Why Government-run Health Care (or anything else) Is a Bad Idea

Let’s say you have a good idea for serving new customers, or old customers more effectively.  In a private setting, that’s great.  You benefit your customers, and you make money doing it.  There’s every incentive to develop your idea and implement it.

In a government setting, however, that’s not true at all.  Customers don’t make you money; they cost you money.  You have no incentive at all to serve new customers.  And you have an incentive to serve existing customers more effectively only to the extent that doing so saves you time, effort, or money.  If doing so costs you money, you have an incentive not to do it, even if the value created for your customer far outstrips the cost.

That’s why my university, for example, does virtually nothing to serve adults in its community who would love to take additional classes and pursue additional degrees; why it makes it difficult, if not impossible, to be a part-time student; and why new ideas are evaluated solely on the basis of padding CVs or bringing in private donations.  We lose money on every student.  There’s no incentive to bring in more of them.

What will this mean for government-run health care?  There will be incentives to cut costs, but not to improve services, and not to reach additional people.  The system will lose money on every customer.  So, there will be incentives not to serve customers—that is, not to treat patients.  That’s you.

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