If UPS and Fed Ex can compete against the US Postal Service

[Hello_Kitty]

Then why can't private health insurers compete against a public plan?

[armyowalgreens]

1. SOCIALISM IS EEEEEEEVIL!!!!!

[ddiver]

2. They do not have the same unions and rules.

[Hello_Kitty]

3. And neither will the public plan and the private companies

So what? Why do the insurance companies deserve to be protected from competition?

[NYC_SKP]

4. UPS is union. FedEx is non-union. Try another. nt

[ddiver]

6. You have proved my point. They don't have the same union.

[Hello_Kitty]

8. I still don't understand your point. They are competitive with each other.

The USPS isn't depriving UPS and FedEx of the ability to do business because it's the "public" option.

[NYC_SKP]

5. They can. I love this analogy.

I've been looking for one, thanks!

[OmahaBlueDog]

7. In many states, there is a state-backed and a private option for Workers Compensation

Take Oregon.

SAIF (State Accident Insurance Fund) is a private corporation that is 100% owned by the State of Oregon.

Private carriers, such as Liberty Northwest, also compete in the marketplace.

[anigbrowl]

9. Actually, they can't

Well, of course they compete on parcel delivery and so on - I much prefer the USPS myself even for that, but that's beside the point, which is that that the post office has a constitutional (not just legal) monopoly on the delivery of mail. UPS and Fedex basically exist at the whim of the postal service. http://en.wikipedia.org/wiki/United_States_Postal_Service#Universal_Service_Obligation_and_monopoly_status

I add this for completeness rather than contradiction. It is worth considering, though, that parcel delivery is basically dominated by 2 big companies plus the post office (there's also DHL, but they've pretty much admitted they've been unable to crack the US market for now). Insurers are worried that if healthcare and insurance becomes a federal rather than a state affair, many of them will go to the wall - not necessarily destroyed by the government (private insurance coexists more or less comfortably with public services in many European countries) but eaten up by their competitors.

They're all regulated by state insurance commissioners right now, and the sad fact is that many of these companies have cozy relationships with their regulators. If the whole market becomes regulated at the federal level, it'll be open commercial warfare. This is not necessarily a bad thing for consumers, but not necessarily a good thing either - besides the examples of Fedex and UPS, you might also consider the phone/cellphone market, which has narrowed down to a few big players but doesn't necessarily give consumers the best deals.

[northzax]

13. I wouldn't go that far

Both UPS and FedEx are technically parcel delivery companies, and do not compete with USPS directly on the core business of the post office (receiving, processing and delivering mail to residential addresses) they compete on the high margin speciality side of the business (packages and express) they do not, and have no desire to, compete on delivering a post card from any place in the US to any other place, no matter how remote, in a couple days for a flat fee of under $.40.

[anigbrowl]

20. Well, sort of

anything from anywhere to anywhere for $0.40, sure. But there's probably lots of money to be made shuttling mail between big urban centers, especially for corporate customers where you'd have steady volumes. But this is only an interesting digression from the main part of the thread. The history of postal mail (in many countries) is rather fascinating to me.

[northzax]

21. it's actually quite relevant

the fact is, private companies cannot compete with the economies of scale the government offers, except on speciality services. There are places FedEx won't deliver at all, but the USPS is there every day, even if there is only one letter to pick up. USPS also uses fully flat rate pricing domestically, the service costs the same whether you are sending something to your next door neighbor or Nome. That's absolutely remarkable.

so how does this apply to health care? well, private companies can provide supplemental care to a government plan (better tests, faster service) for a seriously inflated price. They cannot, and will not, compete with basic care and coverage, because the margins are too low and they cannot produce the scale needed. plus, the government will offer the same services and coverage to everyone, no matter their location or condition, just as USPS does, while, like FedEx and UPS, private companies will provide better service to those willing to pay more. If it's anything like the postal service, up to six times more (you can mail a flat envelope from DC to LA via USPS, it will get there in 3 days most of the time, for $4. that same envelope, taking two days, will cost you $20 or so with FedEx. one day faster, 5 times more expensive. and if you're sick, or live in rural Oklahoma, the private companies won't even provide service to you, for any price, because they can't make money on it. the Government service does.

[eridani]

14. Private health insurance works in Europe because it is either non-profit

--or sells extras only.

[csziggy]

10. Some International US Post Office mail is now delivered by FedEx

Tuesday, June 8, 2004
Release No. 40
www.usps.com

FEDEX TO DELIVER PREMIUM POSTAL INT'L SERVICE
June 8, 2004

WASHINGTON, D.C. - The U.S. Postal Service has selected FedEx Express to provide transportation and delivery for Global Express Guaranteed (GXG), the Postal Service's premier, date-certain international delivery service to more than 190 countries.

"This alliance brings two shipping powerhouses together to deliver the world to our customers," said Anita Bizzotto, Chief Marketing Officer. "It will enhance GXG's world-class service reliability, streamline handling, and bring the resources of both organizations to provide quality and value for postal customers."

This alliance also provides new service to Japan and Brazil and offers new GXG shipping labels and containers that feature both Postal Service and FedEx logos. About 7,400 Postal Service locations will offer the new co-branded service. As demand for this product grows, so will the number of Postal Service access points.

The contract with FedEx takes effect on July 1, replacing a previous agreement with DHL Worldwide Express. "We evaluated a number of international delivery providers and the review showed that FedEx offers the best combination of price, service, brand recognition and cost/network efficiencies," said Bizzotto. FedEx Express is a subsidiary of FedEx Corporation (NYSE: FDX).
http://www.usps.com/communications/news/press/2004/pr04_040.htm

[hfojvt]

11. not to mention Amazon and other bookstores (like mine)

competing against all the public, university and school libraries (and book sales, etc.)

[krispos42]

12. Actually, the Post Office has some serious advantages...

non-profit status, untaxed government property, and really modest executive salaries.


It does well because most of what they do is a mature, routine service. Their "express" services aren't as fast as the private competition, and I think the private companies pioneered things like real-time internet tracking and such. These are all things that private innovation developed. "Fedex" is now used as a verb because they're so good at it. But since there are some things that the USPS can't handle due to size or content, there is lots of room for other companies.



Private insurers can't compete because they are a very mature, routine service. What they deal is in money, which is fungible. All they do is collect cash and make payments. They can streamline the disbursement of payments, for example; however speed is not usually an issue with that. It takes days or weeks to get the money; more if there's some kind of problem. It's basic accounting; they were doing it in Ancient Sumer 4,500 years ago with clay tablets and abacuses.

Private insurers are very innovative in figuring out how NOT to pay, but I don't think they can innovate new ways to insure people. That is where the innovation goes, new investment vehicles to put collected money in, and new ways to "reduce outlays".

And with USP, with EVERYBODY in the risk pool from conception to death, you can't play off one insurance company's risk pool off on another to find a better rate.

[and-justice-for-all]

15. Why do you hate Amerikastan??? WHY??

:sarcasm:

[eridani]

16. How about private life insurance competing with Social Security survivors' benefits?

They do just fine because they add value. They are not in the business of denying benefits to poor kids. They only provide extra income over and above what the kids get from survivors' benefits.

[Vinca]

17. And to those who ask if you want your health care run like the post office,

I say "sure." It amazes me that for 44 cents I can mail a letter in New Hampshire today and have it in California by Monday, no special handling. Sometimes I get priority stuff delivered overnight. Yes . . . I want postal quality health care.

[Pacifist Patriot]

19. For everything that gets said about post offices...

The people who staff my local post office are incredible. They are knowledgable, helpful, and funny.

I cannot remember the last time something got "lost in the mail." If I want something there overnight, I have that option. I can opt for the basics or all the trimmings. The prices are a hell of a lot higher than they were twenty years ago, but not crushing.

Getting to one of my weak analogies below, would I want my health care run like my local library instead of a bookstore?

CAVEAT: I am not talking about the difference between buying and borrowing, I am comparing levels of service. I also acknowledge I have access to a kick ass library system.

The staff in my library system have always been far more knowledgable than the employees at the bookstores. My library system has CDs/DVDs released on Tuesday on the shelves by Wednesday. New release books on the shelves the day they are published. If they don't have something I want they find it, transfer it and I don't pay extra for that service. They have community classes, support groups, art shows, political forums, regular schedule of children's activities and other programming. Sure I have to wait for high demand items at times, but never for unreasonable lengths of time. Except for the lack of a coffee shop, I have a far better experience with the library than in a bookstore primarily because of the value for my money. I'd gladly increase my taxes to support the library even more. (Sort of do that with an annual membership to the Friends of the Library and my book donations.)

Would I be comfortable with library quality health care? If it's anything like my library system here? Hell yeah!

[Retrograde]

23. I have some issues with the local PO, but on the whole

they do a pretty good job. I ship books via USPS regularly, and they always seem to get where they're supposed to go promptly. I joke about the "magic mailbox" on the corner that seems to have a direct pipeline to Netflix.

My gripes? The scale at the local office is broken about half the time, the clerks always try to sell me on extra services even when I tell them I just want to send a package media rate, and they keep a collection of people hidden away somewhere in the building so they can put them all in line ahead of me :) And their new architecture standards result in cookie-cutter post offices, not like the grand old PO buildings.

[Pacifist Patriot]

18. Not such great analogies, but....

bookstores also compete against libraries
private schools compete against public schools (all levels)

No analogy is perfect, but there is certainly a precedent for public options in a number of areas. Why not health care?

[DatManFromNawlins]

22. Dumb comparison.

People do not use the post office, Fed Ex, or UPS exclusively. They use a combination of the three.

[slampoet]

24. Much like people get supplimental insurance for their VA or Medicare benefits.

The metaphor still stands.

[Hello_Kitty]

25. For casual mailers, yes. But not if you send a lot of bulk mail or own a business.

The company I work for has an exclusive account with UPS (edit to clarify for parcels). Other companies use FedEx and others use USPS. The majority of parcel mail that is sent in this country is business mail.