tag:theconversation.com,2011:/us/topics/privatization-36226/articlesPrivatization – The Conversation2023-01-02T12:40:39Ztag:theconversation.com,2011:article/1944582023-01-02T12:40:39Z2023-01-02T12:40:39ZWhy for-profit homes won’t solve long-term care issues: Privatizing health services is a bad idea that just won’t go away<figure><img src="https://images.theconversation.com/files/501832/original/file-20221219-24-14elyv.jpg?ixlib=rb-1.1.0&rect=5%2C26%2C3589%2C2549&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">People protest outside the Tendercare Living Centre long-term-care facility in Scarborough, Ont. during the COVID-19 pandemic in December 2020. This LTC home was hit hard by the second wave of COVID-19.
</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Nathan Denette</span></span></figcaption></figure><iframe style="width: 100%; height: 100px; border: none; position: relative; z-index: 1;" allowtransparency="" allow="clipboard-read; clipboard-write" src="https://narrations.ad-auris.com/widget/the-conversation-canada/why-for-profit-homes-won-t-solve-long-term-care-issues--privatizing-health-services-is-a-bad-idea-that-just-won-t-go-away" width="100%" height="400"></iframe>
<p>Canadian health economist Robert Evans called them <a href="https://chspr.sites.olt.ubc.ca/files/2019/10/hpru98-05D_Barer_et_al_Lies_damned_lies.pdf">zombies</a>: ideas killed long ago by evidence, but re-emerging from the grave — often in disguise.</p>
<p>He was talking about user fees for health services. Such fees primarily mean that <a href="https://files.ontario.ca/mltc-long-term-care-staffing-study-en-2020-07-31.pdf">the poor go without care while the rich may get care they don’t need</a>, but they also add to the bureaucracy required to bill for services. </p>
<p>Now the zombie is re-emerging in the form of handing over more publicly funded services to for-profit companies.</p>
<p>Privatization in health care can take many forms. In British Columbia, there is an increase in doctors’ offices <a href="https://www.policynote.ca/corporate-medicine/">charging user</a> and <a href="https://www.theglobeandmail.com/canada/british-columbia/article-victoria-clinics-charge-subscription-fee-for-access-to-a-family-doctor/">subscription fees</a>, but there is also the emergence of new corporations <a href="https://pressprogress.ca/here-are-all-the-corporations-lobbying-doug-ford-to-privatize-and-outsource-parts-of-ontarios-health-care-system/">offering to manage health services</a>. </p>
<p>Québec, along with many other provinces, is increasingly relying on private sector agencies to supply <a href="https://montreal.ctvnews.ca/quebec-spending-on-private-health-care-workers-up-by-335-in-last-5-years-amid-labour-shortage-1.6020491">health-care workers</a>, while Ontario is investing in more <a href="https://www.ontariohealthcoalition.ca/index.php/release-ford-government-is-awarding-thousands-of-long-term-care-beds-to-for-profit-chains-with-ghastly-records-of-death-and-suffering-new-coalition-report/">for-profit long-term care beds</a>. </p>
<h2>Private sector myths</h2>
<p>COVID-19’s impact on the health sector, along with government promises for increased investment, has offered a new opportunity for the privatization zombies to re-emerge. There are now calls to have the <a href="https://financialpost.com/opinion/peter-shawn-taylor-why-canada-needs-for-profit-nursing-homes">for-profit sector</a> solve the crisis. </p>
<p>The arguments are not new: the private sector will add services, the private sector will offer more choices, the private sector does things more efficiently, the private sector provides better quality and the private sector is more <a href="https://www.thespec.com/opinion/contributors/2022/08/30/doug-fords-familiar-refrain-on-private-health-care.html">innovative</a>. But the old and new evidence from <a href="https://files.ontario.ca/mltc-ltcc-final-report-en-2021-04-30.pdf">long-term care homes in Ontario</a> should kill these arguments yet again.</p>
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<a href="https://images.theconversation.com/files/501833/original/file-20221219-12-zrzgqm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A person wearing PPE beside a gurney behind a van." src="https://images.theconversation.com/files/501833/original/file-20221219-12-zrzgqm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/501833/original/file-20221219-12-zrzgqm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=423&fit=crop&dpr=1 600w, https://images.theconversation.com/files/501833/original/file-20221219-12-zrzgqm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=423&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/501833/original/file-20221219-12-zrzgqm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=423&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/501833/original/file-20221219-12-zrzgqm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=532&fit=crop&dpr=1 754w, https://images.theconversation.com/files/501833/original/file-20221219-12-zrzgqm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=532&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/501833/original/file-20221219-12-zrzgqm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=532&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">A body is wheeled from the Eatonville Care Centre in Toronto, where multiple deaths from COVID-19 occurred, in April 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Nathan Denette</span></span>
</figcaption>
</figure>
<p>Expanding the for-profit sector has not worked in Ontario long-term care, where <a href="https://www.cihi.ca/en/long-term-care-homes-in-canada-how-many-and-who-owns-them">nearly 60 per cent of the homes are for-profit</a>. The claim that for-profit services are better because competing for customers pushes them to offer better quality at lower costs while shouldering the financial risks is not supported by the evidence. With <a href="https://news.ontario.ca/en/release/1001009/ontario-welcomes-new-long-term-care-development-proposals">38,000 people waiting</a> to get into long-term care, there is no competition at all. </p>
<p>Offered a choice, people tend to choose a non-profit or municipal home, mainly because Ontario for-profit homes are more likely to be old, to have four-bed rooms, to have the lowest staffing levels and to do more transfers to hospitals, to name only a <a href="https://files.ontario.ca/mltc-long-term-care-staffing-study-en-2020-07-31.pdf">few reasons</a>. </p>
<p>They also had a much higher proportion of residents die from COVID-19 early in the pandemic, with <a href="https://www.thestar.com/politics/provincial/2021/01/20/ontarios-for-profit-nursing-homes-have-78-more-covid-19-deaths-than-non-profits-report-finds.html">78 per cent</a>
more deaths than non-profit long-term care homes.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/501838/original/file-20221219-24-b09m6k.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Three people wearing PPE over armed forces uniforms" src="https://images.theconversation.com/files/501838/original/file-20221219-24-b09m6k.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/501838/original/file-20221219-24-b09m6k.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=417&fit=crop&dpr=1 600w, https://images.theconversation.com/files/501838/original/file-20221219-24-b09m6k.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=417&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/501838/original/file-20221219-24-b09m6k.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=417&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/501838/original/file-20221219-24-b09m6k.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=525&fit=crop&dpr=1 754w, https://images.theconversation.com/files/501838/original/file-20221219-24-b09m6k.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=525&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/501838/original/file-20221219-24-b09m6k.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=525&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Members of the Canadian Forces assisting with COVID-19 care wash down a laundry bin in the parking lot of Altamont Care Community in Toronto in June 2020.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Frank Gunn</span></span>
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</figure>
<p>Three of the four homes where the <a href="https://www.cbc.ca/news/canada/toronto/covid-19-coronavirus-ontario-update-may-26-1.5584665">military was sent in to rescue residents and staff</a> early in the pandemic were for-profit and none were municipal. Yet these homes, with their beds primarily funded by the government, are virtually guaranteed a full house, so there is little financial risk. But there is no guarantee that care will be available given these homes might close if the land becomes valuable for re-development, or they might simply go out of business. </p>
<p>At the same time, with all homes <a href="https://www.ontario.ca/page/long-term-care-homes-level-care-diem-occupancy-and-acuity-adjustment-funding-policy">receiving the same funding and resident fees established by the government for all nursing homes</a>, there is no cost-saving to the government in for-profits delivering care.</p>
<h2>Profit is not innovation</h2>
<p>The Ontario minister of health says we need to look to the <a href="https://globalnews.ca/news/9053147/ontario-health-minister-says-access-through-ohip-wont-change/">private sector for innovation</a>. But it’s hard to see any examples of innovation from private long-term care homes, except when it comes to how to make a profit. Long-term care owners like Extendicare and Sienna “<a href="https://www.thestar.com/business/2022/08/13/the-faceoff-two-years-after-covid-19-ravaged-long-term-care-homes-for-profit-operators-extendicare-and-sienna-are-raking-in-millions-in-revenue.html">are raking in millions</a>.” </p>
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<img alt="Small crosses in grass with a building in the background" src="https://images.theconversation.com/files/501839/original/file-20221219-20-quz82v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/501839/original/file-20221219-20-quz82v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=417&fit=crop&dpr=1 600w, https://images.theconversation.com/files/501839/original/file-20221219-20-quz82v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=417&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/501839/original/file-20221219-20-quz82v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=417&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/501839/original/file-20221219-20-quz82v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=523&fit=crop&dpr=1 754w, https://images.theconversation.com/files/501839/original/file-20221219-20-quz82v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=523&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/501839/original/file-20221219-20-quz82v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=523&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Crosses mark the deaths of multiple people from an Ontario care home during the COVID-19 pandemic.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Nathan Denette</span></span>
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<p>Meanwhile, public information on these homes is limited. We don’t really know where all the profit comes from, in part because they are allowed to keep some business secrets. We do know that <a href="https://www.ontario.ca/page/long-term-care-staffing-study">wages tend to be lower in Ontario for-profit homes</a> compared to municipal ones.</p>
<p>Privatization can mean seeking profit by selling more services and paying less for things like food and supplies while limiting as much work time as possible, none of which promotes quality care. It mainly means being responsible to shareholders. </p>
<p>For-profit ownership of health services can mean cherry-picking patients with the least complex needs and rejecting others, while quickly transferring any negative outcomes back to public facilities. We have seen this in private retirement homes where people can be kicked out if their <a href="https://www.rhra.ca/wp-content/uploads/2018/05/Fact-Sheet-re-Retirement-Homes-May-2018-final.pdf">needs become too complex</a>. </p>
<h2>Access, costs and alternatives</h2>
<p>The argument that privatization will speed up access to care does not necessarily mean good care, and can entail risks. And speed for some who pay can mean care that’s too late for others who cannot pay. We have seen examples of all these with <a href="https://www.nationalobserver.com/2016/11/22/opinion/cherry-picking-healthiest-wealthiest-patients-reality-private-pay-healthcare">for-profit care</a>.</p>
<p>Meanwhile, for-profit services do nothing to address the major crisis in labour force supply, do nothing about public costs and do too little about public access to care. In fact, they do the reverse; they drain the public system of both people and money. Adding more for-profit services fragments a system already suffering from fragmentation.</p>
<p>There are alternatives. There is no reason not to expand the public sector when it is the public sector that will be paying. There is no reason why we cannot innovate and reduce fragmentation within the public system. </p>
<p>Indeed, we have many examples of <a href="https://www.canada.ca/en/health-canada/services/publications/health-system-services/report-advisory-panel-healthcare-innovation.html">innovation within the public system</a>. And the public sector is in a position to quickly offer better work for health-care workers who are at the centre of our health-care system, and more equitable access for all. </p>
<p>Let’s kill this zombie once and for all.</p><img src="https://counter.theconversation.com/content/194458/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Pat Armstrong receives funding from SSHRC She is affiliated with the Canadian Health Coalition</span></em></p><p class="fine-print"><em><span>Marjorie Griffin Cohen does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Privatization is an idea that — like a zombie —just won’t die. It’s re-emerging with calls to solve the long-term care crisis with for-profit care homes. Evidence refutes the same old arguments.Pat Armstrong, Distinguished Research Professor of Sociology, York University, CanadaMarjorie Griffin Cohen, Professor emeritus, Simon Fraser UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1909532022-09-21T12:34:00Z2022-09-21T12:34:00ZPuerto Rico’s vulnerability to hurricanes is magnified by weak government and bureaucratic roadblocks<figure><img src="https://images.theconversation.com/files/485696/original/file-20220920-11238-5tmdt3.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5472%2C3637&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A worker cuts an electricity pole downed by Hurricane Fiona in Cayey, Puerto Rico, on Sept. 18, 2022.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/PuertoRicoTropicalWeather/c53b19c43d874156905a6556f4fd4a9c/photo"> AP Photo/Stephanie Roja</a></span></figcaption></figure><p><em>Five years after <a href="https://www.nhc.noaa.gov/data/tcr/AL152017_Maria.pdf">Hurricane Maria</a> wreaked havoc on Puerto Rico, <a href="https://www.nytimes.com/live/2022/09/19/us/hurricane-fiona-puerto-rico">Hurricane Fiona</a> has killed at least four people, caused widespread flooding and left hundreds of thousands of residents <a href="https://www.nbcnews.com/news/latino/puerto-ricans-assess-hurricane-fiona-devastation-5-years-maria-rcna48516">without water or power</a>. Maria caused extensive damage to Puerto Rico’s power grid in 2017 that left many residents without electricity for months. Rebuilding it has been hampered by technical, political and financial challenges.</em></p>
<p><em>Carlos A. Suárez and Fernando Tormos-Aponte are social scientists who study Latin American politics and environmental justice. They explain some of the factors that have hindered efforts to recover from Maria and prepare for subsequent storms on this island with a population of <a href="https://www.census.gov/quickfacts/PR">3.2 million people</a>.</em></p>
<h2>Failed promises from privatization</h2>
<p><strong>Carlos A. Suárez Carrasquillo, Associate Instructional Professor, Political Science, Center for Latin American Studies, University of Florida</strong></p>
<p>In less than a century, Puerto Rico’s electricity system has gone full circle from private provision of electric power to a state-led effort to democratize access to power, and then back to a public-private partnership with a strong <a href="https://theconversation.com/what-is-neoliberalism-a-political-scientist-explains-the-use-and-evolution-of-the-term-184711">neoliberal</a> ethos. Yet Puerto Ricans still face daily challenges in obtaining affordable and efficient electricity services. </p>
<p>When the island’s electric power system was created in the late 1800s, private companies initially produced and sold electricity. During the New Deal era in the 1930s, the government took over this role. People came to see electric power as a <a href="https://www.elnuevodia.com/noticias/locales/videos/legisladores-defienden-la-aee-como-un-patrimonio-nacional-272466/">patrimonio, or birthright</a>, that the government would provide, at times by <a href="https://aeepr.com/es-pr/Site-Servicios/Manuales/PREPA%20New%20Rate%20Structure%20Presentation%20-%20Internet.pdf">subsidizing power for lower-income residents</a>. </p>
<p>In the 1940s, Puerto Rico launched <a href="https://cdn.theconversation.com/static_files/files/2318/Quin%CC%83ones_and_Seda_%282016%29_Wealth_Extraction__Governmental_Servitude.pdf">Operation Bootstrap</a>, a rapid industrialization program that sought to attract foreign investments in industries such as textiles and petrochemicals. One important element was reliable and cheap electricity, provided by the state through the Autoridad de Energía Eléctrica, a public corporation known in English as the <a href="https://www.aafaf.pr.gov/relations-articles/puerto-rico-electric-power-authority-prepa/">Puerto Rico Electric Power Authority, or PREPA</a>.</p>
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<figcaption><span class="caption">Damage from Hurricane Fiona, which dropped over 30 inches of rain on Puerto Rico, has set back post-Hurricane Maria recovery efforts.</span></figcaption>
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<p>Many interests coalesced around PREPA, including elected officials, labor unions, the <a href="https://www.noticel.com/article/20190703/larga-la-cola-de-sospechas-del-cartel-del-petroleo/">domestic oil importers</a> and, most importantly, the Puerto Rican public. Patronage and party politics often influenced the company’s <a href="https://dialogo.upr.edu/aee-ha-sido-el-balon-politico-y-la-joya-de-la-corona-segun-agp/">hiring, contracting and financial decisions</a>. </p>
<p>PREPA took on significant debt, often at the request of elected officials. For example, in 2011, then-Speaker of the House Jennifer González legislated for the company to obtain a line of credit from the Banco Gubernamental de Fomento in order to <a href="https://www.elnuevodia.com/noticias/locales/notas/jenniffer-gonzalez-defiende-linea-de-credito-para-la-aee/">reduce power bills ahead of the 2012 elections</a>. </p>
<p>Gov. Alejandro García Padilla and Puerto Rico’s Financial Oversight and Management Board <a href="https://dialogo.upr.edu/mas-medidas-de-austeridad-aprobadas-tras-reunion-de-la-jcf/">imposed austerity policies in 2012-2017</a> that subsequent governors have kept in place. This left PREPA with limited resources to prepare for Hurricane Maria or make repairs afterward. </p>
<p>In 2021, Puerto Rico’s government and the financial control board privatized power delivery on the island. PREPA continued to generate electricity, but <a href="https://apnews.com/article/caribbean-puerto-rico-business-135b9ec52e130f3716f8862021a524d4">LUMA Energy</a>, a U.S.-Canadian consortium, received a 15-year contract to <a href="https://www.theweeklyjournal.com/politics/prepa-governing-board-approved-luma-contract-after-43-minute-meeting/article_b4399670-7deb-11eb-a4ee-f37571d32c44.html">transmit and deliver power to customers</a>. </p>
<p>LUMA is at the center of many controversies. It has resisted recognizing the largest and most powerful union in Puerto Rico as its employees’ <a href="https://www.sanjuandailystar.com/post/utier-chief-not-surprised-luma-chose-another-union">exclusive representative</a>. Many consumers’ monthly electric bills have <a href="https://www.elnuevodia.com/noticias/locales/notas/luma-energy-pide-un-aumento-de-171-en-la-factura-de-luz-de-julio-a-septiembre/">increased significantly</a>. LUMA was supposed to upgrade Puerto Rico’s grid, with billions of dollars in federal support, but <a href="https://www.washingtonpost.com/nation/2021/11/16/puerto-rico-luma-energy/">outages continued</a>. Critics have called the company <a href="https://www.elcalce.com/contexto/2022/04/08/vicepresidente-de-luma-dedica-poesia-a-pr-pa-que-la-gente-recuerde-que-no-son-tan-malos">secretive</a> and <a href="https://www.elnuevodia.com/english/news/story/luma-awards-contract-to-ray-chacon-a-friend-of-former-governor-luis-fortuno/">corrupt</a>.</p>
<p>Labor groups, environmentalists and academics have offered comprehensive alternatives, such as <a href="https://www.queremossolpr.com/">Queremos Sol</a>, a proposal to install distributed solar power across the island, to reduce Puerto Rico’s dependence on fossil fuels and what they see as incompetent private administration. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1572308213227491328"}"></div></p>
<p>But the changes needed to address Puerto Rico’s energy crisis are inherently political. Enacting them will require support from the federal fiscal oversight board and Puerto Rican <a href="https://www.primerahora.com/noticias/gobierno-politica/notas/junta-le-da-la-bienvenida-a-transformacion-en-la-aee/">politicians</a>. I believe the public will have to mobilize and rally to convince authorities that the PREPA of old and LUMA today are antiquated organizations that are unable to meet Puerto Ricans’ current needs. </p>
<h2>Who gets disaster aid?</h2>
<p><strong>Fernando Tormos-Aponte, Assistant Professor of Sociology, University of Pittsburgh</strong></p>
<p>Disaster aid has been slow to come to Puerto Rico. Five years after Hurricane Maria, the U.S. government is channeling funds to rebuild and harden the archipelago’s energy infrastructure. But only a few of the planned multimillion-dollar projects have been even <a href="https://www.fema.gov/press-release/20220606/fema-announces-progress-puerto-ricos-power-grid-work">partially approved</a>. </p>
<p>In addition to privatization of the power system, residents have also contended with bureaucratic obstacles and the <a href="https://doi.org/10.1016/j.enpol.2021.112550">use of disaster resources for political gain</a>. </p>
<p><a href="https://www.governor.ny.gov/sites/default/files/atoms/files/PRERWG_Report_PR_Grid_Resiliency_Report.pdf">Damage assessments</a> after Maria were rough estimates because the storm was so destructive. The U.S. government ultimately calculated total damage to Puerto Rico and the U.S. Virgin islands at <a href="https://www.nhc.noaa.gov/data/tcr/AL152017_Maria.pdf">US$90 billion</a>.</p>
<p>Now, Hurricane Fiona has caused further damage, which will require even more significant investments. No government authority has sufficient resources on the ground in Puerto Rico to conduct such an assessment, let alone react swiftly to the disaster. </p>
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<figcaption><span class="caption">Federal Emergency Management Agency Associate Director Anne Bink describes how experience from Hurricane Maria will shape the response to Hurricane Fiona.</span></figcaption>
</figure>
<p>Local elected officials are often eager to claim responsibility for securing funding. However, investments in disaster preparedness, such as improving the electric grid, <a href="https://doi.org/10.1146/annurev-polisci-032211-212920">have less impact on public perceptions of government performance</a> than recovery funds that are disbursed shortly after a disaster strikes. </p>
<p>I expect that the Biden administration will seek to respond faster and more substantively to Hurricane Fiona than the Trump administration did after Hurricane Maria – but not necessarily out of compassion. </p>
<p>Presidents tend to use disaster resources to <a href="https://www.jstor.org/stable/10.1017/s0022381611000843">gain electoral advantage</a>, <a href="https://doi.org/10.1017/S0003055409990104">reward supporters</a> and portray themselves as capable disaster managers. And they typically are more vulnerable <a href="https://doi.org/10.1111/ajps.12053">in election years</a>. </p>
<p>Maria hit Puerto Rico during Donald Trump’s first year in office. Puerto Rican voters <a href="https://www.politico.com/news/magazine/2020/09/09/puerto-rico-statehood-politics-democrats-republicans-senate-409191">lean Democratic when they move to the U.S. mainland</a> – as a <a href="https://www.britannica.com/place/Puerto-Rico/The-commonwealth">commonwealth</a>, the archipelago does not cast electoral votes – so Trump likely did not perceive Puerto Ricans as important to his election. The Trump administration engaged in deliberate efforts to <a href="https://www.theguardian.com/world/2021/apr/22/hurricane-maria-puerto-rico-trump-delayed-aid">delay disbursing Hurricane María recovery aid</a> and <a href="https://www.npr.org/2018/09/13/647377915/trump-denies-death-toll-in-puerto-rico-falsely-claims-done-by-the-democrats">denied the real toll of the disaster</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/485725/original/file-20220920-3560-e4vmh3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A long line of cars idles on a city street" src="https://images.theconversation.com/files/485725/original/file-20220920-3560-e4vmh3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/485725/original/file-20220920-3560-e4vmh3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=415&fit=crop&dpr=1 600w, https://images.theconversation.com/files/485725/original/file-20220920-3560-e4vmh3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=415&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/485725/original/file-20220920-3560-e4vmh3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=415&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/485725/original/file-20220920-3560-e4vmh3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=521&fit=crop&dpr=1 754w, https://images.theconversation.com/files/485725/original/file-20220920-3560-e4vmh3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=521&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/485725/original/file-20220920-3560-e4vmh3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=521&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">People wait in their vehicles to collect water in San Pedro, Puerto Rico, on Oct. 19, 2017, nearly one month after Hurricane Maria.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/people-wait-in-their-cars-in-line-to-collect-water-nearly-news-photo/863242170">Mario Tama/Getty Images</a></span>
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<p>In contrast, Joe Biden <a href="https://www.bloomberg.com/news/articles/2021-04-30/latino-vote-surge-helped-biden-in-key-states-new-data-suggest">relied more heavily on minority support</a> for his 2020 presidential victory, and Hurricane Fiona has struck just two months before the 2022 midterm elections. Responding offers Biden an opportunity to prove himself a capable disaster manager and attract votes. </p>
<p>Even if the Biden administration is better organized and more responsive, however, marginalized communities often are hampered by <a href="https://www.jstor.org/stable/10.7758/9781610448789">administrative burdens</a> when they try to access government resources. </p>
<p>For example, I have interviewed mayors in Puerto Rico who issued contracts to local providers to address urgent needs after the Federal Emergency Management Agency promised reimbursement. To this day, FEMA has not paid some of these mayors back, and the mayors fear that local vendors will not want to do further business with their governments. </p>
<p>Identifying and applying for U.S. government grants is a complex and tedious process that requires training. Access to that training is uneven, and language barriers often keep communities from seeking grants. </p>
<p>After Hurricane Maria, few Puerto Rican communities had the resources and support needed to cope with these barriers. In my view, governments must prioritize marginalized communities in their response to Hurricane Fiona to avoid reproducing the <a href="https://doi.org/10.1016/j.enpol.2021.112550">inequalities that marked the Hurricane María recovery</a>. Elected officials must demand transparency and accountability from those tasked with distributing aid, while holding themselves to the same standards.</p><img src="https://counter.theconversation.com/content/190953/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Fernando Tormos-Aponte receives funding from the Early Career Faculty Innovator Program at the National Center for Atmospheric Research and the National Oceanic and Atmospheric Administration. He is a fellow at the Union of Concerned Scientist’s Center for Science and Democracy.</span></em></p><p class="fine-print"><em><span>Carlos A. Suárez Carrasquillo does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Hurricane Fiona will set back efforts to restore Puerto Rico that date back five years to Hurricane Maria. Two scholars explain how the island’s weak institutions worsen the impacts of disasters.Carlos A. Suárez Carrasquillo, Senior Lecturer in Political Science, Center for Latin American Studies, University of FloridaFernando Tormos-Aponte, Assistant Professor of Sociology, University of PittsburghLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1582922021-04-05T17:07:22Z2021-04-05T17:07:22ZOntario’s ‘choice’ of fully online school would gamble on children for profit<figure><img src="https://images.theconversation.com/files/393176/original/file-20210401-19-1wd6yxa.jpg?ixlib=rb-1.1.0&rect=0%2C188%2C3000%2C1989&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Students arrive at Dartmouth High School in Dartmouth, N.S., on Sept. 8, 2020. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Andrew Vaughan</span></span></figcaption></figure><p>Despite the lack of data documenting benefits to children, and emerging evidence of several drawbacks and harms, the <a href="https://www.theglobeandmail.com/canada/article-ontario-considers-move-to-make-remote-learning-permanent-for-all/">Ontario government is discussing making full-time online schooling a permanent “choice” in public education</a>. </p>
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Read more:
<a href="https://theconversation.com/school-choice-policies-are-associated-with-increased-separation-of-students-by-social-class-149902">'School choice' policies are associated with increased separation of students by social class</a>
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<p>This idea is being introduced without adequate research, and stands to become the <a href="https://doi.org/10.14288/ce.v10i14.186326">latest measure that</a> raises inequality and <a href="https://journalhosting.ucalgary.ca/index.php/cjeap/article/view/31168">threatens the viability</a> of education as a public good.</p>
<p>The <em>Globe and Mail</em> <a href="https://www.cbc.ca/news/canada/toronto/permanent-online-school-1.5964008">obtained an Ontario Ministry of Education</a> presentation dated March 22, 2021, <a href="https://assets.documentcloud.org/documents/20527907/initiatives-committee-_-expanding-student-access-to-online-and-remote-learning.pdf">detailing the prospect of continued virtual learning</a> after the COVID-19 pandemic. The province aims to partner with <a href="https://www.tvo.org/about">TVO</a> to offer “fully independent online learning” for “Ontario and out-of-province secondary students” and also mentions continuing “synchronous remote learning” for elementary students.</p>
<p>The proposal coincides with apparent plans to continue to help fund Ontario education by selling curriculum abroad. In 2015, Ontario reported it had agreements <a href="http://www.edu.gov.on.ca/eng/policyfunding/strategyK12.pdf">with 19 international private schools that pay the province to deliver the Ontario curriculum</a>.</p>
<h2>Unpacking the known harms</h2>
<p>While the COVID-19 environment has produced unique challenges, many of the greatest difficulties for young people have been associated with the forced shift out of schools and into online learning. Online learning <a href="https://doi.org/10.1080/1358684X.2020.1791691">does not replace</a> the complex, relationship-oriented learning and social environment in schools.</p>
<p>Fully online learning has had consequences for mental health, with increased feelings of <a href="https://doi.org/10.1016/j.worlddev.2020.105225">social isolation</a>. There have also been challenges to physical health, as youth grappled with a <a href="https://doi.org/10.1037/cbs0000215">lack of physical activity</a> and <a href="https://www.cbc.ca/news/canada/toronto/optometrists-see-more-myopia-in-kids-blame-increased-screen-time-amid-pandemic-1.5966183">deteriorating eyesight</a>. Even among older youth learners, motivation and engagement prove difficult to sustain online, with a <a href="https://www.brookings.edu/research/promises-and-pitfalls-of-online-education/">higher potential for dropping out</a> and <a href="https://www.theguardian.com/education/2020/may/04/i-cant-get-motivated-the-students-struggling-with-online-learning">worse outcomes for disadvantaged students</a>. </p>
<p>Despite the negative outcomes associated with full-time online study for youth and without sufficient data to support its rationale, the Ontario government is introducing an unasked for “choice” that would set a detrimental precedent for public education. </p>
<figure class="align-center ">
<img alt="Teens going to school." src="https://images.theconversation.com/files/393184/original/file-20210401-19-lyarqf.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/393184/original/file-20210401-19-lyarqf.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/393184/original/file-20210401-19-lyarqf.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/393184/original/file-20210401-19-lyarqf.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/393184/original/file-20210401-19-lyarqf.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/393184/original/file-20210401-19-lyarqf.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/393184/original/file-20210401-19-lyarqf.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Students arrive for school in Ottawa on Feb. 1, 2021.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Justin Tang</span></span>
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</figure>
<h2>More screen time?</h2>
<p>Some might argue that getting students comfortable with online technologies <a href="https://news.ontario.ca/en/release/54695/ontario-brings-learning-into-the-digital-age">prepares them for future study and the workforce</a>. In my research on youth literacy and online engagement, however, I explore how student proficiency in navigating technology should not be mistaken for understanding complex information. </p>
<p>My work is part of a wider body of emerging research that examines how students make sense of the online environment — and how being online affects their literacy skills, including their capacities to form critical questions and navigate misinformation and disinformation. </p>
<p>I have also determined that <a href="https://doi.org/10.1080/00131857.2020.1803834">literacy learning can be strengthened</a> when students and teachers explore the emotional implications of contentious issues in a classroom community. In other words, leaving students alone in front of screens for even more of their already <a href="https://www.pewresearch.org/internet/2018/05/31/teens-social-media-technology-2018/">online-immersed</a> day does not improve their critical thinking or engagement. </p>
<p>For adolescents, learning online doesn’t replace in-person interactions with teachers, other students and community members. These interactions, far from superficial or inconsequential, are at the heart of how students learn well. In the pandemic, many teachers have voiced concerns about how an online environment <a href="https://theconversation.com/how-to-prevent-teacher-burnout-during-the-coronavirus-pandemic-139353">hampers their ability to tailor learning and to support their students with the full range of strategies</a> that are available in the classroom. </p>
<figure class="align-center ">
<img alt="A teenager learning online" src="https://images.theconversation.com/files/393186/original/file-20210401-23-8gm4c3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/393186/original/file-20210401-23-8gm4c3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/393186/original/file-20210401-23-8gm4c3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/393186/original/file-20210401-23-8gm4c3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/393186/original/file-20210401-23-8gm4c3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/393186/original/file-20210401-23-8gm4c3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/393186/original/file-20210401-23-8gm4c3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">For adolescents, learning online doesn’t replace in-person interactions.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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</figure>
<p>Yet another worrying aspect is the risk to student privacy. There is ongoing concern about how tech companies may be gaining <a href="https://www.vox.com/recode/2020/2/21/21146998/google-new-mexico-children-privacy-school-chromebook-lawsuit">unprecedented insight into children’s lives</a> and how data may be used. </p>
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Read more:
<a href="https://theconversation.com/childrens-privacy-is-at-risk-with-rapid-shifts-to-online-schooling-under-coronavirus-135787">Children's privacy is at risk with rapid shifts to online schooling under coronavirus</a>
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<p>There are also issues of tech monopolies that muddy the line between public education and private enterprise.</p>
<h2>Generating revenue</h2>
<p>Students have opportunities to engage with online learning in Ontario’s current framework. There is <a href="https://theconversation.com/in-doug-fords-e-learning-gamble-high-school-students-will-lose-122826">no need to introduce compulsory online courses</a> or the option of full-time online learning. </p>
<p>With all the issues implied by full-time online learning, why would Ontario consider making this a permanent feature of public education? Before the pandemic, in February 2020, the government <a href="https://theconversation.com/mandatory-e-learning-is-a-problem-in-ontario-high-schools-133041">was striving to introduce mandatory online learning in secondary school</a>. </p>
<p>In a confidential Ontario government document <a href="https://www.thestar.com/politics/provincial/2020/01/13/secret-document-shows-ford-government-changed-its-mind-before-making-online-course-mandatory-for-high-schoolers.html">written sometime between March and August 2019</a> and obtained by the <em>Toronto Star</em>, the current Ford government detailed a plan to dovetail cuts to school board funding with the opportunity to “to develop (a) business model to make available and market Ontario’s online learning system to out-of-province and international students.” It is telling that the document did not foreground the benefits of full-time online learning for students.</p>
<p>The reasons for this shift can be attributed to the ongoing drive to privatize public education through the twin aims of reducing costs and generating new revenue. The 2019 document also mentioned examining “feasible options for selling licensing rights to courses/content to other jurisdictions.” </p>
<h2>Curriculum sales</h2>
<p>The current discussions should be seen in the context of Ontario’s drive to <a href="https://theconversation.com/canadas-high-schools-are-underfunded-and-turning-to-international-tuition-to-help-127753">create revenue streams</a> through international student tuition and sales of curriculum to international schools. </p>
<p>Ontario’s March 22 proposal for online schooling describes a plan to develop curriculum and offer an education “<a href="https://assets.documentcloud.org/documents/20527907/initiatives-committee-_-expanding-student-access-to-online-and-remote-learning.pdf">with little teacher support</a>.” </p>
<p>This “<a href="https://assets.documentcloud.org/documents/20527907/initiatives-committee-_-expanding-student-access-to-online-and-remote-learning.pdf">business plan</a>” follows Minister of Education Stephen Lecce announcing the appointment of a <a href="https://www.thestar.com/sports/2020/11/17/former-cfl-commissioner-jeffrey-orridge-named-new-chief-executive-officer-of-tvo.html">former CFL commisioner</a> to the role of TVO’s CEO. TVO’s website has been recently retooled to include an emphasis on “digital learning.” </p>
<figure class="align-center ">
<img alt="Students in a band class." src="https://images.theconversation.com/files/393179/original/file-20210401-13-16w34so.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/393179/original/file-20210401-13-16w34so.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/393179/original/file-20210401-13-16w34so.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/393179/original/file-20210401-13-16w34so.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/393179/original/file-20210401-13-16w34so.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/393179/original/file-20210401-13-16w34so.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/393179/original/file-20210401-13-16w34so.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Moving to fully online learning could risk limiting opportunities for extra-curricular learning.</span>
<span class="attribution"><span class="source">(Shutterstock)</span></span>
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</figure>
<h2>Potential future harms</h2>
<p>For children, fully online learning creates the conditions for further educational inequality. It is a <a href="https://link.springer.com/article/10.1007/s00787-020-01706-1">particular risk</a> for children with special education needs. </p>
<p>It can also produce unintended consequences: a <a href="https://doi.org/10.1016/j.worlddev.2020.105225">recent study</a> based in Ecuador showed female students working online were more likely to spend time doing housework than their male counterparts. It is not unimaginable that some families could select online schooling for their children so they could help with household work, care for family members and potentially supplement family income by entering the labour market earlier. The move also risks limiting opportunities for extra-curricular socialization and learning, including experiences with the arts and sports. </p>
<p>Once <a href="https://journalhosting.ucalgary.ca/index.php/cjeap/article/view/31168">poorly researched educational policy</a> comes into practice, it is difficult to undo irrespective of data that details its harms. Such has been the case with the introduction of <a href="https://link.springer.com/article/10.1007/s10833-020-09380-5">standardized testing</a> in Ontario, which marginalizes newcomers and students with exceptionalities, and encourages a narrow curriculum. </p>
<p>Over time, a policy of “choice” for full-time online schooling weakens public education by diluting in-person opportunities for students and eroding funding. An impoverished public system drives families into private schools, which further erodes the public good. Defunding and marketization will leave public education in a race to the bottom.</p><img src="https://counter.theconversation.com/content/158292/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lana Parker receives funding from the Social Sciences and Humanities Research Council. </span></em></p>A policy of “choice” for full-time online schooling would weaken public education, erode funding for in-classroom supports and drive those who can afford it to private education.Lana Parker, Assistant Professor, Faculty of Education, University of WindsorLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1482142020-10-22T12:26:18Z2020-10-22T12:26:18ZMail delays, the election and the future of the US Postal Service: 5 questions answered<figure><img src="https://images.theconversation.com/files/364857/original/file-20201021-23-18fpg0d.jpg?ixlib=rb-1.1.0&rect=89%2C107%2C2905%2C1886&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The USPS is playing a major role in this year's election.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/Election2020CaliforniaBallots/3cb664c559fa4c7287b5132496b4c5b2/photo?Query=postal%20AND%20service&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=1930&currentItemNo=12">AP Photo/Damian Dovarganes</a></span></figcaption></figure><p><em>Editor’s note: The U.S. Postal Service implemented operational changes earlier this year that led to a <a href="https://www.nytimes.com/interactive/2020/09/14/upshot/is-the-mail-getting-slower-tracker.html">sharp increase in delayed mail</a>, raising concerns about the election as <a href="https://apnews.com/article/record-early-votes-2020-transforms-efd6eefbd3d140bdc8909360de0bff62">record numbers of Americans</a> vote by mail this year due to the pandemic.</em></p>
<p><em>The <a href="https://www.axios.com/supreme-court-pennsylvania-mail-in-voting-cd322239-57bb-4bae-aabe-a4116e5bf6d5.html">Supreme Court’s decision</a> on Oct. 19 to allow Pennsylvania to extend the deadline for accepting mail-in ballots was the latest sign of just how important USPS could be to the outcome of the election.</em></p>
<p><em>We asked legal scholars <a href="https://scholar.google.com/citations?user=y_ViJ7oAAAAJ&hl=en&oi=ao">Jena Martin</a> and <a href="https://www.law.wvu.edu/faculty-staff/faculty-information/matthew-titolo">Matthew Titolo</a> to explain why the delays have continued and to discuss their impact on the election and efforts to solve USPS’ long-term fiscal challenges.</em> </p>
<h2>1. Why have there been so many delays?</h2>
<p>The short answer is because of the operational changes made in June by the Trump administration’s <a href="https://www.nytimes.com/article/general-louis-dejoy-postmaster.html">freshly appointed postmaster general</a>, Louis DeJoy.</p>
<p><a href="https://www.nytimes.com/interactive/2020/09/14/upshot/is-the-mail-getting-slower-tracker.html">Within weeks</a> of his arrival, <a href="https://www.cnn.com/2020/08/24/politics/usps-dejoy-misleading-testimony-overtime-fact-check/index.html">DeJoy eliminated overtime</a>, <a href="https://www.forbes.com/sites/andrewsolender/2020/08/19/reports-of-dismantled-usps-sorting-machines-continue-despite-dejoy-announcing-halt/#10acba5626b9">dismantled hundreds of sorting machines</a> and <a href="https://www.washingtonpost.com/context/internal-usps-document-tells-employees-to-leave-mail-at-distribution-centers/175dd1ae-e202-4777-877c-33442338d1cc/?itid=lk_interstitial_manual_14">ordered employees to leave mail behind</a> at distribution centers to ensure they could finish their routes on time.</p>
<p>As a result, the <a href="https://www.businessinsider.com/usps-documents-show-an-8-decline-after-dejoy-joined-2020-8">share of delayed mail</a> surged in late July, according to internal documents. </p>
<p>The long answer, however, has to do with the Postal Service’s <a href="https://www.amny.com/news/new-u-s-postal-service-chief-warns-of-dire-finances-as-quarterly-loss-narrows/">dire financial situation</a>, which is why <a href="https://about.usps.com/newsroom/national-releases/2020/0818-postmaster-general-louis-dejoy-statement.htm">DeJoy said he made the changes</a> – the implementation of which he later <a href="https://federalnewsnetwork.com/agency-oversight/2020/08/usps-postpones-longstanding-operational-initiatives-until-after-election-day/">promised to postpone</a> until after the election.</p>
<p>Despite DeJoy’s pledges, the delays have persisted. About 30% of long-distance mail and 45% of local mail <a href="https://www.nytimes.com/interactive/2020/09/14/upshot/is-the-mail-getting-slower-tracker.html">was delayed</a> by at least a day over the four-week period ending Oct. 12, according to The New York Times, which is tracking millions of pieces of first-class mail originating in four cities. That’s about double what was typical in 2019. </p>
<h2>2. Why is the USPS suffering financially?</h2>
<p>Unlike other federal agencies, the <a href="https://about.usps.com/who-we-are/postal-history/significant-dates.htm">modern Postal Service</a> is <a href="https://facts.usps.com/top-facts/">self-funded</a>, which means it must generate its own revenue stream to use for operations – as opposed to receiving revenue from tax dollars. The more revenue the Postal Service can generate, the more resources it can devote to upgrades, salary increases and other benefits to the agency. </p>
<p>From 1982 – when the government stopped subsidizing USPS – through 2006, <a href="https://about.usps.com/who-we-are/postal-history/pieces-of-mail-since-1789.htm">it earned a profit in all but five years</a>. It began operating at an annual loss in 2007 after <a href="https://www.congress.gov/bill/109th-congress/house-bill/6407">Congress forced it to pre-fund</a> its pension obligations – which required <a href="https://www.politifact.com/factchecks/2020/apr/15/afl-cio/widespread-facebook-post-blames-2006-law-us-postal/">setting aside about $5 billion a year</a> – an onerous obligation that is out of step with how <a href="https://federalnewsnetwork.com/agency-oversight/2020/02/house-passes-smaller-usps-reform-bill-to-eliminate-pre-funding-benefits/">other agencies and businesses</a> fund their pensions. </p>
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<p>This has created an <a href="https://www.nalc.org/news/nalc-updates/body/Misdiagnosis.WHTF.pdf">ongoing budget crisis</a> that has left the agency unable to devote as much money to sorely needed improvements. Nor can it keep up with the strains that have been placed on it since the pandemic began. While the volume of profitable first-class mail <a href="https://www.washingtonpost.com/business/2020/07/14/postal-service-trump-dejoy-delay-mail/">has dropped sharply</a>, the number of packages has soared as Americans have avoided shopping in physical stores and are ordering more stuff online. </p>
<p>Congress <a href="https://federalnewsnetwork.com/agency-oversight/2020/07/usps-treasury-reach-agreement-on-10b-coronavirus-pandemic-relief-loan/">included a $10 billion loan</a> for the Postal Service in its March coronavirus relief bill to help it get through the pandemic. This money should help the USPS <a href="https://federalnewsnetwork.com/agency-oversight/2020/09/dejoy-defends-usps-efforts-to-fix-broken-business-model-following-court-rulings/">operate normally until August 2021</a>. However, disputes between the U.S Treasury and USPS regarding how to spend that money were only <a href="https://home.treasury.gov/news/press-releases/sm1071">recently resolved</a>.</p>
<p>The surge of election-related mail in the past few weeks, especially in <a href="https://www.apmreports.org/story/2020/08/12/postal-delivery-scores-battleground-states-mail-voting">battleground states</a>, has caused even greater mail volume for the agency, leading to <a href="https://www.usnews.com/news/politics/articles/2020-09-24/records-mail-delivery-lags-behind-targets-as-election-nears">missed targets</a> for on-time mail delivery in those areas.</p>
<h2>3. What does this mean for the election?</h2>
<p>Until this year, the Postal Service has managed to do a lot with a little. It’s long been considered the <a href="https://www.pewresearch.org/politics/2020/04/09/public-holds-broadly-favorable-views-of-many-federal-agencies-including-cdc-and-hhs/">most trusted</a> government agency in the U.S. </p>
<p>But the delays – and concerns about how it will manage an unprecedented number of mail-in ballots for the election – are <a href="https://www.wthr.com/article/news/investigations/13-investigates/usps-campaigns-to-win-public-trust-ahead-of-election/531-5f24b714-4449-433f-9af5-69343cd443e2">eroding that trust</a> </p>
<p>The USPS <a href="https://www.forbes.com/sites/alisondurkee/2020/08/25/more-than-20-states-attorneys-general-suing-postal-service-usps-changes-despite-dejoy-reversal/#4a7ecaef4533">now faces lawsuits</a> from over 20 states and such large cities as <a href="https://ag.ny.gov/sites/default/files/doc_1_complaint_usps.pdf">San Francisco and New York</a> over the operational changes, as well as confusing <a href="https://www.cpr.org/2020/09/18/colorado-secretary-of-state-settled-lawsuit-against-postal-service-election-mailers/">election-related flyers</a> the agency sent to voters.</p>
<p>After issuing a nationwide injunction against DeJoy’s restructuring efforts in September, a federal judge <a href="https://abcnews.go.com/Politics/federal-judge-halts-postal-service-citing-voter-disenfranchisement/story?id=73094981">described them as</a> “an intentional effort on the part of the current administration to disrupt and challenge the legitimacy of upcoming local, state and federal elections.”</p>
<p>A second judge <a href="https://www.wfsb.com/news/second-judge-rules-against-usps-says-election-mail-must-be-prioritized/article_0736aca5-e0b3-52d9-8768-7037391ae8b8.html">ordered that election mail</a> be prioritized. </p>
<p>Although in August the <a href="https://apnews.com/article/2ba8699f4094310f44cb2afac958ed1c">USPS warned states</a> that it couldn’t guarantee all ballots would arrive in time for Election Day, DeJoy <a href="https://www.cbs58.com/news/postmaster-general-dejoy-promises-usps-can-handle-election-mail">has since promised</a> the agency will be able to handle the surge in mail.</p>
<h2>4. What does it mean for voters?</h2>
<p>If you’re in a state where <a href="https://www.nytimes.com/interactive/2020/08/11/us/politics/vote-by-mail-us-states.html">mail-in ballots are automatically sent</a> to all voters – such as California and Nevada – there’s a greater risk your ballot will experience delays in the mail. </p>
<p>In addition, <a href="https://www.ncsl.org/research/elections-and-campaigns/vopp-table-11-receipt-and-postmark-deadlines-for-absentee-ballots.aspx">most states require mail-in ballots</a> to arrive by Election Day. Pennsylvania voters got a little relief after the <a href="https://www.nytimes.com/2020/10/19/us/supreme-court-pennsylvania-voting.html">Supreme Court on Oct. 19 left in place</a> a ruling that lets the state count them even if they arrive up to three days late – as long as they are postmarked by Nov. 3. </p>
<p>Nonetheless, concerns about mail delays have prompted both <a href="https://www.nytimes.com/2020/10/01/us/politics/democrats-in-person-voting.html">Democrats</a> and <a href="https://www.news4jax.com/news/local/2020/10/19/local-republicans-urge-early-in-person-voting/">Republicans</a> to urge their supporters to vote in person if possible to minimize the possibility of discarded ballots that favor their candidate. </p>
<p>If you still want to vote by mail, <a href="https://www.journal-news.net/journal-news/election-officials-urge-public-to-request-absentee-ballots-early/article_2fe77385-521f-5a69-96a3-cb7630d70e1c.html">officials suggest</a> you request a ballot as soon as possible – <a href="https://time.com/5889969/how-to-vote-by-mail/">deadlines vary</a> by state. In most states, <a href="https://www.cnet.com/how-to/voting-by-mail-heres-how-to-track-your-election-ballot-like-a-fedex-package-in-every-state/">you can track</a> your ballot to make sure it’s arrived safely. </p>
<h2>5. What will happen to the USPS after the election?</h2>
<p>DeJoy made the changes as part of what <a href="https://about.usps.com/newsroom/national-releases/2020/0818-postmaster-general-louis-dejoy-statement.htm">he described as a necessary and long-overdue overhaul</a> of the agency to stop the financial bleeding. Some <a href="https://www.washingtonpost.com/politics/2020/08/13/power-up-postal-workers-democrats-worry-usps-overhaul-sets-stage-privatization/">Democrats</a>, <a href="https://theintercept.com/2020/07/29/usps-postal-service-privatization/">postal employees</a> and others have accused him of laying the groundwork for <a href="https://home.treasury.gov/system/files/136/USPS_A_Sustainable_Path_Forward_report_12-04-2018.pdf">privatizing the USPS</a>.</p>
<p><a href="https://www.govexec.com/management/2012/07/case-privatizing-postal-service/57003/">Talk</a> of <a href="https://i2i.org/wp-content/uploads/2011/06/4-2001.pdf">privatization</a> is <a href="https://www.forbes.com/sites/johntamny/2014/01/05/the-right-and-left-are-wrong-about-the-u-s-post-office-lets-not-privatize-it/#508f32a86e78">hardly new</a>. Critics of the USPS as a public agency argue that turning the agency into a private entity would increase the organization’s efficiency. </p>
<p>But the problem is this ignores the essential – and less profitable – public utility services the USPS provides. <a href="https://ssrn.com/abstract=3716504">Our own review</a> of the ramifications of privatization found that many essential services that are not profitable but enhance the public good would be lost if the Postal Service became a for-profit corporation.</p>
<p>For instance, unlike FedEx or UPS, the Postal Service has a <a href="https://www.uspsoig.gov/sites/default/files/document-library-files/2015/rarc-wp-15-001_0.pdf">universal service obligation</a>. That means it is required to deliver mail and provide services to every person living in the United States, including in rural communities, even if doing so isn’t profitable. FedEx and UPS have no such requirement. </p>
<p>In fact, both FedEx and UPS <a href="https://theconversation.com/voters-arent-the-only-ones-who-dread-slow-mail-struggling-small-businesses-are-also-at-risk-from-postal-service-delays-139551">use the Postal Service’s last-mile service</a> to deliver their packages to rural customers precisely because it is not profitable for them to do so.</p>
<p>In addition, although few realize it, the Postal Service provides many benefits to the public beyond mere mail delivery, such as passport services and a program that aims to check in on elderly customers. </p>
<p>As for the USPS’ impact on American elections, if it were privatized, politicians would likely lose a key way they reach voters because their <a href="https://www.uspsoig.gov/election-and-political-mail">campaign flyers</a> and other political mail are <a href="https://pe.usps.com/cpim/ftp/pubs/pub417/pub417.pdf">currently subsidized</a> at <a href="https://pe.usps.com/businessmail101?ViewName=NonprofitPrices">reduced nonprofit rates</a>. A privatized USPS would likely significantly <a href="https://www.nytimes.com/2020/08/11/us/politics/post-office-mail-in-voting.html">raise those rates</a>, which only more established candidates may be able to afford.</p><img src="https://counter.theconversation.com/content/148214/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Two legal scholars explain what’s causing the USPS mail delays, what they mean for the election and the agency’s deeper financial problems.Jena Martin, Professor of Law, West Virginia UniversityMatthew Titolo, Professor of Law, West Virginia UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1452372020-09-10T15:57:00Z2020-09-10T15:57:00Z‘Pandemic pods’ may undermine promises of public education<figure><img src="https://images.theconversation.com/files/357208/original/file-20200909-20-2wcejz.JPG?ixlib=rb-1.1.0&rect=5%2C86%2C3589%2C2295&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Signs direct the flow of student traffic at Kensington Community School amid the COVID-19 pandemic on Sept. 1, 2020. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Carlos Osorio</span></span></figcaption></figure><p>With schools reopening after COVID-19 closures, concerns about the <a href="https://www.theglobeandmail.com/canada/article-as-back-to-school-anxiety-mounts-canadian-parents-turn-to-private">safety and certainty of public schooling</a> have driven some parents to consider alternatives to sending kids back to brick-and-mortar classrooms. </p>
<p>One option <a href="https://www.theglobeandmail.com/canada/article-how-race-income-and-opportunity-hoarding-will-shape-canadas-back/">making headlines is the formation of “learning pods” also known as “pandemic pods.”</a> Pandemic pods are small groups of children from different families who learn together outside of traditional school buildings. </p>
<p>While pandemic pods may seem relatively harmless, they are part of a growing trend towards education privatization that <a href="http://dx.doi.org/10.1080/19460171.2012.717782">undermines public education and democracy</a>. The advent of pandemic pods has been <a href="https://www.facebook.com/groups/pandemicpodsf/">facilitated by micro-communities of organized parents</a> operating in communities across Canada — where public education has been <a href="http://www.jstor.org/stable/4151599">privatizing for decades</a>. </p>
<p>In fact, the <a href="https://epaa.asu.edu/ojs/article/view/2685">number of families choosing private schools or homeschooling has increased</a> and public schools’ <a href="https://journalhosting.ucalgary.ca/index.php/cjeap/article/view/42900">reliance on private funds has become normalized</a>. Among other concerns, these shifts point to some parents’ diminishing confidence in governments. </p>
<h2>Private interests first</h2>
<p>Some pods involve parents providing instruction to their own and others’ children; this is simply a version of homeschooling. In other models, multiple families hire a teacher to deliver the curriculum, or parents pay a for-profit business to provide instruction and space for learning. These arrangements are akin to private schooling. </p>
<p>Another type of pod is one in which families hire someone to help kids as they complete remote instruction provided by a public school board. This model is similar to traditional tutoring to support in-school instruction.</p>
<p>With all of these approaches, either parents or those they delegate to represent their interests <a href="https://doi.org/10.1080/02680939.2017.1318453">participate in the privatization of education</a> by taking on roles that have traditionally been the responsibility of governments.</p>
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<h2>Privatization in education</h2>
<p>Privatization of public education is multifaceted. Unlike in other sectors where governments have sold public assets to private owners, privatization in publicly funded education can mean <a href="http://epaa.asu.edu/ojs/article/view/2679">adopting practices common in the private sector</a>. </p>
<p>Introducing policies to create markets in education is one example. In this arrangement, <a href="https://doi.org/10.1177/0895904819881155">schools compete for students as parents, the markets’ consumers, choose between a variety of schooling “options.”</a> Choices may include a highly ranked neighbourhood school, private, alternative or charter schools, and specialized arts, athletic or academic programs like French immersion and the International Baccalaureate. </p>
<p>While market approaches in education have gained traction in western societies over the past few decades, <a href="https://epaa.asu.edu/ojs/article/view/2601">they have failed to deliver on the promise that they would improve educational outcomes for all students</a>, especially the most disadvantaged. </p>
<p>Education privatization can also mean increasing the involvement of the private sector in the delivery, <a href="https://doi.org/10.1080/02680939.2015.1065345">funding</a> or <a href="https://doi.org/10.1080/01596306.2015.1130026">governance</a> of public schooling. </p>
<p>Sometimes privatization in education involves creating opportunities for businesses to profit from public education. The involvement of educational technology companies in delivering e-learning is one such example. But the private sector also includes civil society organizations and private citizens, including parents. </p>
<p>Education policies and practices that enable advantaged parents to secure benefits for their own children include fundraising, school fees, international education, public funding of private schools — and pandemic pods. </p>
<h2>Private benefits</h2>
<p>Researchers who examine the effects of various education privatization policies typically find that they undermine hallmarks of public education. For example,
policies that enable school choice — such as charter schools, public funding of private schools, open enrolment and specialized programs — undermine the promise of equal access to education. </p>
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Read more:
<a href="https://theconversation.com/charter-schools-what-you-need-to-know-about-their-anticipated-growth-in-alberta-141434">Charter schools: What you need to know about their anticipated growth in Alberta</a>
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<p>Research shows that <a href="https://doi.org/10.1177/0895904819886323">not all students and families can participate in school choice</a>. A study in Vancouver, for example, shows that parents’ ability to choose schools depends on their <a href="http://epaa.asu.edu/ojs/article/view/2655">income and, relatedly, where they live</a>. A study in Toronto found that <a href="http://epaa.asu.edu/ojs/article/view/2716">white, affluent students are over-represented in specialized arts programs and secondary schools</a>, while researchers found that Vancouver’s <a href="https://doi.org/10.1177/0895904819864442">Indigenous students are less likely to attend specialized secondary school programs than their non-Indigenous peers</a>. </p>
<p>Public education is supposed to privilege collective benefits of education over private ones. Policies that position families and students as consumers and enable them to select and pay for better resources and opportunities in public schools turn this commitment on its head: <a href="http://www.jceps.com/?pageID=article&articleID=57">public education is constructed primarily as a private — rather than a collective — good</a>. </p>
<h2>Crisis and change</h2>
<p>While we don’t yet know if the pods will outlast the pandemic, crises are known to facilitate education privatization. Researchers Antoni Verger, Clara Fontdevilla and Adrián Zancajo at the Universitat Autònoma de Barcelona <a href="https://www.tcpress.com/the-privatization-of-education-9780807757598">explain that this happens because crises provide opportunities to test new ideas</a>. Also, they note that the sense of urgency experienced following a catastrophe means that transparent and democratic debates are less likely to happen; consequently, controversial policies are introduced more easily. And changes implemented immediately following crises may endure.</p>
<p>The expansion of charter schools in New Orleans following Hurricane Katrina is a case in point. The urgent need to reopen schools meant <a href="https://doi.org/10.1080/02680939.2017.1318453">city residents were willing to accept policies they’d previously resisted</a>. Local school districts <a href="https://doi.org/10.1080/00220620.2019.1685474">invited philanthropists and foundations to rebuild schools in the city and operate them as charter schools</a>. Charter schools are typically governed <a href="https://www.thecanadianencyclopedia.ca/en/article/charter-schools#:%7E:text=Charter%20schools%20are%20funded%20by,that%20govern%20other%20public%20schools.">by a corporate body (a charter board)</a> rather than a democratically elected school board. </p>
<p><a href="https://doi.org/10.1111/j.1468-2427.2011.01062.x">Charter school opponents in New Orleans found it hard to organize</a> to contest the reforms since many of them had been displaced by the storm. Today, <a href="https://doi.org/10.1177/0275074020942257">every publicly funded school in New Orleans is a charter school</a>.</p>
<p>Alberta’s <a href="https://globalnews.ca/news/7000587/alberta-government-ucp-charter-schools-home-schooling-education-may/">Premier Jason Kenney introduced legislation to increase the number of charter schools in the province in May</a>, after schools closed due to the pandemic. </p>
<figure class="align-center ">
<img alt="A teacher leads a pre-kindergarten class." src="https://images.theconversation.com/files/357215/original/file-20200909-16-11m4h7u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/357215/original/file-20200909-16-11m4h7u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/357215/original/file-20200909-16-11m4h7u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/357215/original/file-20200909-16-11m4h7u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/357215/original/file-20200909-16-11m4h7u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/357215/original/file-20200909-16-11m4h7u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/357215/original/file-20200909-16-11m4h7u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Michelle Garnett teaches a pre-kindergarten class at Alice M. Harte Charter School in New Orleans in December 2018.</span>
<span class="attribution"><span class="source">(AP Photo/Gerald Herbert)</span></span>
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<h2>Reproducing social inequalities</h2>
<p>School choice and many other education privatization policies call on parents to <a href="https://doi.org/10.1177/0895904818807331">assume a greater responsibility</a> for their children’s schooling and success. The turn to pandemic pods and <a href="https://www.theglobeandmail.com/canada/article-pandemic-focused-school-fundraising-goals-threaten-to-widen/">fundraising for personal protective equipment and other COVID-related safety items</a> suggest some parents are now accepting responsibility for ensuring their kids’ learning environments are safe.</p>
<p>The shift towards private funding of education reduces the responsibility of governments to <a href="https://doi.org/10.1080/02680939.2013.820354">adequately fund schools</a> and to ensure all children have access to high-quality education programming. </p>
<p>Education privatization undermines democratic commitments to equity, equality and inclusion by creating and reproducing <a href="https://doi.org/10.1080/00220620.2019.1689234">social inequalities</a>.</p><img src="https://counter.theconversation.com/content/145237/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sue Winton receives funding from Canada's Social Sciences and Humanities Research Council.</span></em></p>The turn to private funding of education reduces the responsibility of governments to adequately fund schools and to ensure all children have access to high-quality education programming.Sue Winton, Associate Professor, Faculty of Education, York University, CanadaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1444432020-08-25T15:56:12Z2020-08-25T15:56:12ZUnhealthy reforms: The dangers of Alberta’s plan to further privatize health-care delivery<figure><img src="https://images.theconversation.com/files/354138/original/file-20200821-16-rf2jrf.jpg?ixlib=rb-1.1.0&rect=41%2C8%2C2556%2C1881&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Alberta Minister of Health Tyler Shandro speaks during a press conference in Calgary on May 29, 2020. The Alberta government is proposing legislation to accelerate approvals of private clinics in order to get more surgeries done.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Jeff McIntosh</span></span></figcaption></figure><p>The Alberta government recently passed <a href="https://docs.assembly.ab.ca/LADDAR_files/docs/bills/bill/legislature_30/session_2/20200225_bill-030.pdf">legislation</a> to increase the role of corporations in the health-care system and facilitate the government’s goal of having <a href="https://www.theglobeandmail.com/canada/alberta/article-alberta-to-use-rural-hospital-private-clinics-for-minor-surgeries/">30 per cent of the province’s surgeries performed in private facilities</a>. </p>
<p>These changes risk undermining the public health-care system, increasing costs and decreasing quality. <a href="https://edmontonjournal.com/news/politics/proposed-200-million-private-health-facility-a-huge-concern-critics-say">Media reports</a> about a proposed private surgical facility suggest that the government may be putting profits over the public good in implementing the reforms.</p>
<h2>Corporatization of health delivery</h2>
<p>The legislative changes allow corporations to make financial arrangements with the government to provide health services, and to contract with physicians to deliver those services. </p>
<p>This is a departure from the current system in which only physicians (either directly or through their professional corporations) could bill the government for providing health services. Unlike physicians, who must place the interests of their patients above their own personal and financial interests, corporations owe financial obligations to their shareholders that may conflict with the interests of patients.</p>
<h2>Privatization of health delivery</h2>
<figure class="align-center ">
<img alt="Close-up of a male surgeon's face looking down, wearing a surgical mask and cap, glasses and a forehead-mounted light." src="https://images.theconversation.com/files/354136/original/file-20200821-18-1of5rrs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/354136/original/file-20200821-18-1of5rrs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=391&fit=crop&dpr=1 600w, https://images.theconversation.com/files/354136/original/file-20200821-18-1of5rrs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=391&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/354136/original/file-20200821-18-1of5rrs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=391&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/354136/original/file-20200821-18-1of5rrs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=491&fit=crop&dpr=1 754w, https://images.theconversation.com/files/354136/original/file-20200821-18-1of5rrs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=491&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/354136/original/file-20200821-18-1of5rrs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=491&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">With the expansion of private delivery, a larger variety of surgical procedures will be performed in private clinics.</span>
<span class="attribution"><span class="source">(Unsplash/National Cancer Institute)</span></span>
</figcaption>
</figure>
<p>The new legislation also facilitates the private delivery of publicly funded surgeries. Although some services are already <a href="https://www.albertahealthservices.ca/about/Page3172.aspx">delivered privately</a> (most commonly cataract surgery), many more surgeries and a <a href="https://www.cbc.ca/news/canada/edmonton/mastectomies-hernias-possibilities-for-private-surgical-delivery-1.5448131">larger variety of procedures</a> will now be performed in private, for-profit, facilities. </p>
<p>For-profit delivery <a href="https://www.policyalternatives.ca/sites/default/files/uploads/publications/BC%20Office/2016/04/CCPA-BC-Reducing-Surgical-Wait-Times.pdf">tends to cost more</a> than non-profit delivery, given the need to deliver returns to investors. In a <a href="https://s3-us-west-2.amazonaws.com/parkland-research-pdfs/deliverymatters2.pdf">previous experiment with privatization</a>, surgeries cost more in the private facility than in the public system, and Albertan taxpayers bailed out the facility when it ran into financial difficulties. Evidence also suggests that <a href="https://www.cmaj.ca/content/166/11/1399?ijkey=7977d3b90df49620fcd42cd7a14f9c8895cd1139&keytype2=tf_ipsecsha">for-profit facilities tend to deliver lower quality care</a> than non-profit facilities.</p>
<p>The government’s stated rationale for increased private delivery is to reduce wait times. This claim <a href="https://www.longwoods.com/content/26228//commentary-the-consequences-of-private-involvement-in-healthcare-the-australian-experience">runs contrary to evidence</a> that indicates that reallocating finite health professional hours to the private system increases wait times in the public system. </p>
<p>Because private facilities generally <a href="https://doi.org/10.1002/hpm.2502">prefer healthier patients with less complex medical needs</a>, those with more complex needs will be left waiting longer for care in public hospitals. Recruiting additional staff to address these issues would be difficult, given the government’s <a href="https://www.cbc.ca/news/canada/calgary/alberta-kenney-doctors-government-1.5653948">strained relationship</a> with physicians. </p>
<h2>Centralization of government control</h2>
<p>Perhaps in a bid to minimize opposition to its controversial reforms, the government is also <a href="https://healthydebate.ca/opinions/alberta-key-health-institutions">asserting control over key health institutions</a>. For example, the new legislation shrinks the responsibilities of Alberta Health Services (AHS), the entity responsible for contracting with private providers, and allows the government to impose an accountability framework on AHS.</p>
<figure class="align-center ">
<img alt="View of Alberta legislature from above, in winter." src="https://images.theconversation.com/files/354139/original/file-20200821-20-ejt11a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/354139/original/file-20200821-20-ejt11a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=418&fit=crop&dpr=1 600w, https://images.theconversation.com/files/354139/original/file-20200821-20-ejt11a.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=418&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/354139/original/file-20200821-20-ejt11a.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=418&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/354139/original/file-20200821-20-ejt11a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=525&fit=crop&dpr=1 754w, https://images.theconversation.com/files/354139/original/file-20200821-20-ejt11a.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=525&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/354139/original/file-20200821-20-ejt11a.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=525&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">View of the Alberta Legislature in Edmonton on March 28, 2014. A recent proposal by the Alberta government could increase its control over institutions that regulate health professionals.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Jason Franson</span></span>
</figcaption>
</figure>
<p>The government recently <a href="https://www.albertadoctors.org/services/media-publications/presidents-letter/pl-archive/possible-changes-hpa-self-regulation-concerns">circulated a proposal</a> that could increase its control over the key functions of institutions that regulate health professionals. Because one of these institutions, the College of Physicians and Surgeons, is responsible for accrediting and setting standards for private surgical facilities, the proposal could be a way of influencing that process. </p>
<p>The government has also <a href="https://www.longwoods.com/content/26298//proposed-legislation-erodes-independence-and-expertise-of-alberta-s-healthcare-institutions">increased the number of public members on self-regulatory bodies</a>. Given the government’s influence on the appointment process, this may also be a means of increasing its control over these bodies.</p>
<h2>Implementing private delivery</h2>
<p>Details have emerged about <a href="https://www.cbc.ca/news/canada/edmonton/private-orthopedic-surgical-alberta-health-1.5678883">discussions between Ministry of Health officials and a group of surgeons, developers and lobbyists</a> regarding a proposed $200-million facility that would perform most orthopedic surgeries in the Edmonton region. These discussions illustrate how private delivery can prioritize profits over the public interest. </p>
<p>This facility is likely to benefit from public subsidies. For example, if procedures performed in private facilities result in serious complications, or if patients require readmission to hospital, public hospitals will likely be responsible for treating these patients. </p>
<p>In addition, acquiring land and constructing the facility will require public investment, whether by way of direct funds, tax credits or by allowing the facility to recoup its costs through service contracts negotiated with the government. Furthermore, the investors are reportedly insisting on contractual terms that will make their contract with the government <a href="https://www.cbc.ca/news/canada/edmonton/experts-raise-alarm-about-proposed-largest-private-surgical-facility-in-alberta-history-1.5679074">expensive to cancel and binding on future governments</a>, placing financial risks on taxpayers. </p>
<p>There are also transparency problems with the project. Lobbyists had access to high-level government officials, raising concerns that lobbying efforts rather than public interest will influence who receives private contracts, the terms of those contracts and how these facilities will be regulated. </p>
<p>The opposition party has <a href="https://www.cbc.ca/news/canada/edmonton/alberta-auditor-general-review-requested-in-private-orthopedic-surgical-facility-1.5683305">asked the auditor general to investigate</a>, alleging political interference in the procurement process. AHS was <a href="https://www.cbc.ca/news/canada/edmonton/experts-raise-alarm-about-proposed-largest-private-surgical-facility-in-alberta-history-1.5679074">excluded from the discussions</a> and will reportedly be pressured to accept the initiative. </p>
<p>Recent reforms embracing the corporatization and privatization of health services undermine the public health-care system and risk prioritizing profits over patients and taxpayers. However, challenges to public health care are not limited to Alberta. </p>
<p>For example, <a href="https://www.huffingtonpost.ca/colleen-m-flood/public-vs-private-healthcare-canada_b_7136996.html">ongoing litigation in British Columbia</a> threatens laws limiting private finance, and Saskatchewan has been engaged in a lengthy <a href="https://www.cbc.ca/news/canada/saskatchewan/sask-mri-federal-money-1.5483849">dispute with the federal government over private MRIs</a>. </p>
<p>These privatization efforts threaten the basic tenet of the Canadian health-care system: access based on need rather than ability to pay.</p><img src="https://counter.theconversation.com/content/144443/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Recent Alberta legislation increasing privatization in the health sector risks undermining the public health-care system, and will likely put profits over the public interest.Lorian Hardcastle, Associate Professor, Faculty of Law and Cumming School of Medicine; Member, AMR One Health Consortium, University of CalgaryUbaka Ogbogu, Associate Professor, Faculty of Law and Faculty of Pharmacy and Pharmaceutical Sciences, University of AlbertaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1167742019-09-26T11:21:57Z2019-09-26T11:21:57ZWhy are private prisons controversial? 3 questions answered<figure><img src="https://images.theconversation.com/files/284606/original/file-20190717-147295-1pzh4g8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The US is one of a few countries that still uses private prisons.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Prison-Riot-Oklahoma/5bb67fee15964b86b520de518ff5acd2/67/0">AP Photo/Sue Ogrocki</a></span></figcaption></figure><p><em>Editor’s note: <a href="https://www.motherjones.com/politics/2016/06/history-of-americas-private-prison-industry-timeline/">Private prisons</a> have <a href="https://civilrights.findlaw.com/other-constitutional-rights/private-jails-in-the-united-states.html">long stirred controversy</a>, most recently <a href="https://www.npr.org/2017/11/21/565318778/big-money-as-private-immigrant-jails-boom">over their role</a> in housing undocumented immigrants and asylum seekers at the U.S.-Mexico border. <a href="https://www.axios.com/the-states-where-private-prisons-are-thriving-1513306984-8e4d9dc6-8bd2-4ea8-93dc-47a187977bca.html">Several states have banned them</a>, several banks <a href="https://www.reuters.com/article/us-suntrust-banks-prison-idUSKCN1U31WV">have vowed to stop financing</a> them and more than one <a href="https://www.phillytrib.com/news/elections/kamala-harris-seeks-end-to-executions-cash-bail-private-prisons/article_278ffd9a-3d18-5bb2-86db-cd69728c21e5.html">presidential candidate has pledged</a> to <a href="https://thehill.com/homenews/campaign/449834-private-prisons-stocks-drop-on-warren-pledge">end them at the federal level</a>.</em></p>
<p><em><a href="http://www.johneason.com/about/">John M. Eason</a>, associate professor of sociology at the University of Wisconsin-Madison, has done extensive research on private prisons. We asked him to provide some background on why they’re so controversial.</em></p>
<h2>1. What are private prisons?</h2>
<p>Private prisons are <a href="https://www.hamiltonproject.org/papers/the_economics_of_private_prisons">run or owned by corporations</a> holding contracts with federal or state governments to house citizens convicted of a crime or immigrant detainees being processed for deportation.</p>
<p>The U.S. is <a href="https://www.brennancenter.org/inside-private-prisons-american-dilemma-age-mass-incarceration">one of only a handful of countries</a> in the developed world that allow private entities to own prisons. Critics of private prisons point out that profit motives, coupled with a lack of oversight, can create incentives to <a href="https://publicpolicy.wharton.upenn.edu/live/news/1736-the-current-state-of-public-and-private-prison/for-students/blog/news.php">minimize costs and care for inmates</a>.</p>
<p>In 2016, roughly 8% – or <a href="https://www.bjs.gov/content/pub/pdf/p16.pdf">128,000 of 1.5 million U.S. prisoners</a> – were held in private facilities. While only <a href="http://www.johneason.com/prison-proliferation/">13.5% of the 1,663 U.S. prisons are private</a>, more than 55% of the 206 immigrant detention centers are.</p>
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<p>From <a href="https://www.motherjones.com/politics/2012/06/prison-profit-industry-corporation-money-jail/">2000 to 2009</a> in the number of inmates in private prisons <a href="https://www.motherjones.com/politics/2012/06/prison-profit-industry-corporation-money-jail/">increased significantly</a>, but <a href="https://www.pewresearch.org/fact-tank/2017/04/11/u-s-private-prison-population-has-declined-in-recent-years/">the trend has leveled out</a>. Overall, the rate of prison building has <a href="http://www.johneason.com/prison-proliferation/">decreased significantly since 2000</a> and nearly <a href="https://www.worldcat.org/title/after-prisons-freedom-decarceration-and-justice-disinvestment/oclc/950445628">100 facilities have closed nationwide</a>.</p>
<p>Some populous states like Connecticut, Michigan and Mississippi <a href="https://www.sentencingproject.org/publications/decarceration-strategies-5-states-achieved-substantial-prison-population-reductions/">have slowed their rate of imprisonment</a> but many southern states, such as Texas, Florida and Georgia are lagging behind.</p>
<p><a href="http://www.johneason.com/prison-proliferation/">My recent research</a> suggests that the number of prisoners has stagnated because we are not constructing new prisons. In the past, <a href="http://www.johneason.com/prison-proliferation/">rising rates of incarceration was an outgrowth</a> of the prison building boom.</p>
<p>Some states like New York have begun to try and <a href="https://www.forbes.com/sites/morgansimon/2019/06/24/new-york-adjourns-historic-legislative-session-heres-what-remains-on-prisons-marijuana-more/#5988ddf31605">starve private prisons of funding</a>.</p>
<h2>2. Where are they built?</h2>
<p>The U.S. began building private prison in 1983. From 1995 to 2000, nearly one in four U.S. prisons opened were private. Texas, Florida and Georgia together built 336 facilities or 20% of all U.S. prisons.</p>
<p>New Mexico houses almost half of its prisoners in private facilities. Texas has the largest population of private prisoners.</p>
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<p>Southern communities were <a href="https://www.sciencedirect.com/science/article/abs/pii/S0049089X10000141">three times more likely to build a prison</a> during the height of the boom than any other. Prisons are most often built in poor communities of color.</p>
<p>Overall, the rate of prison building has <a href="http://www.johneason.com/prison-proliferation/">decreased since 2000</a>. The trend in new private prison building coincided with <a href="https://rowman.com/ISBN/9781498539159/After-Prisons-Freedom-Decarceration-and-Justice-Disinvestment">nearly 100 public facilities closing nationwide</a>.</p>
<h2>3. Why are they controversial?</h2>
<p>Those who argue for privatization say that it delivers services at lower costs, but <a href="https://www.brennancenter.org/inside-private-prisons-american-dilemma-age-mass-incarceration">studies show</a> that gains in efficiency often comes with unintended consequences.</p>
<p>For example, less accountability in private prisons leads to more abuse of inmates. Food services have delivered <a href="https://www.metrotimes.com/table-and-bar/archives/2017/11/08/more-maggots-and-mold-found-in-michigans-prison-food">food laced with maggots</a>. Prison food service, now dominated by private vendors, has been labeled by critics “<a href="https://www.theatlantic.com/health/archive/2017/12/prison-food-sickness-america/549179/">a hidden public-health crisis</a>.”</p>
<p>Many anti-privatization advocates believe that private operators are <a href="https://www.axios.com/profiting-prison-c2bd43b2-4b2f-44ee-8f23-c6c9a14c1aaa.html">rife with exploitation</a>. Almost all private prisons are <a href="https://www.hamiltonproject.org/papers/the_economics_of_private_prisons">operated by five companies</a> and CoreCivic – formerly Corrections Corporation of America – controls more than half the market with 53% of all facilities.</p>
<p>Private prisons have surfaced as an <a href="https://www.eastbaytimes.com/2019/09/09/kamala-harris-end-death-penalty-remove-mandatory-minimum-sentences-close-private-prisons/">issue in</a> the <a href="https://slate.com/business/2019/06/elizabeth-warren-private-prisons-stocks.html">2020 presidential election</a>, the country may soon see further reform of private U.S. prisons.</p>
<p><em>Editors Note: This piece has been updated to correct the number of prisoners in federal prisons, the name of a company, New York state’s tactics to close prisons and data references.</em></p><img src="https://counter.theconversation.com/content/116774/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John M. Eason does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Private prisons have long been a topic of controversy in the U.S. A professor of sociology explains what they are and why they matter.John M. Eason, Associate Professor of Sociology, University of Wisconsin-MadisonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1131082019-03-14T10:38:02Z2019-03-14T10:38:02ZWho are the private contractors fighting in Iraq and Afghanistan? An inside look at this invisible military force<p>The debate on privatizing the war in Afghanistan is heating up yet again, with Democratic lawmakers pledging to end so-called “<a href="https://taskandpurpose.com/dem-lawmakers-forever-war">forever wars</a>.” The public is slowly recognizing the war’s <a href="https://www.thebureauinvestigates.com/stories/2019-01-29/death-disappearance-inside-world-of-privatised-war">hidden costs</a> and <a href="https://www.bloomberg.com/news/articles/2019-02-10/blackwater-mercenary-prince-has-a-new-1-trillion-chinese-boss">global scale</a>. </p>
<p>In 2016, 1 in 4 U.S. armed personnel in Iraq and Afghanistan <a href="https://taskandpurpose.com/heres-many-us-troops-private-contractors-sent-afghanistan">was a private contractor</a>. This means that the war is already being outsourced, yet scholars, the media and the general public know almost nothing about it. </p>
<p>Because contractors operate in the shadows, without effective public oversight, they allow policymakers to have their cake and eat it too – by appearing to withdraw, while keeping proxy forces in theater. Who are the contractors who actually execute American policy? Are they equipped to succeed in this important task? What risks is the U.S. asking them to take?</p>
<p>The simple truth is that there is little reliable data about this industry. Without this data, scholars cannot ask even the most basic questions of whether using contractors works better than the alternative, namely military personal or local forces – or, indeed, whether it works at all. </p>
<p>We are researchers who study the privatization of security and its implications. <a href="https://doi.org/10.1177/0095327X18811375">In our study</a>, published on Dec. 5 in Armed Forces & Society, we shed light on some of the aspects of this largely invisible workforce for the first time.</p>
<h2>Gaps in the data</h2>
<p>It’s hard to get data about private military contractors, mainly because of the proprietary business secrets. Despite the fact that those companies act as proxies of the state, they are not legally obligated to share information with the public on their actions, organization or labor force. </p>
<p>Given how centrally private military companies feature in American foreign <a href="https://www.washingtonpost.com/news/monkey-cage/wp/2018/09/11/privatizing-the-u-s-effort-in-afghanistan-seemed-a-bad-idea-now-its-even-worse/">policy debates lately</a>, Americans may assume that their policymakers are working from a detailed understanding of the contractor workforce. After all, the point is to weigh the contractors’ merits against uniformed service members, about whom the public have <a href="https://www.dmdc.osd.mil/appj/dwp/data_reqs.jsp">excellent information</a>. </p>
<p>But this does not appear to be the case. There isn’t a detailed account of the private military industry’s practices, workforce, misconducts or contracts. Noticing this gap, in 2008, Congress instructed the Department of Defense <a href="https://www.congress.gov/110/plaws/publ181/PLAW-110publ181.pdf">to start collecting data</a> on private security personnel. </p>
<p>However, this data is limited, as <a href="https://fas.org/sgp/crs/natsec/R40764.pdf">security contractors</a> comprise just 10 to 20 percent of DOD contractors in Afghanistan and Iraq. The rest provide mission essential functions, such as engineering, communication and transportation and many others. Those roles take place in conflict areas and place those contractors at similar risk level as the soldiers. </p>
<p>Since it is impossible to say anything directly about the total population of American and British contractors who have served in Iraq, we sought out a sample for which records do exist – namely, those who died and whose deaths were recorded in obituaries. They are the corporate war dead. They are not a representative sample, since some occupations and some personalities are more likely to <a href="https://www.nytimes.com/2017/02/04/us/navy-seal-william-ryan-owens-dead-yemen.html">risk death</a> in combat than others, but in a setting without any reliable information they offer us a glimpse to this industry’s workforce.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/262747/original/file-20190307-82669-i1ws8g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/262747/original/file-20190307-82669-i1ws8g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/262747/original/file-20190307-82669-i1ws8g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=424&fit=crop&dpr=1 600w, https://images.theconversation.com/files/262747/original/file-20190307-82669-i1ws8g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=424&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/262747/original/file-20190307-82669-i1ws8g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=424&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/262747/original/file-20190307-82669-i1ws8g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=533&fit=crop&dpr=1 754w, https://images.theconversation.com/files/262747/original/file-20190307-82669-i1ws8g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=533&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/262747/original/file-20190307-82669-i1ws8g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=533&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Two U.S. private security contractors investigate the site where a military armored bus was damaged by a roadside bomb on the highway near Baghdad International Airport in Baghdad, Iraq in 2004.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/IRAQ-BLACKWATER/dd3f18835309424cbd07f2dcaa2414c8/5/0">AP Photo/Hadi Mizban</a></span>
</figcaption>
</figure>
<h2>Basic demographics</h2>
<p>We collected open source data from <a href="http://icasualties.org/">iCasualties</a>, a site that collects basic data on soldiers and contractors casualties. Using this data we gathered demographic information from obituaries and news articles, on 238 contractors who perished in Iraq between 2006 and 2016. </p>
<p>We learned that the contractors in our sample are predominantly white man in their 40s who choose contracting as a second career. Most are veterans with significant military experience. </p>
<p><iframe id="MCPVS" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/MCPVS/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Among those contractors who were previously deployed as service members, many are former officers and about half of them are Special Forces veterans. They are more likely to have a college degree than their active duty counterparts, but less likely than their fellow veterans in the general population.</p>
<p>They come from parts of the U.S. or United Kingdom with higher unemployment rates and fewer job opportunities – not the areas with the strongest traditions for military service. </p>
<h2>How contractors died</h2>
<p>What was it like to be a contractor in Iraq? From our sample of the corporate war dead, most of their deployments were short, between a week to a month. Many contractors treated it as a temporary job, taking a few tours. </p>
<p>Most of those in our sample worked in security, an especially dangerous job. Indeed, these contractors were more likely to be killed by enemy action than the American service members they worked alongside.</p>
<p><iframe id="sdzpz" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/sdzpz/3/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Of course, all of the members of our sample died. Contractors faced mortal peril in different places than service members. Many more of them died in Baghdad or on the roads than did at work or on a base. </p>
<p>This makes sense, considering that contractors that often lacked a protective umbrella of support from other units. If encountering unexpected threats, their support was less organized and effective. They were also routinely tasked with different types of missions: less combat work, and more logistics, maintenance or security type work. These types of missions – for example, driving the supply trucks to and from a base – are less protected and have routines that can be detected by insurgents.</p>
<h2>Enriching the debate</h2>
<p>To make informed decisions about whether and how to privatize future military commitments, the public needs at least a general understanding of the people tasked with projecting American force abroad.</p>
<p>The corporate war dead of future conflicts will almost certainly include Americans who previously served their country honorably in uniform. Their lives should be viewed as no more expendable as contractors than as soldiers, sailors, airmen or Marines. </p>
<p>Our contribution to the ongoing debate on contractors is important, but modest. Our sample represents less than a quarter of the private military contractors’ total population. The public still knows almost nothing about military contractors or the organizations they are affiliated with. </p>
<p>Contractors’ variation in experience, training and capabilities is broad and not well understood. Most contractors are not Westerners, but rather <a href="https://fas.org/sgp/crs/natsec/R40764.pdf">third country nationals</a>, recruits from Iraq and Afghanistan. Many others are veterans from other countries, such as Peru, Colombia, Fiji and Uganda. Some bring less institutional experience, as the industry recruits former <a href="https://www.aljazeera.com/programmes/specialseries/2017/04/child-soldiers-reloaded-privatisation-war-170424204852514.html">child soldiers</a> from Sierra Leone and ex-guerrilla fighters from the FARC. </p>
<p>Some very big questions still lack any answer at all. Are contractors better or worse than service members in achieving a country’s political ends abroad? Is the U.S. using them effectively, making the most of what they do offer and mitigating those areas where they fall short? What are the unintended consequences of reliance on contractors in terms of human rights, legal complication, mismanagement and accountability?</p>
<p>Private military and security companies do not have real incentive to share these data, but the public interest is clear: The public needs it.</p><img src="https://counter.theconversation.com/content/113108/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A new study looks at obituaries of private military contractors killed at war. The majority are white men with significant military experience.Ori Swed, Assistant Professor of Sociology, Anthropology, and Social Work, Texas Tech UniversityThomas Crosbie, Assistant Professor of Military Operations and Military Studies, Royal Danish Defence CollegeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1100862019-01-20T14:41:52Z2019-01-20T14:41:52ZWhy private, for-profit health care is a terrible idea<figure><img src="https://images.theconversation.com/files/254444/original/file-20190118-100282-zf82ya.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">In 2017, Saskatchewan’s auditor general showed that a private pay MRI program actually increased wait times for scans rather than the promised reduction. Here, an MRI machine is prepared at Toronto's Sunnybrook Hospital on May 1, 2018. </span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Chris Young</span></span></figcaption></figure><p>Ontario Premier Doug Ford may be planning a two-tiered, profit-driven health-care system, according to the <a href="https://www.thestar.com/opinion/star-columnists/2019/01/09/the-secret-moves-to-increase-private-health-care.html"><em>Toronto Star</em></a>. This is clearly the wrong solution to the health-care woes of the province, and the nation as a whole.</p>
<p>In <a href="https://toronto.ctvnews.ca/jobs-budget-and-health-care-among-ford-government-s-priorities-for-2019-1.4243834">a letter to Ontario’s 68,000 civil servants</a>, written on Jan. 7, Ford promised to quickly end “hallway medicine” and to adequately fund health care. </p>
<p>There is no question that Ontario’s health-care system needs to improve. But prioritizing care based on ability to pay instead of medical need will only exacerbate hallway medicine and wait times for all but the wealthiest patients.</p>
<h2>Private payment increases wait times</h2>
<p>A <a href="https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(17)30818-8/fulltext?code=lancet-site">2017 ranking of health-care access and quality in 195 countries</a> gave Canada a score of 88 out of 100. That places our health system in the top 10 per cent in the world. Does this excuse inaction in areas where we must improve? Of course not, but it suggests that there are many elements of our current system worth keeping.</p>
<p>Evidence from Australia to Germany and Switzerland demonstrates that <a href="https://www.cbc.ca/news/opinion/two-tiered-health-1.3848228">private payment increases wait times for the majority of patients</a> who depend on publicly funded services and increases total system costs. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/254433/original/file-20190117-32819-zq07z3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/254433/original/file-20190117-32819-zq07z3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=404&fit=crop&dpr=1 600w, https://images.theconversation.com/files/254433/original/file-20190117-32819-zq07z3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=404&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/254433/original/file-20190117-32819-zq07z3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=404&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/254433/original/file-20190117-32819-zq07z3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=507&fit=crop&dpr=1 754w, https://images.theconversation.com/files/254433/original/file-20190117-32819-zq07z3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=507&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/254433/original/file-20190117-32819-zq07z3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=507&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Dr. Darius Viskontas, second left, and his team prepare to remove a cyst from a male patient’s knee, at the Cambie Surgery Centre, in Vancouver during 2016. Founder, Dr. Brian Day, is fighting to overturn the B.C. Medicare Protection Act.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Darryl Dyck</span></span>
</figcaption>
</figure>
<p>In fact, countries that outperform Canada on global rankings <a href="https://www.cihi.ca/en/access-data-reports/results?f%5B0%5D=field_primary_theme%3A2063">spend more public dollars on health care (80-85 per cent) than we do (73 per cent)</a> and cover a broader range of services.</p>
<p>We don’t need to rely on international experience alone to see the folly of Ford’s privatization scheme. In 2017, Saskatchewan’s auditor general showed that <a href="https://globalnews.ca/news/3508109/private-mri-scans-not-reducing-wait-times-sask-auditor/">a private-pay MRI program actually increased wait times for scans rather than the promised reduction</a>.</p>
<p>In British Columbia, former premier Gordon Campbell, now a close adviser to Ford, happily allowed private payment and for-profit clinics to flourish. Now the Cambie Surgeries Corporation, a for-profit investor-owned facility, is fighting a <a href="http://evidencenetwork.ca/a-primer-on-the-legal-challenge-between-dr-brian-day-and-british-columbia-and-how-it-may-affect-our-healthcare-system/">constitutional challenge in the province’s Supreme Court</a> to overturn the B.C. Medicare Protection Act. </p>
<p>This corporation seeks to open the doors to a second tier of private payment for medically necessary care, to allow extra-billing in excess of the public fee schedule, and to allow dual practice — so that doctors working within the public system can charge both the government and patients for the very same service.</p>
<h2>For-profit clinics cost more</h2>
<p>Back in 2000, the previous Ontario Conservative government under Mike Harris awarded a contract to a private for-profit group to deal with a backlog in radiation cancer treatment. The government gave the clinic $4 million in start-up costs and <a href="http://www.ontariohealthcoalition.ca/wp-content/uploads/FULL-REPORT-October-1-2007.pdf">according to a report from the auditor general</a>, treatment at the clinic cost $500 more per patient compared to public non-profit hospitals. </p>
<p>Simply, profit-driven clinics will not keep money in patients’ pockets, one of Ford’s key campaign promises.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/254430/original/file-20190117-32828-twkofl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/254430/original/file-20190117-32828-twkofl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/254430/original/file-20190117-32828-twkofl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/254430/original/file-20190117-32828-twkofl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/254430/original/file-20190117-32828-twkofl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/254430/original/file-20190117-32828-twkofl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/254430/original/file-20190117-32828-twkofl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Ontario Premier Doug Ford, left to right, poses with Deputy Premier and Health Minister Christine Elliott and Lt.-Gov. Elizabeth Dowdeswell during a swearing-in ceremony at Queen’s Park in Toronto on June 29, 2018.</span>
<span class="attribution"><span class="source">THE CANADIAN PRESS/Mark Blinch</span></span>
</figcaption>
</figure>
<p>Supporters of private payment — such as Ford — argue that it frees up resources and shortens wait lines in the public system. This is false. New doctors and nurses are not created from thin air. The majority of Canadians, who would continue to rely on a public system, would wait even longer for doctors, nurses and others who would be incentivized to work fewer hours in the public system, and more in the lucrative private pay system. </p>
<p>With fewer health-care workers remaining in the public system, it’s no surprise “hallway medicine” would worsen for those left behind.</p>
<h2>Medical care must be based on need</h2>
<p>There are evidence-based solutions that are better than for-profit care and that will ensure equitable access to care for all of us.</p>
<p>For example, renowned spine surgeon Dr. Raj Rampersaud launched a pilot project in Toronto that decreased the average wait time to see a spine specialist from 18 months to as little as two weeks and <a href="https://www.thestar.com/news/gta/2018/09/28/renowned-spine-surgeon-is-transforming-the-way-ontario-deals-with-back-pain.html">decreased the use of MRIs by 30 per cent</a>.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/XZnoC0LOydM?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Barbara Pereira speaks about receiving treatment for back pain at one of the Inter-professional Spine Assessment and Education Clinics launched by Dr. Raj Rampersaud. These clinics have drastically cut wait times for treatment.</span></figcaption>
</figure>
<p>Another successful example is <a href="https://www.ehealthontario.on.ca/images/uploads/regional_partners/Champlain_BASE_cNEO_Fact_Sheet_eConsult_EN.pdf">an “eConsult” project piloted in Ottawa</a>. Built around virtual access to specialists, this reduced the need for in- person consultations by 40 per cent, with specialist advice arriving, on average, in just two days. The fastest response? Six minutes. This program is now available across Ontario.</p>
<p>There are many other examples of how we can shorten wait times to improve access to care, none of which overturn medicare’s fundamental principles of providing care based on need, not ability to pay.</p>
<p>We cannot allow a select few to profit from changes in our health-care system that will negatively impact most of us for generations to come. We need to improve how we organize and deliver our care, and adequately fund the system rather than financially starving and mismanaging it as Ford plans. </p>
<p>Allowing private payment is an overly simplistic solution to a complex problem. And it is wrong.</p><img src="https://counter.theconversation.com/content/110086/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sarah Giles is a board member for Canadian Doctors for Medicare.</span></em></p><p class="fine-print"><em><span>Danyaal Raza is a board member for Canadian Doctors for Medicare.</span></em></p><p class="fine-print"><em><span>Rupinder Brar is a board member for Canadian Doctors for Medicare.</span></em></p>A two-tier, for-profit health-care system will not end “hallway medicine” in Ontario or elsewhere; evidence from around the world shows that private payment increases wait times for the majority.Sarah Giles, Lecturer in Family Medicine, Faculty of Medicine, L’Université d’Ottawa/University of OttawaDanyaal Raza, Family Physician & Assistant Professor, University of TorontoRupinder Brar, Clinical Assistant Professor, University of British ColumbiaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1098562019-01-15T11:28:53Z2019-01-15T11:28:53ZWhy privatizing the VA or other essential health services is a bad idea<p>The Trump administration <a href="https://www.nytimes.com/2019/01/12/us/politics/veterans-administration-health-care-privatization.html">wants to shift</a> billions of dollars from government-run veterans’ hospitals to private health care providers. That’s true even though earlier this year the administration <a href="https://www.politico.com/story/2018/03/29/david-shulkin-veterans-affairs-secretary-privatizing-491590">vehemently denied</a> it would privatize any part of the Department of Veterans Affairs.</p>
<p>The privatization of essential government services is nothing new, of course. Over the years, countries have <a href="https://www.downsizinggovernment.org/privatization">privatized dozens of services and activities</a> that were once the sole domain of governments, such as the provision of electricity and water, road operations and prisons and even health care, with the ostensible aim of making them more efficient. </p>
<p>But before going down that road, the question needs to be asked whether privatizing essential human services such as those for military veterans serves the public interest. New research <a href="https://academic.oup.com/jpart/advance-article/doi/10.1093/jopart/muy009/4938536">we recently published</a> suggests that privatization may come at a social cost. </p>
<h2>Economic incentives of privatization</h2>
<p>Privatization theory assumes that organizations, including those that <a href="https://academic.oup.com/jpart/article/17/3/501/943117?searchresult=1">deliver social services</a>, thrive on competition and monetary gain. </p>
<p><a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1540-6210.00157">Supporters of privatization</a> argue that companies can perform government functions more efficiently. More competition and more choice for clients are expected to put pressure on providers to be more innovative and aware of financial costs. </p>
<p>In the public sector, however, competition is almost by definition absent, either because users of services cannot be excluded from the service – breathing clean air, for example – or because there is little monetary gain to be made – such as with services to the homeless. </p>
<p>So in situations where there is no real market, governments have attempted to mimic their conditions, such as by giving citizens the freedom to choose a public service provider or negotiating contracts that include certain performance incentives. </p>
<p>But this reliance on performance contracts <a href="https://academic.oup.com/jpart/article/17/2/189/894972?searchresult=1#15497641">can lead business providers</a> to focus on short-term financial targets – such as the number of people processed per dollar spent – often at the expense of long-term outcomes for those served. </p>
<p>This gives business providers a strong incentive to <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/pam.21695">concentrate on serving</a> people who are most likely to help them achieve these goals by either focusing on those clients who are most likely to succeed or disregarding the ones that are harder to serve. By focusing on easier-to-serve clients and shunning the ones who are costly, service providers are more likely to make a profit.</p>
<p>However, it’s often difficult to know in advance who’s going to cost more than someone else. As a result, many service providers end up relying on imperfect, discriminatory cues to help them weed out potential cost burdens. <a href="https://academic.oup.com/qje/article/133/1/191/4060073">Companies do something similar</a> when they use stereotypes about race or ethnicity as discriminatory proxies for unobserved characteristics in job applicants.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/253750/original/file-20190114-43529-13r93kd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The seal affixed to the front of the Department of Veterans Affairs building in Washington.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Veterans-Affairs/3aa69f27e60a47d7b946bf672f481000/80/0">AP Photo/Charles Dharapak</a></span>
</figcaption>
</figure>
<h2>Kenny and Mohammed</h2>
<p>To learn more about whether for-profit service providers treat people of marginalized ethnic backgrounds differently, <a href="https://doi.org/10.1093/jopart/muy009">we ran a field experiment</a> in the Belgian elderly care sector. We chose Belgium because the industry includes both public and private homes, and one of us is based there. </p>
<p>We sent basic information requests to all public and for-profit nursing homes in Flanders, the Dutch-speaking part of Belgium. Half of the requests, randomly assigned, appeared to come from a Belgian citizen (Kenny Maes), while the rest bore the signature of someone with a North African name (Mohammed El Makrini). The names were chosen based on the results of a separate survey we sent out to 2,000 Belgians asking them to rate several names on their perceived ethnicity, age, level of education and wealth. </p>
<p>In the requests, we asked nursing homes for advice on how to subscribe for a place in their facility. Withholding such information would make it harder for a prospective client to apply for a spot.</p>
<p>Of the 223 nursing homes we contacted, 71 percent responded, with public facilities being a little more likely than for-profit ones to get back to us. In general, each type of home responded to our two senders at similar rates. For example, 76 percent of public facilities replied to “Kenny,” compared with 79 percent for “Mohammed.” The response rate of for-profit homes was a bit more lopsided, but it was not what we’d consider a significant difference given the sample size: 66 percent for Kenny and 57 percent for Mohammed. </p>
<p>The really interesting finding was when we analyzed the actual responses. Upon closer inspection, we found that for-profit nursing homes were significantly less likely to provide information to Mohammed on how to enroll. Only about 43 percent of the for-profit homes that responded offered him the info, compared with 63 percent for Kenny. There was basically no difference among public facilities.</p>
<p>This is direct proof of for-profit providers discriminating against prospective clients based on their perceived ethnicity. But they’re not doing it simply out of ethnic animus. If it was, we’d have seen the same discrimination at the public facilities as well.</p>
<p>Rather, the motivation seems to be primarily economic. This is what economists call “<a href="http://www.nber.org/papers/w15860">statistical discrimination</a>.” In other words, average characteristics of the minority group – such as language barriers and having different cultural needs and habits that make them more difficult to serve – are used to stereotype individuals who belong to that particular group.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/253751/original/file-20190114-43535-10hwom.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">For-profit service providers may use discrimination as a way to make more money.</span>
<span class="attribution"><span class="source">wavebreakmedia/Shutterstock.com</span></span>
</figcaption>
</figure>
<h2>Unintended consequences</h2>
<p>The <a href="http://www.governing.com/topics/mgmt/pros-cons-privatizing-government-functions.html">public debate about privatization</a> tends to almost exclusively focus on its supposed financial and managerial advantages – which are <a href="http://www.pogo.org/our-work/reports/2011/co-gp-20110913.html#Executive%20Summary">hardly clear cut</a>. Meanwhile, the potential social costs of privatization are commonly neglected. </p>
<p><a href="https://scholar.google.com/citations?user=PA7TqeEAAAAJ&hl=en&oi=ao">Our</a> <a href="https://scholar.google.com/citations?user=mniink4AAAAJ&hl=en&oi=ao">research</a> suggests that privatizing human services such as health care can result in less access for groups perceived as harder to serve because of language barriers and cultural differences. </p>
<p>Unfortunately, they also happen to be the groups that need such services the most.</p>
<p><em>This is an updated version of an <a href="https://theconversation.com/privatizing-essential-human-services-like-the-va-can-come-at-a-high-social-cost-96092">article originally published</a> on May 18, 2018.</em></p><img src="https://counter.theconversation.com/content/109856/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Trump administration is preparing to shift billions in veterans’ health care spending to private providers. Research suggests privatizing essential services comes with a social cost.Sebastian Jilke, Assistant Professor, Rutgers University - NewarkWouter Van Dooren, Professor of Public Administration, University of AntwerpLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1022252018-08-28T10:39:35Z2018-08-28T10:39:35ZElon Musk was right to drop his bungled plan to take Tesla private<figure><img src="https://images.theconversation.com/files/233712/original/file-20180827-75981-1wmjscn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Elon Musk changed his mind about privatizing Tesla.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Nummi-Tesla/4b96290d058a47e2b1c5cc87668c6388/33/1">AP Photo/Paul Sakuma</a></span></figcaption></figure><p>Elon Musk shocked the world – including his own car company’s board – on Aug. 7 when <a href="https://twitter.com/elonmusk/status/1026872652290379776?mod=article_inline">he tweeted</a> that he had the “funding secured” to take Tesla private. A little more than two weeks of <a href="https://www.nytimes.com/aponline/2018/08/25/us/ap-us-tesla-staying-public.html">uncertainty</a>, confusion and a wildly fluctuating stock price later, the billionaire entrepreneur abruptly <a href="https://www.tesla.com/blog/staying-public">called the whole thing off</a>. </p>
<p>While he said the reason for the change of heart is that investors urged him to keep Tesla public, Musk could have simply glanced at the history of leveraged buyouts, more commonly known as LBOs. </p>
<p>It is a history replete with both <a href="http://articles.latimes.com/1988-10-22/business/fi-383_1_average-return">successes</a> that made some people very wealthy and <a href="http://archive.fortune.com/magazines/fortune/fortune_archive/2003/10/13/350888/index.htm">failures</a> that resulted in big losses – as well as bankruptcies and layoffs.</p>
<p>In my experience, as an <a href="https://theconversation.com/profiles/erik-gordon-124363">expert on mergers and acquisitions</a>, Tesla’s situation looks more like the <a href="https://www.wsj.com/articles/SB10001424052748704013004574515450045378722">failures</a> than the success stories. Nonetheless, Musk’s aborted attempt raises an interesting question: What separates success from failure? </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1026872652290379776"}"></div></p>
<h2>The LBO era begins</h2>
<p>While <a href="https://heinonline.org/HOL/Page?handle=hein.journals/nylr49&div=45&g_sent=1&casa_token=&collection=journals">the history</a> of taking a company private goes back to at least to the 1930s, the current chapter relevant to Tesla began in the 1980s when deal makers first began to raise large amounts of debt to buy companies. This era marked the birth of the LBO. </p>
<p>Using debt, or leverage, to raise the funds necessary to buy a company increased the payoff if a deal succeeded – but also the risk of large losses should it fail. </p>
<p>The 1982 acquisition of Gibson Greetings by a group that included former Treasury Secretary William Simon <a href="https://www.nytimes.com/1983/08/07/business/reaping-the-big-profits-from-a-fat-cat.html">became</a> the archetype for later LBOs. The investors acquired the greeting card company for US$80 million and financed all but $1 million with debt and by selling off its real estate holdings. </p>
<p>It was a huge success for the investors and management. Eighteen months later they re-took the company public with a valuation of over $290 million. Simon alone made $70 million on his investment of less than $350,000, an astonishing 80,000 percent gain in a very short period.</p>
<p>Despite the leverage, the deal was conservative in one important sense: The company <a href="https://www.nytimes.com/1992/01/28/business/market-place-win-or-lose-buyouts-do-it-big.html">generated twice as much cash</a> as it needed in order to meet its debt obligations. </p>
<p>Other successful buyouts, such as <a href="https://www.bloomberg.com/news/articles/2018-05-18/blackstone-is-said-to-plan-sale-of-remaining-stake-in-hilton">Blackstone’s takeover of Hilton Worldwide</a> in 2007 and founder Michael Dell’s <a href="https://dealbook.nytimes.com/2013/02/05/dell-sets-23-8-billion-deal-to-go-private">buyout of his eponymous computer maker</a> in 2013, also had lots of so-called free cash flow – the cash left over after paying the bills.</p>
<p>As we’ll see, that made all the difference.</p>
<h2>‘Barbarian’ buyouts</h2>
<p>Perhaps the most famous LBO ever illustrates the perils of going private.</p>
<p>In 1988, private equity firm KKR <a href="https://www.businessinsider.com/rjr-nabisco-lbo-private-equity-deal-2012-1">bought out RJR Nabisco</a> for $24 billion after an intense bidding war with the tobacco and food conglomerate’s own CEO, Ross Johnson, who started it all by trying to do an LBO of his own. </p>
<p>The <a href="https://www.harpercollins.com/9780061655555/barbarians-at-the-gate/">classic business book</a> “Barbarians at the Gate” immortalized the deal’s ups and downs and colorful personalities.</p>
<p>But <a href="http://archive.fortune.com/magazines/fortune/fortune_archive/2005/06/13/8262550/index.htm">it ended badly</a> for KKR when RJR’s debt burden limited its ability to compete with Philip Morris and makers of low-priced <a href="http://archive.fortune.com/magazines/fortune/fortune_archive/2003/10/13/350888/index.htm">cigarettes</a>. It ended even worse for the 40 percent of the company’s employees who lost their jobs. </p>
<p>Not everyone lost, however. Johnson walked away with $53 million. This led to the typical criticism of LBOs: They make a few people rich but ruin the lives of <a href="https://www.rollingstone.com/politics/politics-news/why-private-equity-firms-like-bain-really-are-the-worst-of-capitalism-241519/">many others</a>. </p>
<h2>Great for investors</h2>
<p>Academic studies on the success of LBOs have produced differing results, depending on the time period they examine and how they measure success. Overall, they show that buyouts tend to be good for investors but more mixed for employees. </p>
<p>A <a href="http://dx.doi.org/10.2139/ssrn.1932316">2011 study</a> found that LBO investors on average earned over 3 percent per year more than had they simply invested in the Standard and Poor’s 500 from the 1980s through the 2000s.</p>
<p>As for workers, <a href="http://www.nber.org/papers/w17399">studies indicate</a> that, as a whole, there is little net gain or loss of employment as a result of an LBO. That’s because while about 3 percent of a target’s workforce is cut in the first two years, other jobs are eventually created that make it a wash. </p>
<p>Of course, that is little comfort to the thousands of employees or even tens of thousands who suddenly lose their jobs. </p>
<h2>Show me the money</h2>
<p>So what separates the LBO winners from the losers? </p>
<p>Recent post-LBO bankruptcies by Texas utility <a href="https://www.forbes.com/sites/debtwire/2017/02/16/texas-utility-giant-efh-poised-to-exit-bankruptcy-after-three-years/#bc62ee83a6be">Energy Future Holdings</a> and <a href="https://www.washingtonpost.com/news/morning-mix/wp/2017/09/19/toys-r-u-s-files-for-bankruptcy/?noredirect=on&utm_term=.3b7ef5a9ebc5">Toys R Us</a> has put the spotlight on the risks of acquiring too much debt. The <a href="https://dealbook.nytimes.com/2014/04/29/big-texas-utility-files-for-bankruptcy/">$45 billion buyout</a> of Energy Future in 2007 was financed by $37 billion in debt, while Toys R Us has struggled to pay down the more than $5 billion it took on from its 2005 deal.</p>
<p>But that only tells part of the story. Both failures suffered from managerial mistakes and changes to their business environments. Energy Future was clobbered by a <a href="https://www.wsj.com/articles/energy-future-holdings-files-for-chapter-11-bankruptcy-1398767452">drop in energy prices</a>. Executives at Toys R Us <a href="https://www.forbes.com/sites/parmyolson/2017/09/19/toys-r-us-chapter-11-amazon/#2c002c522c50">failed to adapt</a> to new competitive conditions as retailing moved online. </p>
<p>The key point is that excessive leverage leaves a company vulnerable to a single bad decision, market swoon or other surprise. This is where we come back to the importance of free cash flow. Highly leveraged companies must use a lot of cash to repay debt. That leaves them with little to handle problems or invest in the business.</p>
<p>For example, when RJR Nabisco <a href="http://archive.fortune.com/magazines/fortune/fortune_archive/2003/10/13/350888/index.htm">faced shrinking sales</a>, its pile of debt left it with too little cash to battle stiff competition. In other words, debt magnifies the effects of mistakes and twists of fate.</p>
<p>But a company like Gibson with steady or growing free cash flow is more likely to have the money it needs to service its debt and handle surprises. And such a company is more likely to succeed after an LBO.</p>
<p>Tesla is thoroughly in RJR Nabisco’s camp, except infinitely worse. RJR had low debt and capital <a href="https://www.jstor.org/stable/4479468?seq=1#page_scan_tab_contents">expenditures</a> and expected to generate over $3.5 billion in free cash flow in the three years after the deal – and that still wasn’t enough. Tesla is burning through every dollar it takes in and more and carries about $10 billion in debt. In 2017 alone, its free cash flow was a <a href="https://www.marketwatch.com/investing/stock/tsla/financials/cash-flow">negative $4.1 billion</a>, which means more cash went out its doors than into its coffers, in part because of significant capital expenditures.</p>
<p>Musk suggested the buyout price tag would be $80 billion. Even if he borrowed only a third of that, that would still require significant amounts of cash to cover interest payments. </p>
<h2>A charismatic founder</h2>
<p>A final distinguishing factor worth noting is whether or not a founder or current manager is part of the group taking the company private. </p>
<p>With Tesla, some investors I’ve spoken to thought that having the charismatic CEO lead the buyout would be a big advantage – and would help offset the risks of too much leverage and not enough cash. They pointed to the <a href="https://www.bloomberg.com/news/articles/2018-07-02/dell-to-return-to-public-markets-with-tracking-stock-buyout">success</a> of Dell’s <a href="https://dealbook.nytimes.com/2013/02/05/dell-sets-23-8-billion-deal-to-go-private">privatization</a> for $24 billion in 2013. But once again, Dell was a cash machine, with over $5 billion in free cash flow at the time of the LBO. </p>
<p><a href="https://hbr.org/2002/09/the-curse-of-the-superstar-ceo">Some research questions</a> the “special” powers of a charismatic CEO, while companies like Macy’s that were taken private by management <a href="http://articles.latimes.com/1992-01-28/news/mn-841_1_bankruptcy-filing">ended up in bankruptcy</a> as well – with tens of thousands of <a href="https://www.apnews.com/ac3cd5829bb93a87122cad767600bb3f">job losses</a>. </p>
<p>When you sum the factors that are likely to lead to LBO success or failure, Musk’s idea to take Tesla private looked bad. Luckily for Tesla stockholders, he wasn’t able to implement it. As history reminds us, some LBOs are better left not done.</p><img src="https://counter.theconversation.com/content/102225/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Erik Gordon does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The history of leveraged buyouts suggest Musk was smart to heed the advice of investors and nip his plan to take Tesla private in the bud.Erik Gordon, Clinical Assistant Professor, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/960922018-05-18T10:41:35Z2018-05-18T10:41:35ZPrivatizing essential human services like the VA can come at a high social cost<figure><img src="https://images.theconversation.com/files/219498/original/file-20180517-26295-1rk05l0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">For-profit service providers may use discrimination as a way to make more money.</span> <span class="attribution"><span class="source">wavebreakmedia/Shutterstock.com</span></span></figcaption></figure><p>Over the years, countries have <a href="https://www.downsizinggovernment.org/privatization">privatized dozens of services and activities</a> once the sole domain of governments, such as the provision of electricity and water, road operations, prisons and even health care, with the ostensible aim of making them more efficient. </p>
<p>In the U.S., the Trump administration <a href="http://theweek.com/speedreads/754859/trump-proposes-privatizing-federal-assets-including-airports-freeways-international-space-station">has said it wants</a> to add airports and the International Space Station to that list. Some even <a href="https://www.nytimes.com/2018/03/28/opinion/shulkin-veterans-affairs-privatization.html">suggested</a> – though <a href="https://www.politico.com/story/2018/03/29/david-shulkin-veterans-affairs-secretary-privatizing-491590">vehemently denied</a> – that there was a plan to privatize health care services for veterans. </p>
<p>Before going down that road, the question needs to be asked whether privatizing essential human services serves the public interest. New research we <a href="https://academic.oup.com/jpart/advance-article/doi/10.1093/jopart/muy009/4938536">recently published</a> suggests that privatization may come at a social cost. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/219502/original/file-20180517-26300-1k7ihgt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/219502/original/file-20180517-26300-1k7ihgt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/219502/original/file-20180517-26300-1k7ihgt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/219502/original/file-20180517-26300-1k7ihgt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/219502/original/file-20180517-26300-1k7ihgt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/219502/original/file-20180517-26300-1k7ihgt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/219502/original/file-20180517-26300-1k7ihgt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Cornell Brooks, national president of the NAACP, and others spoke out in 2017 against a plan to privatize Atlantic City’s water supply.</span>
<span class="attribution"><span class="source">AP Photo/Wayne Parry</span></span>
</figcaption>
</figure>
<h2>Economic incentives of privatization</h2>
<p>Privatization theory assumes that organizations, including those that <a href="https://academic.oup.com/jpart/article/17/3/501/943117?searchresult=1">deliver social services</a>, thrive on competition and monetary gain. </p>
<p><a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/1540-6210.00157">Supporters of privatization</a> argue that companies can perform government functions more efficiently. More competition and more choice for clients are expected to put pressure on providers to be more innovative and aware of financial costs. </p>
<p>In the public sector, however, competition is almost by definition absent, either because users of services cannot be excluded from the service – breathing clean air, for example – or because there is little monetary gain to be made – such as with services to the homeless. </p>
<p>So in situations where there is no real market, governments have attempted to mimic their conditions, such as by giving citizens the freedom to choose a public service provider or negotiating contracts that include certain performance incentives. </p>
<p>But this reliance on performance contracts can lead business providers to focus on short-term financial targets – such as the number of people processed per dollar spent – oftentimes at the expense of long-term outcomes for the people served. That’s the conclusion of a <a href="https://academic.oup.com/jpart/article/17/2/189/894972?searchresult=1#15497641">study</a> of a for-profit, welfare-to-work training program in the United States. </p>
<p>This gives business providers a strong incentive to <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/pam.21695">concentrate their efforts</a> on serving people that are most likely to help them achieve these goals by either focusing on those clients who are most likely to succeed or disregarding the ones that are harder to serve. Examples may include supporting primarily motivated job seekers to apply for employment or trying to avoid chronically sick patients. By focusing on easier-to-serve clients and shunning the ones who are costly, service providers are more likely to make a profit.</p>
<p>However, it’s often difficult to know in advance who’s going to cost more than someone else. As a result, many service providers end up relying on imperfect, discriminatory cues to help them weed out potential cost burdens. <a href="https://academic.oup.com/qje/article/133/1/191/4060073">Companies do something similar</a> when they use stereotypes about race or ethnicity as discriminatory proxies for unobserved characteristics in job applicants.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/219484/original/file-20180517-26286-p6ddyp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/219484/original/file-20180517-26286-p6ddyp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/219484/original/file-20180517-26286-p6ddyp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/219484/original/file-20180517-26286-p6ddyp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/219484/original/file-20180517-26286-p6ddyp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/219484/original/file-20180517-26286-p6ddyp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/219484/original/file-20180517-26286-p6ddyp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Former Veterans Affairs Secretary David Shulkin believes he was ousted as part of plan to privatize the agency.</span>
<span class="attribution"><span class="source">AP Photo/Andrew Harnik</span></span>
</figcaption>
</figure>
<h2>Makrini and Maes</h2>
<p>To learn more about whether for-profit service providers treat people of marginalized ethnic backgrounds differently, <a href="https://academic.oup.com/jpart/advance-article/doi/10.1093/jopart/muy009/4938536">we ran a field experiment</a> in the Belgian elderly care sector. We chose Belgium because the industry includes both public and private homes, and one of us is based there. </p>
<p>We sent basic information requests to all public and for-profit nursing homes in Flanders, the Dutch-speaking part of Belgium. Half of the requests, randomly assigned, appeared to come from a Belgian citizen (Kenny Maes), while the rest bore the signature of someone with a North African name (Mohammed El Makrini). The names were chosen based on the results of a separate survey we sent out to 2,000 Belgians asking them to rate several names on their perceived ethnicity, age, level of education and wealth. </p>
<p>In the requests, we asked nursing homes for advice on how to subscribe for a place in their facility. Withholding such information would make it harder for a prospective client to apply for a spot.</p>
<p>Of the 223 nursing homes we contacted, 71 percent responded, with public facilities being a little more likely than for-profit ones to get back to us. In general, each type of home responded to our two senders at similar rates. For example, 76 percent of public facilities replied to “Kenny,” compared with 79 percent for “Mohammed.” The response rate of for-profit homes was a bit more lopsided, but it was not what we’d consider a significant difference given the sample size: 66 percent for Kenny and 57 percent for Mohammed. </p>
<p>The really interesting finding was when we analyzed the actual responses. Upon closer inspection, we found that for-profit nursing homes were significantly less likely to provide information to Mohammed on how to enroll. Only about 43 percent of the for-profit homes that responded offered him the info, compared with 63 percent for Kenny. There was basically no difference among public facilities.</p>
<p>This is direct proof of for-profit providers discriminating against prospective clients based on their perceived ethnicity. But they’re not doing it simply out of ethnic animus. If it was, we’d have seen the same discrimination at the public facilities as well.</p>
<p>Rather, the motivation seems to be primarily economic. This is what economists call “<a href="http://www.nber.org/papers/w15860">statistical discrimination</a>.” In other words, average characteristics of the minority group – such as language barriers and having different cultural needs and habits that make them more difficult to serve – are used to stereotype individuals who belong to that particular group.</p>
<h2>Unintended consequences</h2>
<p>The <a href="http://www.governing.com/topics/mgmt/pros-cons-privatizing-government-functions.html">public debate about privatization</a> tends to almost exclusively focus on its supposed financial and managerial advantages – which are <a href="http://www.pogo.org/our-work/reports/2011/co-gp-20110913.html#Executive%20Summary">hardly clear cut</a>. Meanwhile, the potential social costs of privatization are commonly neglected. </p>
<p><a href="https://scholar.google.com/citations?user=PA7TqeEAAAAJ&hl=en&oi=ao">Our</a> <a href="https://scholar.google.com/citations?user=mniink4AAAAJ&hl=en&oi=ao">research</a> suggests that privatizing human services such as health care can result in less access for groups perceived as harder to serve because of language barriers and cultural differences. </p>
<p>Unfortunately, they also happen to be the groups that need such services the most.</p><img src="https://counter.theconversation.com/content/96092/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Trump administration wants to privatize more of the federal bureaucracy. New research suggests this can lead to discrimination in essential government services.Sebastian Jilke, Assistant Professor, Rutgers University - NewarkWouter Van Dooren, Professor of Public Administration, University of AntwerpLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/911792018-02-07T17:23:53Z2018-02-07T17:23:53ZWhy privatizing Puerto Rico’s power grid won’t solve its energy problems<figure><img src="https://images.theconversation.com/files/204880/original/file-20180205-19921-dz70nw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Puerto Rico's power utility, PREPA, has been decimated by years of scarcity and bad management. But will privatizing it really turn the lights back on for Puerto Ricans?</span> <span class="attribution"><span class="source">AP Photo/Carlos Giusti</span></span></figcaption></figure><p><em>Leer en <a href="https://theconversation.com/la-privatizacion-de-prepa-compromete-el-desarrollo-energetico-de-puerto-rico-90973">español</a>.</em></p>
<p>Perhaps nothing is clearer to Puerto Ricans right now than the importance of having a good power grid. Hurricane Maria battered the island months ago, yet for many people the <a href="https://www.theatlantic.com/photo/2018/01/after-four-months-much-of-puerto-rico-still-dark-and-damaged/551756/">blackout continues</a>. </p>
<p>Not even the alleged <a href="http://www.aafaf.pr.gov/assets/prepa-revisedfiscalplan-01-24-18.pdf">70 percent of Puerto Ricans with restored electricity</a> nor the few solar-panel users who <a href="https://www.nbcdfw.com/news/business/Hurricane-Maria-Exposes-Problems-Within-Puerto-Ricos-Solar-Panel-Industry-471758064.html">never lost power</a> have escaped the consequences of this prolonged outage, which include <a href="http://time.com/5099781/puerto-rico-murder-rate-hurricane-maria/">increased crime</a>, business closures and <a href="http://www.businessinsider.com/sams-club-closures-leave-hundreds-without-jobs-in-puerto-rico-2018-1">unemployment</a>, a <a href="https://www.theatlantic.com/politics/archive/2017/10/puerto-ricos-health-care-crisis-is-just-beginning/544210/">health care crisis</a> and <a href="https://theconversation.com/will-puerto-ricans-return-home-after-hurricane-maria-87160">exodus to the U.S</a>. </p>
<p>A major barrier to restoring power is Puerto Rico’s <a href="http://www.slate.com/articles/business/metropolis/2017/09/hurricane_maria_could_lead_puerto_rico_s_electric_utility_prepa_to_privatize.html">public power utility</a>, known as PREPA. <a href="http://fortune.com/2017/07/02/puerto-rico-prepa-energy-bankruptcy/">Bankrupt</a>, its infrastructure dilapidated, PREPA has been <a href="https://www.npr.org/2017/10/20/558743790/why-its-so-hard-to-turn-the-lights-back-on-in-puerto">unable to repair the island’s devastated grid</a>. It is also seen as corrupt. In January, some customers left in the dark for months received bills for “services rendered.” Thousands more <a href="http://www.noticel.com/el-tiempo/huracanes/aee-reconoce-sobrefacturacin/693845038">were slapped with overcharges</a>.</p>
<p>So, when Gov. Ricardo Roselló recently <a href="https://www.reuters.com/article/us-puertorico-power-prepa/puerto-rico-to-sell-off-crippled-power-utility-prepa-idUSKBN1FB31M">announced that he would privatize Puerto Rico’s power grid</a>, many here welcomed the move. People are suffering – something must be done.</p>
<p>But as <a href="http://biology.uprm.edu/facultad/?prof=74">an ecology professor</a> and the director of the community group <a href="http://www.casapueblo.org">Casa Pueblo</a>, I believe selling off PREPA will bring Puerto Rico more headaches than relief. Here’s why.</p>
<h2>Privatization is an old idea</h2>
<p>Privatization is not a new idea in Puerto Rico, and the outcome wasn’t great the first time we tried it. </p>
<p>In the mid-1990s, the administration of Gov. <a href="https://www.bloomberg.com/news/articles/2017-04-19/his-father-ran-up-puerto-rico-s-debt-he-now-has-to-fix-the-mess">Pedro Rosselló</a> – father of the current governor – began <a href="http://www.nytimes.com/1998/06/19/us/plan-to-sell-puerto-rico-phone-company-leads-to-strike.html">privatizing Puerto Rican services</a> like telecomms, water, education and electricity. Thirty percent of the island’s power generation was sold to private coal and gas interests, among them the now defunct <a href="https://www.blackstone.com/media/press-releases/article/gas-natural-sdg-wins-final-auction-of-enron%27s-assets-in-ecoelectrica-de-puerto-rico">energy company Enron</a>.</p>
<p>PREPA – which during its <a href="https://www.economist.com/news/united-states/21730432-even-hurricane-maria-hit-it-was-mess-story-puerto-ricos-power-grid">mid-century glory days was a source of Puerto Rican national pride</a> – began a downward spiral. Its debt tripled from around <a href="http://www.presupuesto.gobierno.pr/PresupuestosAnteriores/AF99/SERDEUDA/Capdeud.htm">US$3 billion</a> in the 1990s to <a href="https://www.bloomberg.com/news/articles/2017-08-03/bondholders-disclose-3-billion-of-puerto-rico-electricity-debt">roughly $10 billion today</a>. In recent years, <a href="https://www.marketplace.org/2017/03/14/economy/puerto-rico-debt-plan-now-goes-creditors">austerity measures</a> resulting from <a href="http://time.com/20416/the-next-financial-catastrophe-you-havent-heard-about-yet-puerto-rico/">Puerto Rico’s financial crisis</a> have further decimated PREPA. </p>
<p>By the time Hurricane Maria hit, as Puerto Ricans soon learned, it was unable to fulfill its public mission.</p>
<p>Welcoming private energy companies to the island didn’t just weaken PREPA – it also damaged the environment. As revealed in a 2017 investigative reporting series by Puerto Rico’s Centro de Periodismo Investigativo, the multinational AES <a href="http://periodismoinvestigativo.com/series/bomba-de-tiempo-las-cenizas-de-carbon/">badly mismanaged the ash byproduct from a coal plant in Guayama, Puerto Rico</a>, to brutal results.</p>
<p>Mountains of this toxic waste was <a href="https://theconversation.com/in-puerto-rico-environmental-injustice-and-racism-inflame-protests-over-coal-ash-69763">haphazardly discarded in Arroyo Barril</a>, Dominican Republic, where it <a href="http://periodismoinvestigativo.com/2016/04/aes-transa-multimillonaria-demanda-por-danos/">leeched into the ground and water supply</a>. <a href="http://periodismoinvestigativo.com/2016/03/something-happened-in-arroyo-barril/">Miscarriages and birth deformations spiked</a>, among other illnesses. A lawsuit was <a href="http://periodismoinvestigativo.com/2016/04/aes-transa-multimillonaria-demanda-por-danos/">settled</a> in 2016.</p>
<p>Coal ash has also been used as landfill when building affordable housing and highways across Puerto Rico. Giant heaps of it are part of <a href="https://www.elnuevodia.com/opinion/columnas/lascenizastoxicasdepenuelas-columna-2284426/">Guayama’s industrial landscape</a>. Still, no controls are in place to protect local water supplies from contamination.</p>
<h2>Private doesn’t mean better</h2>
<p>Puerto Rico’s post-Maria blackout also indicates that private companies aren’t always more effective than public utilities. </p>
<p>Currently, some <a href="https://www.elnuevodia.com/noticias/locales/nota/laaeeimpulsaagendadetransformacion-2387489/">6,000 workers from U.S. energy companies are on the ground to help PREPA restore the island’s grid</a>. The first to come was Whitefish, a Montana business based in the hometown of Secretary of the Interior Ryan Zinke. It won <a href="https://www.washingtonpost.com/national/small-montana-firm-lands-puerto-ricos-biggest-contract-to-get-the-power-back-on/2017/10/23/31cccc3e-b4d6-11e7-9e58-e6288544af98_story.html?utm_term=.e96f2961bd88">a $300 million bid</a> to rebuild Puerto Rico’s power distribution and transmission network. </p>
<p>It soon became clear this tiny company <a href="https://www.npr.org/sections/thetwo-way/2017/10/27/560422492/heres-what-s-in-that-300-million-whitefish-contract">could never get the job done</a>, triggering <a href="https://www.nytimes.com/2017/10/29/us/whitefish-cancel-puerto-rico.html">investigations into the deal</a>. </p>
<p>Similar contracts have followed, many also bearing the whiff of corruption. Data shows these foreign crews cost Puerto Rico <a href="https://www.elnuevodia.com/noticias/locales/nota/losacuerdosotorgadosporlaaeesuman500millonesypodrianaumentar-2368728/">10 times more than domestic line workers</a>. And still hundreds of thousands of people live in darkness.</p>
<h2>The shift to renewables</h2>
<p>The challenge now is not just to power up Puerto Rico, but to do so in a way that safeguards the island’s energy future. </p>
<p>In the race to restore the nation’s electricity post-Maria, the renewables sector <a href="https://theconversation.com/why-solar-microgrids-are-not-a-cure-all-for-puerto-ricos-power-woes-86437">saw solid gains</a>. Demand surged for <a href="http://thehill.com/opinion/energy-environment/353144-puerto-rico-needs-a-new-energy-grid-not-just-repairs-to-the-old">for more resilient power systems</a>. </p>
<p>Photovoltaic roof panels went up on government buildings, shops and homes across the island. Numerous startups have emerged, generating <a href="http://cb.pr/resurge-la-industria-de-energia-renovable-en-puerto-rico/">hundreds of jobs</a> in wind and solar production. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/204867/original/file-20180205-19956-2g8i3o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/204867/original/file-20180205-19956-2g8i3o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/204867/original/file-20180205-19956-2g8i3o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/204867/original/file-20180205-19956-2g8i3o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/204867/original/file-20180205-19956-2g8i3o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/204867/original/file-20180205-19956-2g8i3o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/204867/original/file-20180205-19956-2g8i3o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Renewable energy sources like wind and solar have been gaining traction in Puerto Rico. PREPA’s privatization could stem that.</span>
</figcaption>
</figure>
<p>The privatization of PREPA could stunt this green energy shift. We don’t yet know which companies have <a href="http://www.noticel.com/ahora/cuatro-empresas-han-propuesto-comprar-la-aee/686786121">expressed interest in running Puerto Rico’s power grid</a>, but both current political tides and Puerto Rican history suggest they’ll be fossil fuel-focused. </p>
<p>After all, the <a href="https://www.washingtonpost.com/news/monkey-cage/wp/2017/11/30/a-controversial-oversight-board-could-take-over-puerto-ricos-hurricane-rebuilding-effort/?utm_term=.5b9f9e5d5ad4">Fiscal Oversight Board that has governed Puerto Rico’s policy and budget</a> since <a href="https://www.theguardian.com/world/2016/jul/01/puerto-rico-default-debt-economic-crisis">the island’s 2016 debt default</a> has a demonstrated preference for old-school power generation. This unelected group of <a href="https://www.congress.gov/bill/114th-congress/senate-bill/2328/text">seven U.S. presidential appointees</a> has backed <a href="https://ejatlas.org/conflict/energy-anwser-incinerator-poisoning-puerto-ricos-main-agricultural-region">a questionable incinerator project from the company Energy Answer</a> and a <a href="https://www.elnuevodia.com/noticias/locales/nota/atodavelocidadlaconversionagas-1266908/">natural gas terminal at Guayama</a>. </p>
<p>The board also has a <a href="http://www.kutakrock.com/PROMESA-Puerto-Rico-Oversight-Economic-Stability-Act/">fiduciary duty</a> to prioritize Puerto Rico’s creditors, not its people. So whoever buys PREPA may publicly extol clean, renewable energy but in practice I wager that its development will see stumbling blocks.</p>
<h2>Fossil fuels are deadly</h2>
<p>I’d contend that it is risky for Puerto Rico – an island still recovering from a <a href="https://www.vox.com/energy-and-environment/2017/10/25/16504488/hurricane-season-2017-what-the-hell">brutal hurricane season worsened by climate change</a> – to further its dependence on coal and gas. These fossil fossil fuels <a href="https://www.nationalgeographic.org/encyclopedia/air-pollution/">cause water and air pollution</a>, contributing to <a href="https://climate.nasa.gov/causes/">global warming</a>. </p>
<p>Dirty energy is also costly. Puerto Rico’s dependence on <a href="http://energia.pr.gov/datos/">imported fuels</a> drained $22 billion from its economy during the first decade of this millennium. Meanwhile, renewable energy prices were dropping. Wind and solar are now more <a href="https://www.ecowatch.com/renewable-energy-costs-2525682123.html">competitive with fossil fuels</a>. </p>
<p>That’s why places like <a href="http://www.elmundo.es/ciencia/2016/09/18/57dc2d9f46163f19138b458a.html">Costa Rica</a>, <a href="http://www.sustentator.com/blog-es/2017/10/alemania-referente-mundial-de-las-energias-renovables/">Germany</a> and <a href="https://www.diariorenovables.com/2017/02/la-apuesta-de-hawai-potenciar-las-renovables-prohibir-coches-de-combustion.html">Hawaii</a> have either achieved or are building renewable grids that makes good use of sunshine, water, wind and biomasses like wood.</p>
<p>Puerto Rico has plenty of those resources. But embracing renewable power requires government commitment. Instead, Gov. Rosselló seems to be backing out of the Puerto Rican energy game, leaving the island’s energy future at the mercy of private capital.</p>
<p>In its desire to privatize and deregulate, Rosselló’s administration looks to be in lock step with Donald Trump, the U.S. president who <a href="https://www.cfr.org/interactives/campaign2016/donald-trump/on-energy-and-climate">doubts climate change</a> and <a href="https://www.nytimes.com/2018/01/24/business/energy-environment/coal-miners.html">loves coal mining</a>. </p>
<p>There are other hurdles to renewable energy in Puerto Rico, too, including <a href="http://time.com/5113472/donald-trump-solar-panel-tariff/">Trump’s recent 30 percent tax on imported solar panels</a> and unspeakably high fees <a href="https://www.elnuevodia.com/noticias/locales/nota/caminoalaprivatizacionlaaee-2393258/">imposed on locals who go off the grid</a>. It won’t be easy to make Puerto Rico energy self-sufficient.</p>
<p>But the reasons to do so are clear. Gov. Rosselló has laid out one vision for the island’s electric future. Now the Puerto Rican people must pursue theirs.</p><img src="https://counter.theconversation.com/content/91179/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Arturo Massol-Deyá is the associate director of Casa Pueblo, a non-profit environmental organization in Adjuntas, Puerto Rico. The foundation is self-sustaining but has received one-off funding from OXFAM, the Miranda Foundation and JPB for its Hurricane Maria recovery efforts.</span></em></p>Many Puerto Ricans are happy to see their broke power utility sold off to whoever can get the lights turned back on. But privatizing the island’s energy grid may bring more problems than relief.Arturo Massol-Deyá, Professor of MIcrobial Ecology, University of Puerto Rico - MayagüezLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/810752017-07-23T22:37:14Z2017-07-23T22:37:14ZFinanciers are now controlling public works, much to the public’s confusion<figure><img src="https://images.theconversation.com/files/179098/original/file-20170720-23983-414x4m.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ontarians got a taste of privatization in the 1990s, when the Conservative government of Mike Harris handed over the lucrative Highway 407 toll road in a 99-year lease for a fraction of its value.</span> <span class="attribution"><a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>In the 1990s the large, nationally owned British Railways was split off into dysfunctionally separate entities and <a href="http://news.bbc.co.uk/2/hi/uk_news/politics/982037.stm">sold off to private owners</a> in a world-famous example of complete privatization. </p>
<p>During the recent British election, polls revealed that most citizens now support the Labour Party’s <a href="https://www.theguardian.com/politics/2017/may/10/labour-party-manifesto-pledges-to-end-tuition-fees-and-nationalise-railways">promise to renationalize the system.</a> </p>
<p>This may not seem very relevant to Canadians, because we never went through wholesale privatization — in part because we never had the wholesale nationalizations that Britain had in the 1950s. </p>
<p>But suddenly these international debates have indeed become relevant to Canada, although the issues here are being obscured by the downright Orwellian terminology used by infrastructure insiders.</p>
<p>In Canada, outright privatization was promoted in the mid-1990s by the neoconservative government of Ontario Premier Mike Harris. But one of the first instances of infrastructure privatization, southern Ontario’s 407 toll highway, <a href="https://www.thestar.com/news/queenspark/2015/03/30/pc-blunder-over-highway-407-looms-over-liberals-on-hydro-cohn.html">proved to be a disaster</a> and so enthusiasm quickly faded.</p>
<p>But while they may have shied away from completely selling off major public works, Canadian governments at all levels have still found ways to go along with the global trend of giving private capital a bigger role in public works. </p>
<h2>Not really partnerships</h2>
<p>As I’ve learned as an academic researching infrastructure governance, what’s emerged as the main Canadian model goes by the name of “public-private partnerships.” <a href="http://munkschool.utoronto.ca/imfg/research/data-visualizations/infrastructure/">Ontario</a> and British Columbia are its key promoters, though the Ontario government prefers to use the obscure term “Alternative Finance and Procurement,” which does not contain the politically sensitive word “private.”</p>
<p>If George Orwell, that foe of euphemistic <a href="http://www.vqronline.org/essay/musing-about-orwell%E2%80%99s-politics-and-english-language%E2%80%9450-years-later">government-speak</a>, was still with us, he’d likely point out that “partnership” is a highly misleading term. Major provincial infrastructure projects like hospitals, bridges and transit lines do bring public and private sector “partners” together, but they’re not partnerships.</p>
<p>A legal partnership is a long-term agreement to join forces and share financial risks over time — such as a law firm with partners.</p>
<p>But today’s public-private partnerships are actually arrangements whereby corporations provide financing, engineering, construction and design services for projects chosen by governments and ultimately funded by governments. The construction folks do their work and leave. The lenders stick around to be repaid over a long period. And any project that cannot be made attractive to the big financial players simply does not get built.</p>
<p>Infrastructure financiers, including pension funds, make big profits. But in Canada, public-private projects have so far remained publicly owned. Some of these will generate revenue — like transit lines via passenger fares — but many will not, since in Canada road and <a href="http://www.metronews.ca/news/vancouver/2017/06/22/bc-liberals-vow-to-end-bridge-tolls-credit-downgrade.html">bridge tolls are politically unpopular</a>. That’s one major reason why the financiers don’t really want to own the assets.</p>
<h2>The bill isn’t due for decades</h2>
<p>Why do governments continue to overpay for private finance, as Ontario’s auditor general <a href="http://www.auditor.on.ca/en/content/annualreports/arreports/en15/3.07en15.pdf">pointed out in 2015?</a> </p>
<p>Because of the time frame. Infrastructure investors, especially pension funds, want to secure revenue streams 30 and 40 years in the future. Even youthful Justin Trudeau will have long retired when the private finance credit-card bill comes due.</p>
<p>Another reason for the popularity and success of the Ontario/B.C. model is that governments are happy to use big contractors who hire union labour. And hospitals and prisons built through private finance and private procurement are staffed by the same public sector union workers as older facilities. So opposition from labour and NDP opposition is muted.</p>
<p>Nonetheless, the infrastructure model used for the past decade, in which major infrastructure projects continue to be publicly owned and union labour is protected, is now in danger. </p>
<p>The federal government is making noises that it will fund the new “Infrastructure Bank” — which is not actually a bank but an infrastructure agency, to confuse Canadians even further — by <a href="https://www.spacing.ca/.../06/.../op-ed-does-canada-need-federal-infrastructure-agency/">selling off the few major assets that Ottawa owns</a>, mainly airports.</p>
<p>The Liberals’ Infrastructure Bank might not ever do much; its predecessor from the Stephen Harper era, Public-Private Partnerships Canada, hardly made a dent. </p>
<h2>It sounds virtuous – but isn’t</h2>
<p>But a very real danger lies in what insiders call “asset recycling,” an approach <a href="https://mowatcentre.ca/recycling-ontarios-assets/">heavily promoted by infrastructure guru Michael Fenn.</a> The term sounds vaguely ecological, but it means selling off choice public assets to raise funds for infrastructure capital costs, as Ontario did with 51 per cent of Hydro One. That selloff netted the province $9 billion.</p>
<p>The Ontario Ministry of Infrastructure’s 2017 update states that in addition to Infrastructure Ontario’s public-private projects, <a href="https://www.ontario.ca/page/buildon-2017-infrastructure-update">the province is also</a> “unlocking the value of existing assets …all net revenue gains from the sale of designated assets are to be credited… to support the province’s key infrastructure priorities.” </p>
<p>If you did this at home, you’d essentially be selling your backyard to pay for a new summer cottage. You can make it sound somewhat virtuous by calling it “asset recycling,” but that’s what it is.</p>
<p>And we won’t see governments selling off dilapidated public housing, which could actually use new investment. Instead, they’ll sell well-maintained, revenue-generating assets — those that would, if they remained in public hands, provide steady revenues into the future. </p>
<p>So the privatizations that Ontario’s neocon Mike Harris dreamed of in the 1990s? </p>
<p>They may be at long last be successfully implemented by a host of Liberals.</p><img src="https://counter.theconversation.com/content/81075/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mariana Valverde has received funding for research on infrastucture governance from the Social Sciences and Humanities Research Council of Canada. She is not associated with any of the organizations and businesses involved in the field.</span></em></p>Canadian governments aren’t completely selling off major public works, but their embrace of public-private “partnerships” is giving private financiers control of major infrastructure projects.Mariana Valverde, Urban law and governance, infrastructure researcher; professor of criminology, University of TorontoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/732292017-03-03T02:13:19Z2017-03-03T02:13:19ZCan the government save money by privatizing prisons, Medicare and other functions?<figure><img src="https://images.theconversation.com/files/158191/original/image-20170223-32714-1ddb5j4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A detention center in Eloy, Arizona. </span> <span class="attribution"><span class="source">AP Photo/Ricardo Arduengo</span></span></figcaption></figure><p>Should we run the government like a business?</p>
<p>Donald Trump seems to think so. During his campaign for president, Trump returned again and again to his supposed success as a businessman and promised government programs “under budget and ahead of schedule.” His hotel in Washington would be “a metaphor for what <a href="http://fortune.com/2016/10/27/donald-trump-hillary-clinton-business-management/">we can</a> accomplish for this country.” </p>
<p>The qualities Trump sees in himself are what he seems have been looking for in his Cabinet. His nominees for the State, Treasury and Commerce departments are successful businessmen with no previous government experience. Education Secretary Betsy DeVos and Transportation Secretary Elaine Chao are both heirs to business fortunes.</p>
<p>Trump is not alone in this approach. George W. Bush touted his <a href="http://content.time.com/time/nation/article/0,8599,331981,00.html">Harvard MBA</a>. Six decades ago, Dwight Eisenhower’s Cabinet was <a href="https://www.washingtonpost.com/posteverything/wp/2017/01/19/trump-rich-cabinet/?utm_term=.8ee1c2d80217">described</a> as “eight millionaires and a plumber.”</p>
<h2>Thatcher started the craze</h2>
<p>If appointing businesspeople to run government is a path to efficiency, as Trump believes, then privatizing governmental functions entirely should bring even greater budget savings and improvements in services.</p>
<p>Ever since Margaret Thatcher closed a budget gap, brought on by her promised tax cuts, with the <a href="https://www.amazon.com/Politics-Free-Markets-Neoliberal-Economic/dp/0226679020/ref=sr_1_1?ie=UTF8&qid=1487274828&sr=8-1&keywords=politics+of+free+markets+prasad">privatization</a> of British Telecom, governments in rich and poor countries have financed tax cuts, wars and ordinary expenditures through one-time sales of assets. Following Thatcher’s lead, these assets have been sold at below-market prices, leading to quick and dramatic gains in their stock prices and creating the illusion that the new private managers are more capable and efficient than their governmental predecessors. </p>
<p>I have <a href="http://www.emeraldinsight.com/doi/book/10.1108/S0198-8719%282014%2926">studied</a> how governments respond to economic and geopolitical decline and found that before Thatcher popularized privatization, the most common response during crises was to increase governmental power and control rather than cut taxes and government services. </p>
<p>Privatization creates new interests and divides authority, making it harder to develop and implement an overall strategy to rebuild a nation’s power and resources. </p>
<p>For example, President Bill Clinton <a href="https://books.google.com/books?id=CjepjGWNy7IC&pg=PA18&lpg=PA18&dq=clinton+privatization+nuclear+reprocessing&source=bl&ots=9QRZBYLwDV&sig=UDA9rnbsIteyzhsQi2oKEmPuBTY&hl=en&sa=X&ved=0ahUKEwiXwZ-W1pfSAhVjKMAKHQEvDhwQ6AEIVDAI#v=onepage&q=clinton%20privatization%20nuclear%20reprocessing&f=false">sold off</a> the federally owned and operated United States Enrichment Corporation, which was created to buy and reprocess plutonium from decommissioned Soviet nuclear weapons. The goal was to remove weapons-grade plutonium from the former Soviet Union, where it was vulnerable to theft or could be used in a new arms race. However, the privatized USEC halted purchases of plutonium whenever the price for nuclear fuel dropped because the new private owners prioritized profit over safeguarding and reducing plutonium stores. The government-owned USEC, which did not seek to make money, could place national security above private profit while a firm answerable to private investors had priorities other than their nation’s security.</p>
<p>Privatization often makes worse rather than solves the problems that the once-public agency was created to address. Indeed, because the exclusive focus of public agencies is problem-solving rather than profit-making, they are often more efficient. Costs per enrollee under the government Medicare program have risen <a href="https://www.americanprogress.org/issues/healthcare/reports/2009/02/19/5610/medicare-matters/">more slowly</a> since 1985 than they have for private insurers. Nevertheless the George W. Bush administration <a href="https://www.healthcare-now.org/blog/private-insurers-profit-by-ripping-off-medicare/">created incentives</a> for private insurers to enroll Medicare recipients. Those Medicare Advantage plans now charge the government <a href="http://www.usatoday.com/story/opinion/2014/04/02/medicare-advantage-obamacare-cuts-editorials-debates/7222695/">more</a> per recipient than the Medicare average. They reap high profit margins because the insurers <a href="http://www.motherjones.com/kevin-drum/2012/10/chart-day-cherry-picking-medicare-market">cherry-pick</a> relatively healthy seniors for their plans, or, in some cases, <a href="https://www.publicintegrity.org/2014/06/04/14840/why-medicare-advantage-costs-taxpayers-billions-more-it-should">overbill</a> the government.</p>
<h2>Trend is likely to grow</h2>
<p>We can expect more efforts to privatize government functions and facilities under Trump. </p>
<p>When he won the election, shares in corporations that run private prisons were the <a href="https://www.bloomberg.com/news/articles/2016-11-09/private-prison-stocks-are-surging-after-trump-s-win">biggest gainers</a> in the stock market. This reflects the expectation that he will increase the use of private prisons to hold those captured in immigration raids. In contrast, the Obama administration announced plans to <a href="http://www.pbs.org/newshour/rundown/obama-administration-end-use-private-prisons/">phase out</a> the use of private prisons for federal prisoners and to detain immigrants. </p>
<p>One reason for not using private prisons is their terrible record on safety. They are far more likely to <a href="https://theintercept.com/2016/12/17/inside-the-deadly-mississippi-riot-that-pushed-the-justice-department-to-rein-in-private-prisons/">endure riots</a> than public prisons, and have a higher rate of prisoner escapes and inmate assaults on guards and on fellow inmates than do <a href="http://www.corrections.com/news/article/30903-private-vs-public-facilities-is-it-cost-effective-and-safe-">public prisons</a>. Even as private prisons fail to meet the minimum requirements of preventing escapes and keeping prisoners alive, private firms <a href="https://www.aclu.org/banking-bondage-private-prisons-and-mass-incarceration">do not save</a> the federal or state governments money over the costs of safer public prisons. </p>
<p>How should we evaluate proposals to privatize government functions? </p>
<p>First, we shouldn’t assume that lower costs means more efficiency. It will be easy to develop a replacement for the Affordable Care Act that is cheaper. Just provide fewer benefits or make the insured pay more out of pocket or in premiums. That is not more efficient, but just a less comprehensive program. The government would save money, but patients get less while paying more.</p>
<p>Second, not everything can be reduced to a price. We often hear that cuts in military spending might result in less security. We should realize that cheaper prisons can be more dangerous. Less spending on education could yield less educated students. </p>
<p>Finally, we need to recognize that people who have spent their careers working in the private sector, where the single measure of success is the rate of profit, might not be capable of running an organization that measures success in terms of human well-being, public health or the beauty and sustainability of our environment. </p>
<p>Because government often must satisfy multiple constituencies and address complex and interlocking problems simultaneously, leaders must be capable of recognizing interactions that lead to unintended consequences. They also need to acknowledge honestly that meeting one goal or satisfying one constituency requires others to pay a price. Those skills can be learned in business, but usually not in enterprises devoted to speculation and quick returns. Skill in running public agencies most often is learned by working in government.</p><img src="https://counter.theconversation.com/content/73229/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Lachmann does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A scholar considers the limits of ‘running government like a business.’Richard Lachmann, Professor of Sociology, University at Albany, State University of New YorkLicensed as Creative Commons – attribution, no derivatives.