A Private Obsession

Source: PAUL KRUGMAN, New York Times (subscription required), Nov 18, 2005

…… Earlier this year Senator Rick Santorum introduced a bill that would have forced the National Weather Service to limit the weather information directly available to the public. Although he didn’t say so explicitly, he wanted the service to funnel that information through private forecasters instead. Mr. Santorum’s bill didn’t go anywhere. But it was a classic attempt to force gratuitous privatization: involving private corporations in the delivery of public services even when those corporations have no useful role to play. The Medicare drug benefit is an example of gratuitous privatization on a grand scale. ….. A number of studies have found that managed-care plans, which have much higher administrative costs than government-managed Medicare, end up costing the system money, not saving it. But privatization, once promoted as a way to save money, has become a goal in itself. The 2003 bill that established the prescription drug benefit also locked in large subsidies for managed care.