Monday, November 12, 2012

Health Care and Basic Education

Almost twenty years ago, a paper appeared in the journal Public Choice that cites the inevitable challenges of providing services such as health care and basic  education:
There are indeed striking characteristics that both health care and basic education share. For one, universal education, and child and maternal health care are among the Millennium Goals of the United Nations. Second, as pointed out by Baumol's article, these services are quite distinct from other human enterprises, such as building automobiles. Production lines designed to perform precisely each step in making cars can be made. There is room for custom-made automobiles, but for the purposes of general production, uniform lines can surely take advantage of advances in technology to lower costs of production and increase efficiency. Health care and education do not quite easily lend to these innovations. Each patient requires individualized attention and whether this is accepted or not, education is more about learning than teaching, making basic education as personal as health care. Both basic education and health care have a strong influence on a society's well-being. For these services to benefit society, these must be of high quality. A health care program or a public school that is failing can even do harm to society.

There are differences between health care and education. With regard to evidence-based research, health care is miles ahead of education. Reforms in education continue to be implemented without supporting data and studies remain poorly designed, without proper controls. On the other hand, the practice of medicine has been faithful to clinical trials and data. Health care, however, does not do well in terms of equal access. A public option, for example, in the richest country in the world, the United States, does not exist. But public schools still do.

The question that Baumol asks in the article is: Should these services remain in the public sector or should they be privatized? Current situations perhaps can answer this question. Health care is privatized in so many places. Excellent health care is available, but surely, not for everyone. Similarly, there are excellent schools that are both private and exclusive. These schools are, of course, not for every child. Privatization always tends to provide excellence first before access. Thus, there is that tempting conclusion that if quality is desired, one should privatize. To take the other option, that is, to continue with the public sector or government to provide or run these services, is then equated to low quality and inefficiency. Finland shows clearly that this is not the case. There are no private schools in Finland. Finland emphasizes equality and yet, Finland is in the top in terms of quality basic education. Excellence therefore can come with equality. When basic education is not seen as a vehicle to get ahead in life, better learning outcomes are achieved. Providing health care and basic education, without doubt, are different from making automobiles. The health and education of the members of the society are comparable to security, peace and order. I do not think societies have ever explored on a large scale the privatization of its police force or firefighters. I wonder why....

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