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Last Updated: Feb 13, 2017 - 1:45:37 AM |
 What is the difference between a government monopoly and a private monopoly?
What is the difference between a socialist and a capitalist?
Every time you turn around, somebody is complaining about the "Government."
What they should in fact be complaining about is the creation of government monopolies.
We should be careful not to jump from the frying pan into the fire by becoming so anxious that we are prepared to change the government monopoly and substitute it with a private monopoly.
At least with a government we can (theoretically) change it every five years. A private monopoly can't be changed as easily.
And now let us look at socialism as opposed to capitalism. A pure socialist believes that he/she must feed the population with a fish every day. In this way the population is beholden to him/her: they're slaves to the system. They can be controlled.
A capitalist, on the other hand, teaches the population how to fish with the hopes that the day will arrive when the population buys boats, trades with each other and thus creates a vibrant, independent and free economy.
Now how does all this tie into the current affairs facing this country? The National Health system is what I'm referring to. Where have we gone and where do we want to go?
Let us turn the clock back to many moons ago. When my brother and I went into business, we had a staff of 15/20 people. We decided that we all needed health insurance. In those days there was no National Insurance.
We shopped around and finally decided on a plan. The plan we bought covered each member of the staff, their spouses and children for one-million dollars with a ten-thousand dollar life insurance rider. It covered both catastrophic and general health issues.
Who paid the premiums? We did. The staff paid NOTHING and did not have to have cookouts to pay for any illness. And, the Government paid nothing.
This was possible because there was competition in the health insurance industry. We had a number of insurance companies to choose from, with each offering several plans. Because there was a large market of buyers (people) and sellers (insurance companies) the premiums were cheap.
Many companies had similar health insurance plans for their employees and, like us, paid the health insurance premiums.
Pensions were not included in some of these plans; however, had the government approached the private sector and asked them to adjust their plans to include pensions, there would have been no problem.
For businesses that didn't offer health insurance, the government could have provided the business community with incentives that would encourage those businesses to provide health insurance for their employees. Trade unions could have used it as an incentive when negotiating pay packages for their members, and all would be happy.
And what about the unemployed? If the government spent its time creating incentives for businesses, there would be no unemployment. Pie in the sky? Check it out; in the late 50's and early 60's The Bahamas was one of the only places in the world where there was no unemployment!!
Then the Socialist minded politicians came. They had to control everything. They had to feed the people fish, instead of teaching them how to fish.
The National Insurance Board (NIB) was formed. Its package did not cover catastrophic events, but it did cover pensions, etc.
We were told that we could keep our group health insurance but we also had to pay National Insurance. We could not afford both. Since National Insurance was a MUST we had no choice but to cancel our group health insurance.
What was the effect? Since the market for private health insurance had drastically shrunk due to the government NIB monopoly, the price of private policies increased drastically and most people dropped them.
But the Government had created a monopoly for National Insurance and what has happened to it? Private insurance companies invest their premiums and get returns on their investments so that when they have to payout claims, there is money to meet the demand.
How has the National Insurance Board invested its money? What are their returns? If you read the current report regarding the shenanigans with some of the top brass at NIB maybe your hair would stand on end! But it's government. What's more, it's a government monopoly.
Some of the finest and most capable people work at National Insurance, but a monopoly, especially a government monopoly, breeds corruption, slackness and bad direction.
More important, in the long run, when private insurance companies are faced with a government monopoly, they will shrink in size and lay off staff. Yes, the economy shrinks. Growth in the industry narrows, unemployment increases, and the economy suffers.
And now with the government's proposed National Health plan, a small, tightly knit group of people has gotten together, and say they can run the National Health program more efficiently. Since this new group is a monopoly, they can hire the doctors and the nurses and dictate the salaries.
Since they will be a private monopoly, they say they will be in a position to negotiate the best price with the insurance companies. Sounds good, doesn't it? But if the contract is for three years, what happens to the other health insurance companies in the mean time? Obviously, they reduce the size of their operation, layoff staff, and no longer offer health insurance plans.
So now after three years of this health monopoly there will only be one insurance company to negotiate with. And guess who will own that? And guess what the price for the premiums will be!!!
And now they will also control all the medical records. So when a politician wants to talk about somebody in the House of Assembly, he/she will be able to readily find your medical records "in the garbage tin!"
They say that a certain amount is being put aside for catastrophic events. What happens when more people need it than there is to go around? Who gets it? I wouldn't like to be the one who needed it and some PLP or FNM politician was making the decision as to who got it. I'd be six feet under and pushing lilies!!!!
They also say there will be a savings in administrative staff. That may be true. But have the good doctors ever heard of the law of diminishing returns? In other words, when the ownership and administrative staff is so centralised, it becomes top-heavy, corrupt, inefficient and a monopoly.
Looking at the structures of these proposed new companies, it seems as though there are a lot of generals and board members to take the first share of the pie!!!
I don't know what KPMG has advised Government, but I'm sure that anyone with two ounces of sense should know that, with unemployment high, the country's credit rating downgraded, and businesses folding like dominoes, the country cannot afford the program that the government appears to be proposing.
With all of these problems, can the government tell the public where the money is coming from?
On the surface, it appears that the old Bay Street Boys, who were supposed to have disappeared a long time ago, were merely spending a lot of time on the beach getting a suntan and have now returned more powerful and more brassy than before!!
Important Footnote
Just like doctors, there are many good, kind and generous lawyers in The Bahamas. But there are many, especially young people, who go to jail because they do not have legal representation when they go to court, or when they need good legal advice.
So let's make a deal. Every time the members of the House of Assembly (mostly lawyers) make a law or decision affecting the medical profession, let them make an identical law affecting the legal profession. If this were to happen, common sense would quickly kick in and sanity would prevail.
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