Forty years of gaming the system

If DOGE, President Musk’s not-really-a-government-agency charged with cutting spending by eliminating waste, were serious, the costly, ongoing privatization of Medicare would almost surely be its highest priority target.

First things first. Many people believe that the private sector is more efficient than the public sector, and few now want the government to, say, operate factories. But the key driver of efficiency in such cases is competition, not private ownership per se.

It’s much less clear why you would want to privatize when competition isn’t practical, for example where there are natural monopolies — e.g. electricity and water supply. I guess private companies might be more ruthless in controlling costs than government agencies, for example by being willing to fire underperforming employees. But such efficiencies, if they exist, are often outweighed by asset stripping and degradation of service.