Friday, August 21, 2009

Obamacare Based on Broken Maine Health Care Model

It never ceases to amaze me how people believe government can give thousands or millions of people free stuff and think government can do it without raising taxes. Even richer is the idea that government can do all this more efficiently than any other organization. 

Here is an article about the failure of the Maine Health Care system. Maine tried to provide universal health care and now their system is out of money and on the brink of failure. Ironically, the Obama health care plan is based on the Maine model.

Why do Democrats think government is always the answer? I suppose people just don't realize the hierarchy of inefficiency. Based on Maslow's hierarchy of needs, here is Neal's hierarchy of efficiencies-from highest efficiency to lowest efficiency.

1. The individual. 
2. A collection of individuals
3. A small business owner to provide services directly to individuals
4. A local government with limited responsibilities
5. A medium sized privately held business with less than 3 layers from owner to consumer of goods
6. A large privately held business with less than 5 layers from owner to consumers
7. A state government with limited responsibilities
8. A local government with unlimited responsibilities
9. A large publicly held business with more than 5 layers from shareholders to consumers
9. A state government with unlimited responsibilities
10. A federal government with limited responsibilities
11. Any organization with a strong union that pays people not to work
12. A federal government with unlimited responsibilities

Why would someone even want to compile a list like this? Competition runs the world. Every individual must work in a competitive environment to be the most efficient. The more people in an organization working in a non-competitive environment, the more inefficient the organization will be.

Everyone must understand that individuals must work under risk and reward, cause and effect decision making. An individual is best suited to know exactly what he or she needs. They have the most likely ability to change their situation through hard work and perseverance. Individuals, acting and weighing decisions in a thoughtful way can enjoy the most amount of freedom, but must act within a prism of responsibility. If an individual knows a decision is risky, and they determine they can survive by taking that risk, they are able to proceed. In this, they are acting responsibility. 

The more complex the organization, the less responsibility each person in the organization has. It is for this reason, a small business can change faster than a big business. While big business has more ability to raise capital and reach more consumers, change happens more slowly in a big business because too many people have to be involved in the decision to change. The investors of a publicly traded company is less aware of the entire organization, and it is easier to lose control of the individuals working in that corporation.

A large federal government is the least efficient system of all, because there is no incentive to change or modernize. The individual workers are a part of a monolith system that discourages risk as decisions are made out of fear of risk, not a desire to improve. The money that is received through the budgeting process does not come from the consumers voluntarily by a good or service that is purchased, but rather by a free service that is rendered to everyone equally. Consumers don't bear the true cost of the service provided in any government program.

Why isn't there a desire to change in government? Because the workers look at their job as permanent. There is no metrix that measures a good employee from a bad employee, except whether the person puts in the proper number of hours. There is no reward for taking risks or changing the system. The only incentive is to spend the entire budget so that next year they can ask for more money. There are no money saving incentives in government or by government employees. 

It is for this reason, a big government is the least effective and most inefficient organization every created by man.

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