Wednesday, September 16, 2009

Healthcare and the U.S. Postal Service

The postal service in this country has a problem: According to an article in Parade, volume will drop 14% this year. Rates are on the increase, costs are being cut, and post offices will be closed. There may even be fewer mail deliveries.

The solution: Open it up to competition by letting private industry come in to improve service and to stabilize prices. That is what Professor Michael Crew of Rutgers is quoted as proposing in Parade. Now hold on a minute. This makes sense, but how to resolve the contradiction?

In his healthcare initiatives, President Obama proposes just the opposite: According to him, it’s government that should come into the market and provide competition to insurance companies in the healthcare industry.

So let’s get this straight: The government-run U.S. Postal Service needs competition from private industry to keep it on its toes. On the other hand, according to our president, the private U.S. healthcare industry does not compete well and, therefore, needs competition from the federal government to keep it on its toes!

How, exactly, can the federal government which acknowledges its own inefficiency and a high cost structure in one market claim to have better competitive skills in another market?

Anecdote: Years ago, in Rochester, New York, entrepreneurs had put together a local business that operated only in the downtown area. It picked up and delivered first-class mail from one local business to another. No stamps. This short-lived business was doing remarkably well until the Feds caught up to it. The entrepreneurs were hauled into court and were put out of business by the long reach of U.S. Postal Service attorneys.

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