service by allowing some private participation?   Don’t want to wait so long?  No problem, go to an authorized private service, pay $20 bucks more (out of a hat estimate, just for discussion only) and you don’t have to wait.  Problem solved, one would suppose.

There are important follow on observations to make, however.  The government service is cheaper and not every citizen can afford the extra money as opposed to saving some time.  Government services typically have lower administrative costs.  Administrative costs on Social Security for example, a government retirement benefit, are a fraction of administrative costs on private benefit plans. 

It’s more expensive to hire enough people to handle wide fluctuations in demand that a private, competitive organization would need to handle in order to compete in a free market.  And of course there’s the profit a private organization must make in order to exist.

It could be argued that if the government charged that extra $20 it could hire more employees and thus drop the lines and the wait.  Oh joy.  But it’s not a given that would be the case.  Because the registrations are a revenue source, it doesn’t necessarily follow government will spend extra money generated by registrations on more employees at the Dept. of Motor Vehicles.  It may want to spend the extra money on public education instead.

Private marketers would respond that it could all be done privately.  In competition, some registration companies would go for the higher end, service oriented slice of the market.  Others would take the middle, or the lower slices.  Macy’s, Nordstrom’s or K-Mart, for example.

Fair enough.  But would that really happen?  Take health care, as an example.  Government might want to have everyone covered with affordable, widely available health care services.   A public good.  In the U.S. currently, both the public and the private markets serve this area.  Private services, so far at least, have shown that they prefer to insure profitable customers.  They cherry pick, in other words, and leave the least profitable slices of the market to government.  History has shown that, without government involvement, the lower slices of this market simply don’t get served.  Under the all private system, many people had no lines available to them.  Their wait is forever, without the government stepping in.

Back to the registration business we began with.  Would it be likely that an all private registration business would simply not service the lowest portion of the market?  It would not be profitable to offer a service at prices offered by government. 

The point is, it’s way to easy to say the government does everything poorly and then walk away figuring you’ve got it pegged.  You don’t.  All private markets invariably leave sometimes large swaths of people with no lines at all.  No health care.  No lawyers.  No car insurance.  No jobs.  No shelter.  No chance.

If your attitude is “that’s life, I got mine,” so be it.  That’s exactly why we have government.  It will attempt to help the less gifted, the less blessed by serendipity.  And for the “I got mine crowd.”  Well, you got yours.  Be thankful.