Will Donald Trump Screw Up V.A. Privatization? Probably.
Bad privatization is worse than no privatization at all.
As my colleague Peter Suderman has pointed out, Donald Trump's rumored privatization plan for the Veterans Affairs hospitals is not much of a plan at all. It seems like some Trump official, somewhere, speaking anonymously said the words system, vets, choose, and private in close proximity and that's really all we know.
But let's assume some kind of privatization plan is, in fact, afoot. Is that good news?
While there's a chance that the right people will be at the helm to craft this plan (I know some smart guys, if anyone's interested) and a robust and carefully considered privatization scheme could be enacted, based on what we know about Trump so far it seems far more likely that we'll wind up with something that looks like a giveaway to private business without the corresponding market mechanisms that are necessary for such a reform effort to show results. At the heart of the idea of privatization is the idea that when providers fail to actually deliver products or services as promised, they no longer get paid. Contracts must be canceled for legitimate (non-political) reasons, and companies must be allowed to fail for privatization to succeed. The V.A. hospitals' immunity to competition and veterans' inability to seek care elsewhere were two of the biggest reasons waiting lists got as long as they did.
True privatization is tricky to do correctly—though not impossible! As the Reason Foundation attests, it happens all the time in the real world on the state and local level in particular. But if the Carrier deal is at all instructive about how the Trump administration is going handle relations between the state and the private sector, some bullying of major market players combined with watered down cronyism and politically expedient favoritism looks like the most likely outcome. Which means that veterans may indeed wind up getting even worse care that the deeply troubled V.A. was providing. What's more, a messy half-assed reform effort with the word privatization slapped on the package will give future efforts at thoroughgoing privatization a bad name.
Those of us who are keen on privatization should take a moment to feel deep empathy for those on the other side of the political spectrum. I can only imagine the anticipatory agony of envisioning Trump-administered faux privatization is similar to what advocates of single-payer health care must have felt as they watched the Affordable Care Act take shape. The might-have-beens are cruel indeed.
I was on Kennedy talking about this very topic yesterday. Check it out: