I was reflecting on these industries that reside south of the border that are constantly threatening to move north like a fleeing refugee, and wondered whether they aren’t built on the most oxymoronic of business models.
Let’s take private prisons first. The aim of society is to produce as few felons as possible, and where they sadly and inevitably manifest themselves, to incarcerate and rehabilitate them for life on the outside as quickly as possible. Therefore the KPI (key performance indicator) should be 0% prison population for a society to be judged as progressive and successful. Well, the private business model is based in growth in customers and consumption.
Therefore, in the prison case, we need more prisoners, and each year that population must grow to attract shareholders. The private model is based on increasing prices (costs to the taxpayer) to meet profit targets. And if demand declines due to increased progress of that society, then more criminals must be created in the interest of demand stimulation. I have often wondered whether private prisons are sponsors of street gangs, prostitution and drug trafficking – hell, you gotta feed that demand pipeline!
Now let’s take private medicine. The same healthy demand pipeline is necessary. What is more, we need repeat customers and long term customers to provide for some form of stability to the base. We must never totally cure a customer in case he doesn’t come back. He should be left in a chronic state of dependency on pharmaceutical drugs. And if a supplemental market can be created for secondary drugs that alleviate the side effects of the primary drug, all the better. I know one patient who is on six drugs to counteract one medical condition: one for the primary condition and five for the side effects and the side effects of the side effects of the first drug. Barriers to entry must be created with patents so that drugs can be exploited for maximum profitability. Integrated and alternative forms of preventative medicine should be shut out for they inhibit demand or create demand elsewhere. Product obsolescence must be built in so that drugs can be supplanted with stronger drugs. Viruses become stronger over time they say and therefore the drugs must increase in potency robbing patients of their natural immunity, reducing them to being ever more dependent on pharmaceuticals. I wonder whether private medical providers are secret sponsors of smoking – hell, you gotta feed that demand pipeline!
I’m sure the public versions of prisons and medicare have created their own bloated bureaucracies leading to the accusation that governments would be better suited sticking to passing legislation and getting out of operations. But the public funding tool can also be used to make these institutions better, by allocating to real needs and re-allocating from the bloat, and by holding administrators to measurable and actionable goals. The public version still comes ahead because it is based on zero profit and on the allocation of scarce resources towards the welfare of the community rather than on maximising profits for a small group of shareholders.
And then I reflect on our southern cousins and wonder why the majority of them still don’t get it? Is it because they have never had it before so they are scared of change? Have scheming politicians, minions of the private sector, scared them silly with the “failed” experiments in other countries that have led to long wait times for service, conveniently ignoring the fact that back at home, for some, there is no service at all when it comes to medicare? And in the case of private penal systems, that law enforcement forces rely on fines and penalties to keep their budgets balanced? That despite this privatization, they still have the highest per capita prison population and the highest cost of medicare?
This is a conundrum that I do not have an answer for. Perhaps the path to enlightenment lies in gradual evolution at the state level, until someone hits on a magic bullet that everyone latches on to and the revolution happens. Until then, we wait, and hope like hell that these two systems get stuck at the border and never creep north.