NOT THE SHARPEST KNIFE IN THE DRAWER: Obama Puts The Stamp Of Approval On Government Healthcare “Reform”
President Barack Hussein Obama apparently agrees with those folks who worry that a government-run healthcare insurance program will be as efficient (second item) and fiscally sound as the “cash for clunkers” program. Here’s what he said at his town hall meeting in Portsmouth, NH:
People say, well, how can a private company compete against the government? And my answer is that if the private insurance companies are providing a good bargain, and if the public option has to be self-sustaining - meaning taxpayers aren't subsidizing it, but it has to run on charging premiums and providing good services and a good network of doctors, just like any other private insurer would do - then I think private insurers should be able to compete. … If you think about it, UPS and FedEx are doing just fine, right? No, they are. It's the Post Office that's always having problems.
The U.S. Postal Service is projected to lose $7 billion in 2009 and the same amount in 2010 – this after a succession of postal rate increases since 2006 (first class postage rose 2¢ to $0.39 for the first ounce and is now $0.44) – and thousands of branches coast-to-coast are curtailing services and may be shuttered. Is government-run mail delivery really the best analogy Obama could have come up with to assuage people’s fears about government-run healthcare? Maybe he’s been hanging around Joe Biden too long.
Oh, and, contrary to Obama’s assertions, FedEx and UPS are not “doing just fine.”
While FedEx announced 2Q earnings rose 3 percent ($1.58 per share vs. $1.54 per share a year ago) – barely beating the predictions by Wall Street analysts – the company is cutting costs across the board, reports The Associated Press. To deal with what the company's CEO says will be a “murky” outlook for 2009, the package delivery company has begun a series of cost-saving measures expected to save more than $1 billion, including cutting pay for senior executives 7.5 percent to 10 percent; cutting pay for other workers 5 percent, or reducing their hours; freezing 401(k) contributions for a year and eliminating some bonuses; and closing store locations.
Second-quarter earnings for UPS plunged 16.7 percent ($0.49 per share, compared to $0.85 per share last year). Like FedEx, UPS is cutting costs – shutting down two major air hubs, reducing its fleet, cutting wages - but has also moved into new markets in Eastern Europe and the Middle East to compensate for lower domestic volume.
So staying with Obama’s analogy, as the government struggles to balance per capita costs and aggregate costs, the public plan will reimburse doctors less and less (i.e., cut their pay), which will drive doctors out of the public plan (i.e. shuttering locations) – which limits us to the doctors still in the plan (i.e., longer lines at the fewer locations that are still open). Bottom line: Package delivery is not a good metaphor for healthcare delivery.
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