This is exactly what happens in health care today. For-profit hospitals turn away patients who have no insurance, sending them to overcrowded public hospitals. The consequences, of this practice, known as patient dumping, can be severe. In one six-month study of a public hospitals in Dallas,77 percent of those patients transferred in from other hospitals had no insurance. In other words, private hospitals routinely turned away patients without insurance, sending them to a public hospitals that would take them. Eleven of them died on the way in.
A different form of inequity can threaten those who work for competitive service providers. Careful studies indicate that wages paid by governments and private contractors are, on average, fairly comparable. But some studies suggest that contractors offer fewer benefits, such as health insurance. Governments also tend to be more aggressive than private contractors about hiring and promoting minorities and women.
Competition that is structured carefully, however, can produce more equitable results than service delivery by a public monopoly. Contractors can be required to provide comparable wages and benefits and to promote affirmative action, for example. This is important, if the values we embrace through our governments are not to be lost when those governments use competitive contracts.
Contractors can also be required to serve all segments of the market, to keep from creaming off the most profitable customers. During the National Science Foundation study on garbage collection,
E. S. Savas found that competition actually heightened the equity of service delivery-because public agencies were, in effect, creaming. When city forces encountered delays and did not want to pay overtime, they would simply skip some areas that day-often the poorest areas, because they had the least political clout. With a contractor that didn’t happen, because the contractor had no choice but to fulfill his contract. “It’s a job to be done, rather than a set of neighborhoods to be differentially placated, depending upon their political strength,” Savas says.
A different form of inequity can threaten those who work for competitive service providers. Careful studies indicate that wages paid by governments and private contractors are, on average, fairly comparable. But some studies suggest that contractors offer fewer benefits, such as health insurance. Governments also tend to be more aggressive than private contractors about hiring and promoting minorities and women.
Competition that is structured carefully, however, can produce more equitable results than service delivery by a public monopoly. Contractors can be required to provide comparable wages and benefits and to promote affirmative action, for example. This is important, if the values we embrace through our governments are not to be lost when those governments use competitive contracts.
Contractors can also be required to serve all segments of the market, to keep from creaming off the most profitable customers. During the National Science Foundation study on garbage collection,
E. S. Savas found that competition actually heightened the equity of service delivery-because public agencies were, in effect, creaming. When city forces encountered delays and did not want to pay overtime, they would simply skip some areas that day-often the poorest areas, because they had the least political clout. With a contractor that didn’t happen, because the contractor had no choice but to fulfill his contract. “It’s a job to be done, rather than a set of neighborhoods to be differentially placated, depending upon their political strength,” Savas says.
If not carefully structured, markets that look competitive
Also succumb to monopolistic power. In both contracting
Procurement systems, for example, some projects are so
Sive that for all practical purposes it is impossible to switch
Viders once the job has begun. Defense contractors who
Submarines and ships enjoy this protection; it explains why
Get away with endless cost overruns and seem impervious
Sanctions. A similar problem is emerging with private corpor
Tions that contract to operate prisons, many of which demar
20-to 30-year contracts. “There is some reason to fear that in
Stead of being competitive like the trash collection industry
John D. Donahue wrote in The Privatization Decision, prise
Management “will be competitive like the nuclear-submarin
Industry-which is to say, not at all.”
Even when private firms do not have monopolies, they times develop enough political power to stifle competition.
Mass transit, private bus companies spend considerable sums
Influence legislatures, to get and keep their contracts. In garba
Collection, large private firms use their power to lobby again
Policies that would reduce the volume of garbage, such as
Cycling and source reduction. Even in day care, private firms to
To restrict the competition.
This pattern suggests that governments would be wise to der
Firms with which they do large volumes of business the right
Lobby or make campaign contributions. Such prohibitions
Have constitutional problems when applied by law to all priva
Firms, but they can certainly be written into specific contracts.
A company wants the public sector’s business, it simply agree
To forgot any effort to influence public policy in related area
The conflict of interest is obvious.
None of this is to say that public monopolies don’t requie
The same careful oversight. Oversight. The postmasters sent enormo
Volumes of free mail to lobby Congress for a rate hike in 199
School principals in Chicago used to eliminate the refrom pro
Gram that took away their lifetime job security. A public employee union in Michigan sued to block the state from
Contracting out job training for welfare recipients. Rural Metr
A private firm that operates fire departments in some 30 con
หน้า 106
หน้า 107
Competitive Government
Munities, has been threatened so often by unions that it will no
Longer bid against a unionized fire department. The threat usually goes something like this: “If you come in here, we’re going to raise money from every union in the country and make trouble in your backyard.” Unions may have less money to spend than large corporations, but public employees vote at twice the rates of the general public.
Competition is here to stay, regardless of what our governments do. In today’s fast-moving marketplace, the private sector is rapidly taking market share away from public organizations. Public schools are losing ground to private schools. The Postal Service is losing ground to Federal Express and UPS. Public police forces are losing ground to private security firms, which now employ two-thirds of all security personnel in the nation.
We can ignore this trend and continue with business as usual, watching fewer and fewer people use public institutions. We can sit idly by as a vicious cycle unwinds in which the less people depend on government the less they are willing to finance it, the less they finance it the worse it gets, and the worse it gets the less they depend on it. Or we can wake up – as entrepreneurial leaders from Phoenix to East Harlem to Minnesota have-and embrace competition as a tool to revitalize our public institutions.
The choice is not quite as stark as it would be in a competitive marketplace: compete or die. But it is stark enough. Our public sector can learn to compete, or it can stagnate and shrink, until the only customers who use public services are those who cannot afford an alternative.
This is exactly what happens in health care today. For-profit hospitals turn away patients who have no insurance, sending them to overcrowded public hospitals. The consequences, of this practice, known as patient dumping, can be severe. In one six-month study of a public hospitals in Dallas,77 percent of those patients transferred in from other hospitals had no insurance. In other words, private hospitals routinely turned away patients without insurance, sending them to a public hospitals that would take them. Eleven of them died on the way in.A different form of inequity can threaten those who work for competitive service providers. Careful studies indicate that wages paid by governments and private contractors are, on average, fairly comparable. But some studies suggest that contractors offer fewer benefits, such as health insurance. Governments also tend to be more aggressive than private contractors about hiring and promoting minorities and women. Competition that is structured carefully, however, can produce more equitable results than service delivery by a public monopoly. Contractors can be required to provide comparable wages and benefits and to promote affirmative action, for example. This is important, if the values we embrace through our governments are not to be lost when those governments use competitive contracts. Contractors can also be required to serve all segments of the market, to keep from creaming off the most profitable customers. During the National Science Foundation study on garbage collection, E. S. Savas found that competition actually heightened the equity of service delivery-because public agencies were, in effect, creaming. When city forces encountered delays and did not want to pay overtime, they would simply skip some areas that day-often the poorest areas, because they had the least political clout. With a contractor that didn’t happen, because the contractor had no choice but to fulfill his contract. “It’s a job to be done, rather than a set of neighborhoods to be differentially placated, depending upon their political strength,” Savas says.A different form of inequity can threaten those who work for competitive service providers. Careful studies indicate that wages paid by governments and private contractors are, on average, fairly comparable. But some studies suggest that contractors offer fewer benefits, such as health insurance. Governments also tend to be more aggressive than private contractors about hiring and promoting minorities and women. Competition that is structured carefully, however, can produce more equitable results than service delivery by a public monopoly. Contractors can be required to provide comparable wages and benefits and to promote affirmative action, for example. This is important, if the values we embrace through our governments are not to be lost when those governments use competitive contracts. Contractors can also be required to serve all segments of the market, to keep from creaming off the most profitable customers. During the National Science Foundation study on garbage collection, E. S. Savas found that competition actually heightened the equity of service delivery-because public agencies were, in effect, creaming. When city forces encountered delays and did not want to pay overtime, they would simply skip some areas that day-often the poorest areas, because they had the least political clout. With a contractor that didn’t happen, because the contractor had no choice but to fulfill his contract. “It’s a job to be done, rather than a set of neighborhoods to be differentially placated, depending upon their political strength,” Savas says.If not carefully structured, markets that look competitive Also succumb to monopolistic power. In both contractingProcurement systems, for example, some projects are soSive that for all practical purposes it is impossible to switchViders once the job has begun. Defense contractors who Submarines and ships enjoy this protection; it explains whyGet away with endless cost overruns and seem imperviousSanctions. A similar problem is emerging with private corporTions that contract to operate prisons, many of which demar20-to 30-year contracts. “There is some reason to fear that inStead of being competitive like the trash collection industryJohn D. Donahue wrote in The Privatization Decision, priseManagement “will be competitive like the nuclear-submarinIndustry-which is to say, not at all.” Even when private firms do not have monopolies, they times develop enough political power to stifle competition.Mass transit, private bus companies spend considerable sums
Influence legislatures, to get and keep their contracts. In garba
Collection, large private firms use their power to lobby again
Policies that would reduce the volume of garbage, such as
Cycling and source reduction. Even in day care, private firms to
To restrict the competition.
This pattern suggests that governments would be wise to der
Firms with which they do large volumes of business the right
Lobby or make campaign contributions. Such prohibitions
Have constitutional problems when applied by law to all priva
Firms, but they can certainly be written into specific contracts.
A company wants the public sector’s business, it simply agree
To forgot any effort to influence public policy in related area
The conflict of interest is obvious.
None of this is to say that public monopolies don’t requie
The same careful oversight. Oversight. The postmasters sent enormo
Volumes of free mail to lobby Congress for a rate hike in 199
School principals in Chicago used to eliminate the refrom pro
Gram that took away their lifetime job security. A public employee union in Michigan sued to block the state from
Contracting out job training for welfare recipients. Rural Metr
A private firm that operates fire departments in some 30 con
หน้า 106
หน้า 107
Competitive Government
Munities, has been threatened so often by unions that it will no
Longer bid against a unionized fire department. The threat usually goes something like this: “If you come in here, we’re going to raise money from every union in the country and make trouble in your backyard.” Unions may have less money to spend than large corporations, but public employees vote at twice the rates of the general public.
Competition is here to stay, regardless of what our governments do. In today’s fast-moving marketplace, the private sector is rapidly taking market share away from public organizations. Public schools are losing ground to private schools. The Postal Service is losing ground to Federal Express and UPS. Public police forces are losing ground to private security firms, which now employ two-thirds of all security personnel in the nation.
We can ignore this trend and continue with business as usual, watching fewer and fewer people use public institutions. We can sit idly by as a vicious cycle unwinds in which the less people depend on government the less they are willing to finance it, the less they finance it the worse it gets, and the worse it gets the less they depend on it. Or we can wake up – as entrepreneurial leaders from Phoenix to East Harlem to Minnesota have-and embrace competition as a tool to revitalize our public institutions.
The choice is not quite as stark as it would be in a competitive marketplace: compete or die. But it is stark enough. Our public sector can learn to compete, or it can stagnate and shrink, until the only customers who use public services are those who cannot afford an alternative.
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