Should we drive or fly our brooms? Unless we live in the fictional world of Harry Potter this question makes no sense because it is based on a premise which is not true—flying brooms do not exist.

The same fundamental, although often ignored premise is at the root of the debate regarding the federal government’s attempt to remake the 1/6^th of the U.S. economy that is the health care industry. Rather than beginning the debate on SHOULD and HOW the government can do this, we need to start at the more fundamental question of CAN this thing we call government actually do this. Whether it should, and how it should is a meaningless discussion if in reality it can’t.

As a management consultant who has directed many business re-organizations, the first step in this process is to start with a completely blank slate and analyze the situation with absolutely no preconceived notions. We simply follow where the facts point us. I know this will shock many but reality doesn’t necessarily conform to our individual political biases. Every single issue does not fit into the present political cookie cutter of either Democrat or Republican. So let’s ignore the politics on either side and simply follow the facts on the health care debate and see where it leads.

First let us better define this thing we call government. Although far too many politicians on both sides of the aisle act as though it is a real, physical thing… government is, in effect, an artificial entity just like a modern corporation. A much more accurate description of government is that it is a large, politically controlled non-profit corporation. Unlike other non-profits, this one has the power to fund itself by forcibly taking money, and even freedom, from those who fall within its range of power. This non-profit can also force individuals to behave in certain ways, again with the threat of financial and loss of freedom penalties. And finally this non-profit can actually force individuals to fight for the survival of the non-profit. 

I say none of these things in a pejorative manner. It’s simply an observation of fact. Please note that at a high-level, these are not moral issues, i.e. whether it is good or bad that government does this or that, simply that this non-profit has these powers at its disposal. When analyzed from this factual, unbiased perspective, this large non-profit has rather frightening powers… regardless of your political leanings. Does it make sense to turn over the health care of 300 million individuals to this non-profit? It may or may not so let’s dig a little deeper and look at other things this non-profit runs to ascertain its past operating performance.

Let us start with the tax code, those rules and regulations which direct every working person and business entity (both for- and non-profit) in the entire country. Think about this from a management consultant’s viewpoint… what are some basic features which would be foremost in designing this system? If basically every single adult and business entity must do this on at least an annual basis, shouldn’t the topmost items be keeping it simple and easy to understand? Of course fairness ranks up there too, but that is a subjective manner where people can have vastly different opinions. But if this non-profit is going to demand—not ask but demand—that almost every single person and business entity follow these rules and procedures, wouldn’t it be a hard requirement to keep it simple and easy to understand? It would be in a for-profit world. The Cato Institute reports that the tax code for our federal non-profit corporation has grown from zero pages to over 70,000 pages in less than 100 years… up 50% in just the past decade. It costs individuals $300 billion in annual compliance costs with over 60% of all persons filing seeking professional assistance to help them meet the demands of the non-profit and almost all business entities of any size use professional assistance. Even the IRS estimates that the total time spent on annual compliance would equal 3.8 million full-time workers. I think we can safely say that the non-profit’s record for taxing is no cause for confidence regarding its takeover of the individual’s health care.

How about other large programs run by this non-profit? Social security, our non-profit’s national pension plan, will be bankrupt in 2037 under the latest estimates… that’s in 28 years. The Social Security Administration reports that just under 57 million individuals receive social security benefits of some kind. That’s out of a total population of around 300 million, and this pension plan which provides benefits to almost 20% of the population is going to be broke in 28 years. This disaster was baked in the cake by the very design of social security. In effect, it is a huge ponzi scheme which only “works” with an ever growing population base. Again this is not stated in a pejorative fashion, just a statement of fact. Not a great sign.

Medicare is the non-profit’s health care plan for older citizens. This would seem to be a good tool to measure the performance of the non-profit in this area since Medicare is a national health insurance program, the largest health insurance program in the U.S. It began operations in 1966, just 43 years ago. The non-profit’s official Medicare web site has as its motto, “Improving the health, safety, and well being of America.” A lovely motto for a service which is forecast to be bankrupt in 2017… 8 years from now… for a program which provides health insurance to 1 in 7 Americans. From birth to bankruptcy in 51 years. Again not a very good sign. 

From at least these three significant examples it would seem to be an unwise decision, to say the least, to turn over the 300 million citizen’s health care system to this non-profit corporation. But let’s dig in even deeper to see what other insights we can glean in this analysis.

How about the people who run this non-profit? How do they fit into this system? There are two general classifications of non-profit employees, elected and career. For those elected, is there some mechanism in the process of running for office and getting elected which sorts for the best? The brightest? Those with the most wisdom? Sadly, any remotely unbiased analysis of elected officials clearly demonstrates the process of being elected only sorts out those who have the strong desire to become elected. By simple observation, one can state with certainty that our elected officials are no wiser, more intelligent, or better in any way than the average citizen. This point cannot be overemphasized.

Think of hiring someone to re-organize 18% of the U.S. economy, around $2.4 trillion annually… what credentials would you look for? What prior experience? I would hazard a guess that a resume with someone with Barack Obama’s work and educational experience would quickly end up in the trash can. He wouldn’t make the first cut in the hiring process. This isn’t a partisan opinion. If one were honest you’d have to say the same about pretty much any past president or politician of any party for that matter. In fact I doubt if there is a person on the planet who is qualified and has the ability to re-organize a system of this complexity. Even the top 2,000 “specialists” do not have the skills and knowledge to do so.

And what about those career employees of this non-profit? Again, is there some sorting mechanism which somehow concentrates the best and brightest within their employment? I know a little about this non-profit’s hiring practices and I see absolute nothing which would do so. Not to be derogatory, but it is well known that in many cases the most driven—those with the most skills—do not seek employment with this non-profit but instead search for work elsewhere. The sad reality is this non-profit’s employees skew somewhat to the less qualified and less driven. To make matters worse, toss in the fact that in many of this non-profit’s departments, seniority rather than performance is what determines advancement. Whatever one’s feelings regarding seniority, it most certainly has nothing to do with selecting the best performers. Again, just a statistical reality.

So on a very cursory analysis of the employees of this non-profit, nothing would indicate a special ability or knowledge to design and operate any business system of any type. And our brief review of the tax system, social security, and Medicare, sadly supports this conclusion. If you want more proof, just go to your local department of motor vehicles and see what you think… and this supports the conclusion that whether these non-profits are national or state or local in design, the same problems plague them all. Viewing them simply as an organizational entity they simply are not designed for, nor are able to effectively analyze, design, and run business processes. This is not a political statement, just the result of simple business analysis. 

Another area which needs to be analyzed prior to jumping into the should and how this non-profit can redesign the nation’s health care system is the entire issue of what are the problems today and why do they exist.

One area is portability, i.e. for most people their health care is provided by their employer. This problem can be laid directly at the feet of this very same non-profit. This situation exists as an unintended consequence of the non-profit’s actions over 60 years ago. It is also rather easily fixed by similar action by this non-profit.

Another is coverage. Many gay and lesbian couples complain that their partners aren’t covered… again an unintended consequence of actions many years ago. Who would have thought that wage and price controls in World War II would lead to employer provided health care which would in turn become a major issue driving gay marriage?! This should serve as a strong warning on the long-term unintended consequences of using this non-profit for all but the most basic of reasons.

Price is also an issue. Again much of this can be laid at the feet of these non-profits. Health insurance already is heavily controlled by non-profits. Insurance providers can’t cross state lines… why? The non-profit decrees it. The non-profit forces insurance providers to offer services which the marketplace might not support and any specific individual may not desire. And of course the situation has evolved into one where the user of the service is only remotely tied to payment for the services. As many economists have pointed out, if on your next trip to the grocery store (or clothing or automobile or almost anything) you only had to pay for 20% of what you purchased, would your choices be the same as when you are paying for 100% of your purchases? Of course not.

Therefore, many of the problems which presently plague the health care system are tied either directly or indirectly to the non-profit. This would tend to point one in a direction away from further non-profit participation, not towards more.

Another area which needs to be better defined prior to even discussing this non-profit controlling health care is that of individual freedom and group responsibility. Although many often speak of the “nation’s” health care, in reality we are talking about individuals, not abstract groups. Once we enter the murky world of “our” health care where does it stop? How many of our life choices do we want to abdicate to this political non-profit? This area requires extensive discussion prior to any consideration of reordering the health care system. Think of all your neighbors within a one mile radius. Would you turn over decisions on how you should live your life to them? 

Weight, exercise (both too little and too much), diet, sexual activities (why should “we” pay for your unprotected sex?), alcohol consumption, drug use, dangerous activities (why should “we” pay for your broken leg from skiing? You voluntarily did this and knew it was dangerous), to not so dangerous activities (why did you let your child play on that swing set? Why should “we” pay for your foolish choices?), children (why should “we” pay for you to have 5 kids? Why should “we” spend millions to save your premature infant when only a few years ago it would have died anyhow), to special needs (why should “we” pay for your Down Syndrome baby? You knew and should have “taken care” of it). Perhaps when the political tides swing another direction abortion will become truly outlawed via health care. These are not extreme examples; this is what will face us once we accept the premise of “our” health care. These are far from easy questions and to focus the mind, don’t think of telling others how to live, think of them telling you how to live. 

And don’t forget the nature of these non-profits… remember they are politically controlled. Therefore, one can assume with 100% certainty that the other side—whoever that may be—will one day also be in control. So don’t think of choosing which types of control by “us” is acceptable, that is a poor analysis. Instead think about the entire issue of “our” health care and what it means. If you accept that premise then you must freely accept whatever group control is foisted on you, whether you like it or not. 

I for one readily admit I don’t have the wisdom to make such profound decisions for other people. As we have already shown, there is nothing in the election process or civil servant hiring/promotion process which would indicate either group has the required wisdom for these choices either. This is not a slippery slope issue; it is more of a fall off a cliff… your present position just depends on where you happen to be in your descent. 

Since these are such profound and intrusive questions, one would think that we would want to have this very defined and generally approved by a substantial majority of the public. It would be a mistake indeed to push for this type of tremendous power over an individual with only 51% supporting it. This would have the power to rip the country apart… and not just once but over and over again as the non-profit’s political control changes hands and the definition of “our” health care is ever re-defined. 

All of the above items need to be examined in great detail prior to entering any discussion of the non-profit taking control of 1/6^th of the U.S. economy. From just the cursory analysis presented above, it would seem to be a tremendous leap of faith to entrust the non-profit with the responsibility. The non-profit’s history for running large programs is certainly not inspiring. And as always, there is a reason for this. It has nothing to do with the non-profit’s employees; they are probably no better or worse than the general population. It probably has quite a bit to do with the elected non-profit employees, but that is what it is and most likely won’t be changing anytime soon. Those with hubris, those who seek power over others, those who seek an easier path to wealth, will always be drawn to elected offices which hold tremendous power. Buyer beware.

But there is an even more fundamental and structural reason why the non-profit has such a poor record versus the private sector. Again, let us first better define this thing we call the private sector. Unlike the non-profit, it is not a single entity. Rather it is the sum of literally hundreds of thousands of entities—each one acting on its own desires, its own market information, its own vision. An interesting analogy is to think of a non-profit employee in a trivia contest with their cohorts in the private sector. But for every one non-profit employee, the other side has hundreds and hundreds of individuals each with their own unique knowledge base and each driven to succeed by their own specific situation. Assuming all contestants in this contest have similar intelligence, etc., the non-profit employee will basically NEVER win the trivia contest. In fact it won’t even be a contest… it is a statistically certainty.

As an example, let’s assume we have a single non-profit employee competing against the “private sector” and assume the private sector is 10 people acting as a team (in reality the private sector number would be much higher). Let’s also assume the contest is a 20 question test and each participant is just a coin-flipper; 50% of the time they are right, 50% of the time they are wrong. What are the odds of the single non-profit employee beating the private sector team? 

The odds of the non-profit employee being correct on any single question is .5 or 50%. The odds of the 10 person team being correct on any single question is 1 minus .5 to the 10^th, or 99.9%. So for even a single decision, the non-profit will be outperformed by 1 to 1,000 odds.

For 20 questions the private sector will on average get 19.98 of the answers correct. There simply is no way for the non-profit employee to win in the contest.

But there are far more than just 10 employees versus the non-profit employee. If there were just 50 private sector employees versus the non-profit employee, the odds of the single non-profit employee winning on a single question is basically zero. The private sector will win 99.99999999999999% of the time and there are FAR more than 50 private sector employees for every non-profit decision maker. Make it 100 private sector employees versus the one non-profit and it becomes 99.99999999999999999999999999999% certain that the private sector outperforms the non-profit.

It is a structural, organizational reality that the non-profit will basically NEVER outperform the private sector. It is the nature of the beast. It is a design certainty which no amount of effort will overcome. This is simply the reality of the non-profit. A few against hundreds and hundreds will never win. The hundreds and hundreds have far more information, are much quicker in responding to the results of their actions, and are generally quite driven by the profit (i.e. survival) motive. The non-profit employee would require god-like abilities to overcome these realities. 

In addition, I used 20 questions in my example assuming that each and every day these participants will make 20 decisions which will affect the outcome. So these statistics are in effect for only one day! Multiply them by years and the statistics become even more overwhelming against the performance of non-profit. This is not a political bias based on anyone’s views, it is a statistical certainty. This is not a Republican or Democrat issue. It is the nature of the non-profit organization. It is not designed to, nor can it accomplish, these goals.

Based on this management consulting analysis it is clear that the non-profit is a powerful entity which has rather poor performance in running large, complex projects. This should not be a surprise; it would be astounding if it were any other way. 

And we want this non-profit to take over the nation’s health care system?! 1/6^th of the U.S. economy?  And worse yet, this has to be done RIGHT NOW! Again, speaking as an expert in organizational change and design, there can be no justified business reason for rushing through this non-profit corporation’s remaking 1/6^th of the U.S. economy. That’s basically an annual $2.4 trillion industry, for changes that don’t go into effect for 4 years. No rational business person would propose this. There are very few circumstances where the critical path would require almost immediate action to set in motions things that will take place 4 years down the road and most certainly not when dealing with an economic sector of this size and importance.

This is a disaster of monstrous proportions just waiting to happen. It is a statistical certainty that the non-profit will fail to perform, it is an organizational reality and absolutely nothing will change this reality. There are many other solutions to the present state of the individual’s health care. But the non-profit’s takeover of these industries is most certainly not one. This flying broom won’t get off the ground and we as individuals and a nation risk more than can be imagined by ignoring reality and blindly believing it can happen. Let’s end the talk of should and how… it simply can’t.

John Conlin is a self-employed management consultant.