On Profit & Efficiency


The U.S. Health system has twice the per capita costs of anywhere in the Western world and some of the worst outcomes if you factor in the whole population (i.e. the 45 million+ with no health insurance).

This U.S. model of a commercial health care system is absolutely not efficient compared with the socialised health systems of Europe. But it is profitable.

This illustrates that despite the protestations of the neoliberal ideologues, profit & efficiency are not synonymous.

It is perfectly possible for a profitable company to be inefficient; it entirely depends on the level of competition, the nature of the activity and how you are defining efficiency, which depends on how define the point of the exercise in the first place.

Is the point of a health care system to generate profits for shareholders or is it to keep the population healthy? The neoliberal ideologues would claim that the two are the same thing; that the profit motive will inevitably bring about the desired result of health care for citizens.

But to what extent is this true? One of the best ways to help patients is to talk to them. Restricting doctor’s appointments to 10 minutes may be a more efficient use of a doctor’s time, in terms of seeing more patients, but for many patients such a perfunctory consultation will have negative effects on their health care outcomes.

Quality is a determiner of price just as much as value and achieving quality is usually not as cost-efficient as producing value. To produce quality goods and services often involves considerable time, craftsmanship, customer service and the best of raw materials.

Surely education & healthcare are, or should be, quality rather than value products? In which case health and education are going to be relatively expensive.

Indeed, the U.S. healthcare system reflects this fact, as the quality service provided by its commercial hospital system is so expensive that over 45 million Americans cannot afford health insurance and are thus effectively excluded from the health care system.

Similarly in education; Providers of private education know that to produce the best results children need to be taught in small classes and receive significant 121 tutorial help. They also know that children flourish in a disciplined environment with lots of extra-curricular activities and excellent facilities. As a result private schools in the US & UK have class sizes of 15-20 and provide the highest quality theatres, music studios, concert halls, sports stadia and the like. By contrast, state schools in these countries have class sizes of 30+ and facilities that are often out-dated and poorly maintained – due to the cost provision and maintenance.

Thus questions of pragmatic efficiency become questions of social justice and equality. Is it fair that children born to poor families should not have access to a quality education? Is it fair that they have diminished life expectancy and a lifetime of health problems with no access to health care?

In the 20th century it became generally accepted across the political spectrum that quality health care and a quality education should be a right of citizenship not an option only open to those who can afford it.

A National Health Service free at the point of use and rationed according to need rather than the ability to pay, and a national education service free at the point of use, were introduced in the UK after WWII by a socialist Labour government, (Well more like social democrat but lets not get into that), as the foundations of a new British society based on concepts of equality and social justice.

But even this was too much for the neoliberals who saw socialised health & education as a threat to the social, financial and political conditions that maximise profit. Their ideology asserts that if a profit can be made, then it should be made. They also didn’t like the fact that the wealthy were paying for the health care and education of the poor.

And so from 1979 onwards both Conservative and Labour governments have looked towards the U.S. model of health care as a way to shift the burden of health care costs back on to the poor and simultaneously open up a profit making opportunity for global corporate capitalist health care providers.

They have often couched their campaign in terms of allowing free markets to make healthcare and education more efficient and thus save taxpayers money. The fact that the U.S. system is demonstrably less efficient than the socialised European models is never mentioned, along with the fact that every PFI so far instigated has ended up costing taxpayers many times what the costs would have been if the project had been paid for directly by the Department Of Health.

The truth is that a privatised health and education system in the UK would not be more efficient and would undoubtedly cost UK taxpayers more than the directly commissioned, publicly owned alternative.

It would, however, undoubtedly generate huge profits for private businesses. Now the neoliberals themselves thing this is a social good in and of itself, but they also know that they could never convince the ordinary decent voter of the UK to support the privatisation purely on the grounds it will make already rich people even richer. And so the efficiency argument is wheeled out and because of the control of the media capitalist enterprises have (see The Democratic Threat To Capitalism), the real facts about the efficiency and efficacy of health care and education markets is almost entirely absent from the discourse.

Simply to assert that “markets and competition make organisations more efficient”, seems to be enough to convince most of the people, most of the time..

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s