The Case for Postal-Style Healthcare

Here is a nifty little article suggesting that public healthcare should be run like the Post Office. The idea is that the Post Office serves as a stimulus to private industry to do a better and more efficient job. Hence, the success of United Parcel Service.

You’ve heard the refrain: If the government ran healthcare, it would be just like the U.S. Postal Service. And nobody wants that.

Or do we? The USPS, an independent government agency, is the convenient butt of jokes regarding poor service, rude employees, and occasional government mangling of personal property. It routinely borrows from the government to cover operating losses and endures disruptive political meddling in basic management decisions.

Despite the disparaging clich├ęs, however, the Postal Service has some attributes that might make it a strong model for healthcare. It provides a basic service that’s not available from the private sector. To people without health coverage, postal-style healthcare might be a lot better than none at all. If service in a government healthcare plan turned out to be surly, that might even be a good thing: It would ensure a healthy market for better-run private plans, reducing fears of a government takeover. Oh, yeah, there’s one other thing: In
customer satisfaction surveys, the Postal Service already scores higher than health insurers.

Postal put-downs imply that private-sector businesses are more prompt, courteous, and efficient than anything run by the government. But that’s not always true. Some companies prioritize quality and service, but others have a habit of cutting corners to reduce costs and increase profits. That’s why shoppers struggle at the self-checkout line in grocery and home-improvement stores, and it takes forever to get a live human on the customer-support hotline. Microsoft is one of the most profitable companies in the world, but when was the last time a friendly employee came on the line to help you solve a problem with Windows or Excel? Instead, Microsoft shunts you off to its help and support Web site to hunt around for solutions. (Maybe that’s one reason it’s so profitable.)

Firms like FedEx and UPS compete with some of the services the Postal Service offers. That’s because they’ve targeted parts of the delivery business that can be profitable if run efficiently. But they want nothing to do with universal mail delivery, which would be a guaranteed money-loser. Gee, that sounds a lot like insurance companies that want to cherry-pick the profitable parts of the healthcare business, offering care to healthy people with employers who can help pay the premiums while steering clear of people with costly problems or less money to spend.

In the mail business, the Postal Service is the deliverer of last resort, required by law to provide a “fundamental service” to the American people “at fair and reasonable rates.” But our healthcare system doesn’t have a last-resort provider offering basic service at reasonable rates. As a nation, we support universal mail delivery but not universal healthcare.

Let’s just assume that if there ever is a federal healthcare option, it will be as inefficient as we consider the post office to be. So what? If service were poor, plan participants would have an incentive to look elsewhere for care, the way most businesses requiring quick package delivery choose FedEx or UPS over the Postal Service. Since private plans would presumably be more efficient, they’d have a built-in competitive advantage and would still appeal to employers and individuals who can afford their own coverage. The postal-style plan, meanwhile, would provide basic service to a lot of people who couldn’t get it anywhere else–while providing fresh fodder, valid or not, for the late-night comedians.
Rick Newman