If I need to buy a lawn mower and I go to a lawn mower manufacturer, I can buy one. It’s simple they provide a price list, I choose the one I want and I can buy it.
Now if I need to buy 1000 lawn mowers and I go to that same lawn mower manufacturer I can negotiate a much better price based on the additional volume. And if I go to several lawn mower manufacturers and get them to provide their best offers I can play them off against each other, ending up with the best possible deal.
It’s not that difficult there is huge negotiating power when you are a big purchaser.
Things change when you work with government bodies. Vendors to capture business play all sorts of games, and where possible they try and maximize the price. But the thing that amazes me is that government falls for it!
When a candidate takes funds to promote himself in an election, he or she is expected to provide “favors” in return. This means that businesses get to influence both elections and policy directly and proportionally to the amount of money they spend. More money equals more influence.
This turns politicians at all levels into bought and paid-for stooges.
Other democratic countries around the world have recognized this issue and to differing levels made it illegal for money to be paid to political candidates or their supporting organizations in exchange for influence.
Other countries have mandated that every citizen must vote. They can chose to mark the “none of the above” box of the ballot, but they have to show up and be counted.
In the US more time and effort is spent trying to stop the “wrong” people from voting or manipulating constituency boundaries to give specific parties an unfair advantage than anywhere else in the world. And the amount of money pushed to candidates in elections is so extream as to completely remove the governments ability to fairly negotiate contracts.
All of this adds up to a system that just doesn’t get the most efficient or effective government.
Lets take healthcare, the bits of healthcare that the government does actually cover. These are Medicare and Medicaid, which provide care for those with virtually nothing and those who have reached retirement age. Everyone is so concerned that these programs are going to become unviable and so are looking at creative ways to lower the costs.
But they are missing the most basic ways of reducing costs. Stop paying providers so much for the services they offer.
In the US drugs are not centrally purchased by the government, but are instead bought on a case-by-case basis. This ensures that the US government is paying the highest possible price. And its been made illegal to buy drugs outside of the US, effectively creating a captive market.
Also services are not charged on a results based basis, but on a time and materials basis. This means that if an old lady goes to the doctor complaining of a headache, the doctor is incentivized to give her a whole range of expensive tests rather than as aspirin.
If the doctor doesn’t provide the most expensive and complete set of tests and misses something then lawsuits would likely follow.
Medicine is an art and a science, and we need practitioners that use there best judgment to maximize the quality of life, not maximize their bank account and minimize their litigation insurance.
So here’s the answer. Use the buying power of the US government and its 300,000,000 customer-owners to deliver the lowest prices for every drug and service that is paid anywhere in the world. And balance this by removing the most egregious litigation threats. And lets have a pay for results based system that rewards the most efficient use of drugs and services.
Costs would go down, quality would go up, and the books would be balanced.
Now that’s just healthcare!
The same goes for education, transport, power, telecoms, and every other basic service that every level of government provides.
Some would call this socialism, and get wild about how terrible socialists are. But this is not socialism, this is economics!
Every efficient business uses these same techniques.
Lets remove money from politics and use the power and the scale of the US to get the benefits we deserve.
This is fiscal conservatism at work.