Running government like a business

For all the right-wing rhetoric about the importance of running government like a business, most of the pundits here in North Carolina know precious little about that line of work. Getting paid by contributions from the Pope Family Foundation to manufacture opinions as part of a tax-exempt non-profit organization doesn't quite fit the bill, if you catch my drift.

If government today were being run like a business in the area of health services, two things would happen. First off, we'd outsource things that the private sector could do better and cheaper. For example, we'd outsource the vast majority of actual service delivery. The government wouldn't set up hospitals and clinics except when private enterprise fails to fill the need. We'd also outsource drug development and production. That means we'd enter into agreements with private companies for goods and services using contracts with incentives (and penalties) to reduce costs and improve performance every step of the way.

Another thing we'd outsource is transaction processing. We do that already for programs like food stamps. To do this, we'd accept bids from private companies, looking for the most efficient operations in the country. Then we'd hire one or more companies to manage the flow of money and information in order to ensure a high level of accountability. We would outsource auditing to a large public accounting firm. Our contracts all companies would have punitive termination clauses, including severe penalties for misconduct, fraud and abuse.

We would not outsource pricing. Like Walmart or Lowes, a government-managed health plan would have enormous buying power, enough clout to not only negotiate with suppliers, but to actually set prices in some cases. Nor would we outsource governance and strategy. No business in its right mind would ever outsource these two functions. Instead, we'd create a formal and structured collaboration with suppliers that would tap their knowledge of how to operate more efficiently, reduce costs, improve care, and add value. Suppliers to Walmart do that every day.

It's too bad the free-market extremists have drawn a line in the sand on this most basic of human needs. Instead of continuing their siren song about Adam Smith's magic hand, they could be helping pull our country toward the rest of the civilized world by removing personal wealth as the measure of who lives and who dies. But no, that's not in the cards. Ironically, free-marketeers would rather have government impose new regulations on how insurance and drug companies can conduct their affairs.

The United States of America should be in the business of administering a universal health care program to ensure that people have access to the care they need to live healthy lives. No person should be required to take advantage of that care, but everyone should have it available.

Bill Moyers agrees.


Set up a new non-profit corporation

called The American Health Plan. Capitalize it sufficiently so that it could purchase six or seven of the best run insurance companies in the country. Tie payouts to performance over the next ten or twenty years. Once the acquisitions are complete, merge the companies into one national provider. In the meantime, eliminate restrictions imposed by states on who can operate where.

Then let the free-for-all begin. Providers who don't participate would be cut off from access to any federal government funding or tax benefits.

Do I read this right, James?

Are you presenting a scenario that would ultimately become a "single-payer", "government-run" health care system?

"merge the companies into one national provider."

I can't say your suggestion is totally wrong for America especially with my own current situation, but I think the majority of America is against what I think you're proposing (and I could be wrong on what you're saying). If that was ultimately what is presented, I think there is going to be a big backlash with the populace. But, I could be wrong here.

I'm a single payer kind of guy

but as you correctly point out, the Dems capitulated on that before the game even got started.

It's not about a government run health care system ... it's about government handling transaction processing, while working with the supply chain (providers, pharma, etc.) to develop effective governance and policies for practices, fondly known as death panels by my friends on the right.

In my vision, other companies would still exist and would still provide coverage to those who don't want to participate. Sort of like the Postal Service, UPS and Fedex.

USPS, UPS and FedEx

A great analogy there, James.

Many compare the private courier services to the USPS in an "apple and oranges" manner. USPS will delver a letter to any physical address in the US for I think 44 cents. It won't necessarily get there tomorrow, but it will get there in a few days.

FedEx will deliver that letter tomorrow, but maybe not to that physical address, and it will cost you $10-$15 dollars, depending on where it is.


The measure of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little. - FDR

Super comparison, James

Few people in the U.S. would be against having a "government-led" health care system that could and would compete with the insurance companies. I mean, let's be honest here. This would DEFINATELY bring down the cost of health insurance in our country. Wouldn't it be just so great to be able to choose between a government-run health insurance plan vs. an "insurance company" plan.

Somehow, I didn't pick up on that being the "choice" and "option" here. Isn't the real emphasis with HR 3200 to be something that makes sure that those 40 plus million folks that can't afford insurance have availability to it even if they won't have to pay for it? Now, if that's not what this is all about, really, I'm ready to be corrected here.


For all the right-wing rhetoric about the importance of running government like a business...

I don't think it should be run like a business and I'd have a hard time finding serious Conservative commentary that would propose that.

Pick out a few of these 165 thousand hits

185 million hits to see the rhetoric in action. Plenty of people argue against it, but plenty of others make the case.

More important, why do you think government shouldn't be run like a business? Businesses are presumably efficient because of market competition, effective because of the need for profits, and agile because of strategic imperatives. Why wouldn't those principles be good for government?

These days, serious Conservative commentary gives new meaning to the term oxymoron.

This is a good idea

but not for all government services. Checks and balances are designed to protect us from tyranny but are intrinsically non-agile and un-fast. Sometimes governments react quickly and can suspend "normal" operations, ie, waging war. Sometimes the fundamental design simply cannot react quickly enough, ie, Katrina. A good friend of mine once said that Government is not slow--it is operating at design speed. Of course slow and careful should not mean gridlock.

A significant % of government work is already performed by the private sector under contract, and that applies to all levels of government.

I lived in Singapore for many years and I would say that they have the most efficient, well-planned, business-like government on the planet. The tiny island-city-state welds significant economic clout in ASEAN because of their management structure. However their level of control of every aspect of life is notable and is probably more due to their small (geographic) size than any unique capabilities. Politics is not openly discussed there because such emotional venues might disrupt the stability of the country. Multiple parties are in play, but the main one always "wins".



There cannot fail to be more kinds of things, as nature grows further disclosed. - Sir Francis Bacon

"Run Government Like a Business"... a trans-partisan colloquialism.

Bill Clinton used it when talking about government efficiency, I remember listening to NPR during the election and hearing then-candidate Obama praise the virtues of Wal-Mart's supply chain management. One of the first of the President's "czars" was a Chief Performance Officer ( And I will admit where my friends on the Right will point out where the marketplace is efficient and extrapolate.

Government can and should learn from commercial businesses in application of technology and process improvement; but the Federal Constitution and the State Constitutions outline the areas where the government operate. I see these more as confines than starting points; because government operates through force.

If government were to operate like a business, then it would revisit its "service areas" and occassionally refocus on those that give a more profitable return. I don't want this to happen. I want a government that will fairly and effectively serve its purpose and focus on that.

Leave the rest to We The People.

I mostly agree with you

except for the part about "we the people." I consider government to be a way for "we the people" to work as a collective to get certain things accomplished.

Constitutions as "confines" assumes there is a literal interpretation of those documents that everyone agrees with, which of course there is not.


Reminds me of the presentations in the Bible, actually.

"Constitutions as "confines" assumes there is a LITERAL INTERPRETATION of those documents that everyone agrees with, which of course there is not."

And here is a fundamental difference between me and you

When I read "We The People", I think of individuals, communities, groups of communities, individual states, and then the Federal Government. While for some things I want a big, lumbering, centralized government (defense) for other things - not so much (human services).

A community is something I want to be a part of. A "collective" is something I want to fight.

Thankfully, there's a 10th Amendment to the US Constitution.


Collective: a collective body; a gathering; a collection of extracts; a number of individuals working or acting together

Sounds like you're more in the "red scare" arena than in the "thoughtful consideration" arena.

Damn that interstate commerce clause!

Measuring "profit" of government services

How does one measure the "profitable return" of, say, the military, or the National Park Service, or the Transportation Security Administration?

It's easy to claim, for example, that there has not been a hijacking since the TSA was created. But could that same result have been accomplished for less investment or lower operating cost? That is, I believe, a legitimate "business" question.

On the other hand, how does one measure the value of the Great Smoky Mountains National Park in terms of "refocusing" on a "more profitable return"?

The bottom line is that much of the expense of government is what a business would consider to be "overhead."


The measure of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little. - FDR


The best way to ensure that the government system is competitive and is run efficiently is to make it entirely dependent on voluntary donations and user fees, and place it on the same legal playing field as any organization run by a non-state individual.

That probably won't happen, however, so I would prefer to see a resurgence of mutual aid societies.

"The natural wage of labor is its product." -- Benjamin R. Tucker
A liberal is someone who thinks the system is broken and needs to be fixed, whereas a radical understands it’s working the way it’s supposed to.

Running Government like a Business...

As James correctly points out in his blog, there are many principles of effective business management that the government can use to improve efficiency and reduce costs of providing government services. Yet the fundamental difference between government and business, it seems to me, is the goal of each. Government needs to be organized to provide the most services at the least cost. Business aims to maximize revenue while reducing costs.

Business is in the business of making a profit for the shareholders in the business. The way to make a profit is not by providing the most or best services, except as an ancillary means toward increasing market share (and therefore revenue). Rather, the way to make a profit is to provide a reasonable level of service for the cost the customer is willing to pay.

Government, on the other hand, is in the "business" of providing some uniform level of service, with the costs of that service shared by all. The military doesn't exist to generate revenue for the government. Rather it provides the "service" of national security to all, with costs borne by all.

And there are some "in-between" things, like the government-regulated monopoly that delivers electrical power to our homes and businesses. Whatever the specific problems with that, leaders generations ago chose that particular model as the best way to deliver retail electricity while avoiding the problems with monopolies, over having three or four high voltage lines down every street with the customer able to choose which company to connect to.

And that's kinda, sorta, what we've done with health insurance to some extent, although technically not a monopoly. Except that unlike with electricity, we haven't mandated that the health insurance industry make policies available at relatively uniform rates to every person.

Sorry for the rambling, and I stand by for shots across the bow...


The measure of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little. - FDR

Nice thinking

Thanks for contributing this.