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LETTER TO CONGRESSMAN RON PAUL Sir, Arising from a recent interview which I enjoyed with Pat Gorman of Wake Up America at Free Market News Network, your name has been brought to my attention many times in the past couple of weeks. Here is a simple idea which might help get the USA back on the road to the benefits of Libertarian life as originally contemplated by the Founding Fathers. I am using Health Services as an example, but the model should be logically applied to all Social Services, specifically including the Energy Industry. “Private Enterprise Management” of Social (Public) Services should allow for Private Enterprise to manage costs, and Government to set prices based on open market tender. This was done with a public bus service in Australia. The price of a bus ticket was stipulated as a “given” when the Government authority which wanted to privatise put out to tender the management of the Bus Routes. The result: Price of bus tickets remained constant whilst “Head Office head count fell from over eight hundred to three. (That’s “three” as in the single digit # “3”). The winning tenderer made a fortune. Next step should be that the Bus Routes should go back to tender and the winning bidder should be the company that bids the lowest price to charge for bus tickets. The price of bus tickets should then fall sharply whilst still enabling a reasonable profit to be made on a (now) sensible cost structure. If you apply that same model to (say) the Health System, where you ask Private Enterprise to bid for the right to manage (say) hospitals, and the bids are based on the following drivers, then you may get your ratio of Health Services to GDP down from its current 19% to (say) 10% - 12% of GDP - which is more in line with countries like the UK: How much will you charge patients for the following services? Lowest bid wins. Turnkey providers only may bid. However, they may subcontract to anyone, including overseas suppliers such as Teleradiology
If the Health Care Insurance industry was penalised at an escalating rate for exceeding a particular ratio of heath insurance rejections, then this particular scam would be stopped dead in its tracks. Yes, I know that the USA currently has a Private Enterprise managed health system, but Private Enterprise is managing both price and costs. On top of this, they are not providing the appropriate quality of service because they are oriented to maximising profits in an area of social service where the end customer (sick patient) should be healed, not raped. Yes, I know that the doctors are neurotic about quality issues. That’s fine. Let them stay focussed on quality issues – but within the competitive bidding process. Logically, quality will not deteriorate. It will rise as will be explained below. So, as a two step process:
Step 2 should in fact be Step 1 in the time line. Get Private Enterprise to bid on each piece of infrastructure and choose the winner. Then buy the infrastructure at that “highest market bid” and immediately sell it to the winner at that same price. No one can complain if you force a purchase at market price. Logically, if the current owner is the most efficient operator, he will be the winning tender in buying it back. If not, he doesn’t deserve to keep it. Once every five to ten years, put the services contracts out to tender again to get the lowest market price per bed day etc. Thus, if Private Enterprise has to make a profit by ensuring its costs are minimised against externally fixed prices (which the market will determine); and if scamming will lead to increased costs as opposed to increased profits, bingo – you’ve solved the Health Service Industry problem. (No idea how long it will take. Maybe two terms as President) This is not “Socialist Medicine”. This is true Open Market Competition by Private Enterprise. Will the quality of medicine deteriorate? Why should it? If prices are fixed, and only costs are manageable, then patients will go to those service providers which provide the best quality at that price. If medical service providers get too cute in managing costs at the expense of quality, their revenue lines will fall because their occupancy rates will drop as patients support the better quality service providers. Logically, quality should rise. This model is not only applicable to the Health Services Industry. Here are a few other socially important services where the entire community will be adversely affected if Private Enterprise controls both price and cost:
Yes, professional indemnity is an issue and insurance costs are humungous. My suggestion: Do away with everyone’s right to sue for malpractice. Let the aggrieved party lay a criminal charge. If found guilty, the person found guilty of malpractice will go to jail. If the jail sentence is sufficiently long, and the damage done is sufficiently serious, perhaps there could be a central fund to compensate victims. But there can be no out of court settlements. Only if the offenders land up behind bars can compensation be claimed. In the blink of an eye, scam artists (people suing frivolously) will fall by the wayside and doctors (and other service providers) will become genuinely concerned about providing good quality health (and other) services. So, Congressman Paul, I put this to you: If you are truly a Libertarian, then what is contemplated above would be a wonderful outcome across all Public Services The quality of life of the average US citizen would rise, whilst Capitalism and Private Enterprise would be rewarded for efficiency of outcome rather than efficiency of scamming the system. Have you got the courage to take on the lobby groups? From where I am sitting it seems fairly safe to just ignore the lobby groups completely. Pretend they don’t exist. The fact is that they don’t really matter anymore anyway because, via the internet, you can talk directly to the voting public. “Viral Marketing” is an incredibly powerful tool nowadays. Do a deal with Google and Yahoo and whoever else. Finally, if the Lobby Groups don’t matter anymore, their power will evaporate like morning mist in the sun. It boils down to courage. Do you have it? If so, I am getting a sense that there will be an unstoppable groundswell of support for you and you can win this Presidential Election. I wish all strength to one of the world’s last remaining honest politicians.
Sincerely, Brian Bloom
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