Privatized Disaster at Walter Reed

I've never understood the logic behind privatization. You look at two organizations -- one that has to turn a profit and one that doesn't -- and argue that the for-profit enterprise can not only do things cheaper, but more efficiently. This despite the fact that one obviously requires more money changing hands. If the Bush administration has proven one thing, it's that this idea isn't just counterintuitive, it's baloney. We have, to a large extent, privatized rebuilding Iraq and we all know how well that's going -- we flew pallets of cash into the country, literally 363 tons of hundred dollar bills -- only to watch it evaporate. One of the biggest contractors in Iraq, Bechtel, did as lousy a job in that country as it did in Boston's 'Big Dig'. Privatization doesn't mean increased efficiency, it means cut corners, corruption, and turning the government into an ATM for corporations.

Take a look at an institution that's been private since the gitgo -- healthcare. A recent CBS News/NYT poll shows that americans not only think Universal Health coverage is a good idea, but that they're extremely unhappy with the system the genius of the free market has built. Apparently, a system built by private industry sucks in the extreme.

So it shouldn't surprise us any that the problems experienced by patients at Walter Reed Army Medical may be the result of privatization.

Raw Story:

The Bush Administration's drive for privatization may be responsible for the "deplorable" outpatient care for soldiers at Walter Reed Army Medical Center, according to a top Democratic Congressman investigating the scandal, which has already led to the resignation of the Secretary of the US Army.

A five-year, $120 million contract awarded to a firm run by a former executive from Halliburton – a multi-national corporation where Vice President Dick Cheney once served as CEO – will be probed at a Subcommittee on National Security and Foreign Affairs hearing scheduled for Monday.

The company is IAP Worldwide Services, which has a history of suckage. IAP failed to deliver ice to survivors of hurricane Katrina. According to Subcommittee on National Security and Foreign Affairs Chair Henry Waxman, IAP "is led by Al Neffgen, a former senior Halliburton official who testified before our Committee in July 2004 in defense of Halliburton's exorbitant charges for fuel delivery and troop support in Iraq." According to ABC News, IAP was given a contract at Walter Reed despite the fact that the military had determined that federal employees could do the job better and cheaper.

In 2004, the Army determined that Walter Reed's federal employees could operate the medical center more efficiently than IAP Worldwide Services, which is operated by the former Halliburton executive, Al Neffgen, [says Henry Waxman]. After IAP protested, the Army "unilaterally" increased the employees' estimated costs by $7 million, making IAP appear cheaper, Waxman said. Rules barred Walter Reed employees from appealing the decision, Waxman wrote, and in January 2006 the Army gave the contract to IAP.

So, IAP -- which had to generate profits -- was given a job that the federal government -- which doesn't -- could've done. The lesson here is that privatization doesn't improve services, it makes them worse. A company who's entire motivation is profit will do the absolute minimum, in order to increase those profits. This isn't 'efficiency,' this is doing as little as possible to get a fat check.

The Pentagon, rather than admit that this whole privatization thing is a washout, is trying to block testimony by the former chief of Walter Reed, Maj. Gen. George Weightman. As a result, Henry Waxman has issued his subcommittee's first subpoena to compel testimony.

Like I say, the logic (such as it is) behind privatization doesn't add up. It seems to be based more on faith and ideology than on reasoning and history. Where government gives up services to private industry, scandal, corruption, and substandard service provision follows. Bush and his fellow free market moonies have proven that privatization is a disaster and there's no reason to continue their experiment.