Healthcare Debate Should Be Informed By Postal Service Model

In the zeal to pass so-called healthcare reform, the Democrats initially tried to ramrod through Congress a "public option", whereby the government would manage a single payer system or the government would regulate most aspects of healthcare service delivery and insurance. This "land-grab" was modified by the Senate and over time rejected by the American public. Cynically and brooking no opposition, the Democrats wanted to act as quickly as possible to transform one-sixth of the American economy before anyone really had a chance to understand its details.

But the passage of time allows the dust to settle and sunshine to act as a "disinfectant", according to Justice Brandeis. So, as the process slowed a bit, more and more faults of the healthcare plan came to light and it wasn't pretty, particularly since it did virtually nothing to control costs except to mandate reductions of government-sponsored medical reimbursement rates. Of course, this brilliant idea didn't take into account that doctors and other medical professionals are free actors and might not take too kindly to reduced pay as the supposed panacea to increase the number of people covered by health insurance.

In many respects, the U.S. Postal Service suffers from the same "public option" maladies as these proposed healthcare schemes. For most of its history, it had a complete monopoly on the delivery of mail throughout the United States. But whenever competing alternatives have arisen by virtue of sheer entrepreneurship, circumstance or technology, the result has always been the same -- the Postal Service could not and would not reform itself to compete despite the many competitive advantages in its favor.

For example, UPS started as a messenger company in 1907, an alternative to use of the Postal Service. Over time, more and more people and business began to rely on UPS for delivery of all many of parcels and goods because it was efficient and reliable even if it cost more than a comparable service available by the Postal Service. Now, UPS and Federal Express and many other companies compete for the delivery of packages and overnight courier mail despite the availability of special delivery.

This has occurred inexorably because the Postal Service never responded to the challenges of the free market and simply assumed that it would either get its fair share of business to be self-sustaining without providing a comparable level of service in the areas in which it was required to compete.

Its last bastion of dominance is regular mail or direct mail advertisements. But with the advent of the fax machine and e-mail, demand for the former has waned with each passing year and with respect to the latter, the costs have become prohibitive to justify the quantities previously enjoyed.

But what has been the government's response? Higher labor costs and faltering services as the workforce has fallen. Instead of demanding and requiring more from its workers and the entire postal service bureaucracy, the federal government has continued to bail out this wasting asset. In private industry, if a business can't at least break-even, it eventually fails. The Postal Services has too long relied on increased postal rates when the cost bears no relationship to the quality of the service provided. The same scenario is equally applicable to public transportation in major cities where service continues to be limited and declining while fares increase even as the price of gasoline has consistently risen over the years.

The question then becomes if the government cannot even manage the Postal Service or public transportation, how is it supposed to oversee the healthcare system in the country which is infinitely more complex and expensive and, again, represents one-sixth of the American economy. In short, it is foolhardy to assume it can do so better than private enterprise incentivized properly and regulated in such a manner to enable healthcare services to be allocated without needless bureaucratic intrusion. The answer is not more government involvement but less: fewer mandates, allow insurance companies, medical professionals and institutions and states to compete to find workable solutions that can be applied nationwide after the best ideas and practices emerge.