If you’ll forgive the imagery, it’s somewhat amusing to see Cactus Kate impaled upon a contradiction.
Last week she came out against monopolies, declaring, “I am not a fan of anything to do with monopolies.” Yet at the same time she’s a fan of LabTests, which has been granted a government-maintained monopoly in diagnostic medical work in the Auckland region.
Why the contradiction? That’s easy. Because in her rant against monopolies last week she failed to distinguish between between a coercive monopoly, which achieves its market position by reason of a government grant and government protection, and the other sort – the company that achieves and maintains its position of market dominance by producing things its customers want to buy at a price they want to pay. (Given my public-spirited attitudes, I felt obliged to point this out.)
The problems with LabTests (whether real or otherwise) are the problems of government monopoly. Full stop. Specifically, they’re what happens when the District Health Board, which is a coercive monopoly, changes contracts from one crony capitalist monopsony supplier for another. No-one other than a government department (or its second cousin, a coercive monopoly) would change suppliers the way the Auckland District Health Board has done—bringing down the guillotine on your single supplier of one essential service on the same day the other is supposed to pick it up as if nothing has changed. And no problems in a genuine private business would be reported as they have been in this heavily politicised pseudo-market.
The problems now being reported were made inevitable by the crony-phony monopoly model of the government’s health ‘system’ – and they’re reported as they are because the whole health process is politicised.
Why would anyone be surprised?
Or just maybe, Annie, you understand them way better than most of the noisier commentators. And if I’d seen your point earlier, it might have saved me writing many more words to say half as much.
UPDATE 2: Cactus demonstrates this morning that she still doesn’t have a frigging clue. “I don't care about the arguments for or against the change in provider in a one-provider system,” she whimpers while heading off on another braindead chant of ‘LabTests good! MedLabs bad!’ – ignoring all the while that the problems with both of them are caused by the very thing she doesn’t care about and refuses to acknowledge! What a mess.
24 comments:
I thought it went to tender? How else could this service work anyway. Who would want to invest anything in setting up? No provider interest would be an interesting scenario.
Changing a supplier is creating a new monopoly?
Here it is in a nutshell: The District Health Board is effectively a coercive monopoly.
And the 'market' over which it presides is a monopsony market, i.e., "a market form in which only one buyer faces many sellers."
The latter is the direct result of the former. And the resultant bungling (if true) is therefore far from unsurprising.
"And the resultant bungling (if true) is therefore far from unsurprising.".
I fail to see the causal link.
Any change of supplier, especially for that scale, will have problems with the transition.
While not ideal, it is unsurprising
"Any change of supplier, especially for that scale, will have problems with the transition.
While not ideal, it is unsurprising.."
Precisely. But who, other than a govt department or an imbecile (not to repeat myself), would change on that scale and in the peremptory fashion that this change was un-orchestrated.
Even if the system was was a privatised one.
There would be bugs to iron out in any change of laboratory services.
I say again, who, other than a govt department or an organisation managed by an imbecile (not to repeat myself), would change on that scale and in the peremptory fashion that this change was un-orchestrated.
Without a phase-in, without the continuation of competition between providers -- just a guillotine whereby one day one provider is delivering a multi-million dollar service, and next say someone else is - or trying to -- from a standing start.
Just dumb.
You don't have a contractural law firm interest on the side do you?
You don't have a name? ;^)
Anything that involves a bureaucratised government monopoly of any description, at any level, for any purpose is BY DEFINITION inefficient and incapable of achieving appropriate value for money. The larger you make these monstrosities (in order to gain 'economies of scale') the larger you actually make the problem.
You only have to witness one DHB meeting to become utterly convinced that these things must be abolished first and foremost before any solution of the healthcare problems becomes even possible.
Oh for fuck's sake PC, it is what it is - crap and always has been.
DML is using their position previously gained to now interfere in a new contract. Analyse that.
So is it the coercive former monopsony? Or a former coercive monopsony? Go on, give it a title, dream up another.
Sure in the ideal world there would be 10 providers for blood testing all competing in a free market. But that was the initial problem. DML was the only provider allowed in the market.
I am a fan of Labtests? Ergh how? Have I joined a Facebook group or something? Got a badge? Wearing a t-shirt?
I was am still not a fan of DML as I have used their service and it sucked. That's how I got interested in reading about their behaviour. Which has got worse to the point where it is now deplorable.
Oh for fuck's sake, Cactus, wasn't there a time when you could read?
"Sure in the ideal world there would be 10 providers for blood testing all competing in a free market. But that was the initial problem. DML was the only provider allowed in the market."
Read your own last word again: "... DML was the only provider allowed in the market.
That's right. It's part of a coercive monopoly.
Analyse that.
Just as LabTests is enjoying the benefits (and the hazards) of being part of that same coercive monopoly now.
Analyse that.
Neither DML nor LabTests acquired their monopoly position by virtue of proven superiority in the market place, but by promised superiority in a coercive monopoly.
Analyse that, and you might understand why these PPP models never work as well as people would like them to.
Fact is, as I said last week: Coercive monopolies are bad for your health.
Analyse that, for fuck's sake, because as a lawyer you should know that words have meaning: A coercive monopoly means what it says. Add the phrase to your repertoire when you're talking about monopoly.
"I am a fan of Labtests? Ergh how? Have I joined a Facebook group or something? Got a badge? Wearing a t-shirt? "
Bejeezus, you really don't read what you write, do you. If you follow the link I provided on my post above and scroll down, you say: "Because I'm fronting the real issues for nicks*, because unlike Bomber, I actually believe in them [LabTests}. And have worked out on my lonesome that Labtests are where it is at."
Hey, dude, where it's at. Analyse that, funky cat.
Goodness gracious Cactus, you're all over the place with inconsistency. What a mess. Oh well, at least your spanking was administered with good humour. It was well deserved, this one.
LGM
A valuable business tool for companies to use to determine, among other things, whether to enter a particular market (as relevant to this situation) can be found here:
http://en.wikipedia.org/wiki/Porter_five_forces_analysis
Michael Porter.
Consider the effect of this coercive monopoly on the significant forces.
http://en.wikipedia.org/wiki/Porter_five_forces_analysis
Gah.
Look the real facts are:
* NZ simply cannot afford to provide quality health-care. The economy will not longer support it (if it ever did).
* Any socialist health system will be overwhelmed eventually
* Combine that with NZ's failing economy and the result is a need to continually reduce service levels - which is what we see.
It's nothing to do with the *model* of competitive vs monopolistic provision; and nothing to do with the issue of monopoly vs private care (because there are no *legal* impediments to private care in NZ). And only people who don't care about their family's health don't have private health insurance
This is simply a consequence of NZ's declining productivity and reaping the rewards of 50 years of corrosive socialism.
The solution is simple:
* admit that NZ cannot provide even blood testing, or any other health care
* cancel all "pubic sector" "Free" health services overnight.
and that's basically it. Those who are productive will be able to arrange their own health care. Those who are not will get what they deserve.
The most basic economics is after all that 1+1 = 2.
NZ simply does not have the money - i.e. the economy - to provide "Free" health care - to anybody.
I am interested in the analysis that says that the monopsonistic market is a direct result of the DHB.
In Hamilton they have used two companies - DML and Labtests - who are privately competitive firms. This system has worked well and is based on competition. The contracts are tendered and many aspects are considered when the decision is made.
In Auckland only one private profit-seeking company was used (DML). Then this company lost a tender to a private profit-seeking competitor who made a better bid.
This sounds like a competitive market to me.
In many situations monopolies are able to provide services cheaper than a number of smaller firms can. It just so happens that this is what occurs in this particular industry. The most efficient enterprise is a monopoly and this is the way it naturally tends.
I'm baffled at the massive defence of Labtests? They don't get the results out to doctors/patients (eight days tomorrow and I still don't have my results). Please explain how DML is responsible for this?
Yep Labtests is shithouse...had bloods taken the other week and they disappeared into the ether.
Nice smackdown of Cactus there PC....her pudgy ares got served big time.
"In Hamilton they have used two companies - DML and Labtests - who are privately competitive firms. This system has worked well and is based on competition."
So in spite of all the links, this guy/gal STILL hasn't read up on monopsony...
"In many situations monopolies are able to provide services cheaper than a number of smaller firms can."
Or coersive monopolies...
Re Update 2: It reminds me of the ill-conceived Mark Weldon jihad.
Bloggers seem to be getting more and more obsessive -- when errors are pointed out, instead of reviewing their positions they just hitch up their pants and stride further into abject nonsense.
In the midst of all this ruckus I can only offer my own experience at the local LabTests clinic last Wednesday morning.
In, seen to and out within ten minutes. All staff including reception & phlebotomist polite, friendly and efficient .. just as the DML staff and service always was, so no axe to grind there. I did notice that the furniture had been spruced up by the new lot, though.
Rang GP this morning to find results had arrived. I have no problem with that timeframe -- I always allowed at least four working days in the past, too.
I don't doubt that others have experienced problems and how cheesed off they must be & rightly so, but that's my 5c worth.
Dearest PC and the Libertarianz Glee Club....
This is not a very good argument we are having because we agree but are simply talking about two different matters.
As with any Libertarianz member you are all thinking ahead to an ideal world where things can be done "properly" and as we like it done. ie. no coercive monopoly, no tax, no laws, no rules, no regulation, that people are all sane and make rational decisions.
As with any pragmatist I am focusing on what is happening now and the imnmediate term and how to fix things as they are.
You, the Libertarianz will remain therefore always ahead of your time. And a membership of 12.
I am disappointed PC got through all that rant without mentioning Von Mises, Von Trapp or Maurice Trapp.
And yes Ruth, obsessive. Like your endless comments on the subject....
When good, high achieving people are smeared I do tend to support them Cactus Kate.
Anyway you have failed - Seccom will remain a paper tiger in the medium term at least due to the efforts of a few freedom loving people who work behind the scenes.
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