Frequently Asked Questions (FAQs)
Q1. Why do we need a new position on privatization?
Isn’t the LWVUS current position adequate?
A1 The issue is that the current position is open to more than one interpretation. For example, one might interpret it as not including “health care” (just “public health”) in the list of essential services that should not be privatized. Further, the current position is silent on what to do if a privatized entity fails to serve the public good. Currently, the position just considers what can move from public to private, not vice versa.
Therefore, the new position
- clearly articulates the basis for considering health care a public good
- establishes that currently privatized entities can be DE-privatized.
There’s a little more, but that’s the core.
Q2. How many other program items, in addition to Making Democracy Work, can a League propose on the survey?
A2. There is room for as many as 5 additional program items, if they are succinctly worded. There are 2 questions (#11 and #16) where the survey provides response boxes for 300 words max. Since the wording “in the box” in the “Instructions How to Support the VT Concurrence…” provides all the information asked for in the statement of the question–in 94 words, there are still almost 500 words for you to enter other program items you want to recommend. Five more items might be much, but we know of several Leagues who have used the opportunity for 2 or 3 more program suggestions.
Q3. Do you propose that the Vermont update should replace the LWVUS position?
A3. No, the current position remains in force. We can’t eliminate a position, but we can add elements like those Vermont felt it needed to add. (See also Q4). In fact, we will not be surprised if the new position is adopted as an update, and only certain key portions will be used to supplement the current position, but LWVUS (who makes the editorial decisions) may not include parts that overlap with what is already there.
Q4. Is the proposed update intended to add to the LWVUS Health Care Position under “Social Policy” or the Privatization position under “Representative Government”?
A4. This proposed update is to the LWVUS Position on Privatization. It will not affect the Health Care Position. In fact, Vermont felt emphatically that the Health Care position would not be the appropriate location for the update. That is, the Health Care position does not address the commercialization of health care by for-profit entities, and therefore, does not provide a basis for advocacy opposing commercialization. By contrast, with the VT update, the privatization position *will* provide the basis for supporting bills opposing commercialization.
The Vermont study was motivated by concerns relating to health care, especially these two observations:
- The current U.S. Position on Privatization lists examples of what the League defines as a “public good” worthy of protection by League advocacy (supporting legislation that protects it and opposing legislation that doesn’t). It lists: electoral process, justice system, military, public safety, public health, education, transportation, environmental protection, and programs that protect and provide basic human needs. Note that it lists “public health,” but not “health care.” (This was pointed out by LWVUS staff when they rejected a Federal Action Request Form from Vermont that proposed to use the LWVUS privatization position as if it covered health care).
- The current U.S. Position on Privatization lays out criteria for constraining for-profit entities that manage (or own) public goods–but it has no prevision for accountability should a for-profit entity fail to achieve the commitments represented by those criteria.
- The VT study evaluated what makes something a “public good.” Is there a valid reason the current LWVUS position does not list “health care” as a public good? Does “health care” fit the criterion of being “a program that protects and provides basic human needs” … especially, “for the most vulnerable members of society”? (They concluded “yes, it does.)
- Finding that health care fits many definitions of a “public good,” from several sources, the Vermont Update explicitly adds “Health Care” as a public good to the list in the position— so that League members can advocate to protect health care services, entities, or organizations from privatization
- The Vermont Update explicitly adds accountability: if a private entity fails to deliver the benefits it promised in its contract with the public program, then the public good in question can be de-privatized.
- In addition, the study goes on the establish reasons why things defined as “public goods” should not be considered commodities subject to a “free market.” The VT researchers had no trouble finding examples where profit-seeking corporations avoided providing care in areas where it is not possible to create excess profits for investors–leaving much of the country in “health care deserts.” A public program would calculate the overall medical needs and be able to budget to cover them. Other public programs, like the fire department, are not required to be self-supporting and are not reimbursed based on how many fires they put out. Since it is a public good, the “public” allocates tax revenues to provide for it.
- Finally, the update applies to all the items listed in the LWVUS Position as not appropriate for privatization: As its placement in “Representative government” might indicate, this position would apply for example, in digital equity (broadband), where we see a similar withdrawal of essential services from areas where the corporate providers cannot achieve “sufficient” profits for investors.
Q5. Is it your position that there should be no private options available at all?
A5. Not at all.
I would also like to remind you that Positions do not require action. If you don’t feel that profit motives and outcomes are a problem for public goods in your state, you would work on other concerns. This position only empowers League members to advocate invoking the name of the League, instead of just educating, where you feel there is a problem or potential for a problem.
Income for services rendered is not considered profit. Profit refers to the return given to owners/investors who are not involved in the mission of meeting medical needs.
For health care, we would expect private clinicians (doctors, nurse practitioners, physical therapists, nutritionists, etc.) to be in clinician-owned private practices, either soloists or group practices but owned by the clinicians, not owned by for-profit corporations. Alternatively, if state law allows, they might be employed by a non-profit, such as a non-profit hospital, if the non-profit is acting as a mission-driven non-profit that returns “excess revenues” to working on their mission. Some states have “corporate practice of medicine laws” that, for reasons of conflict of interest, do not allow employment of physicians by any corporations, including hospitals, but some allow them to be employed by some non-profit corporations.
There might also be private non-profit corporations that provide health care-related goods and services, but our position focuses on providing a basis to advocate against for-profit ownership or administration of health care goods and services. Any time you invoke the name of the League, you must be sure your action does not conflict with any League position, or with League values. So if a health care good is currently being privately delivered, even if it is for-profit, if it is accessible to those who need it and affordable for the individual and the public funding source (if there is public funding), then your board would need to consider the purpose and potential outcome of advocacy to de-privatize the product, and whether that advocacy is appropriate.
In our study, we determined that health care does not follow free market principles and should not have the profit motive impairing access to health care, so Leagues should be empowered to advocate against policies that allow profit from health care. We did not study whether other public goods and services should only be non-profit.
Our study did bring us to the conclusion that for public goods, if they are not meeting the criteria set out in the current Position on Privatization, as outlined in Impact on Issues on page 67-68, then we should be able to advocate for de-privatizing.
Q6. Without definitions, and descriptions of the process for taking control of currently and historically private health services, would we be inadvertently manipulated into supporting a move that was unintended?
For example, couldn’t an administration (state or federal) that is unfriendly to women’s reproductive health services–which are currently delivered and have always been through the private sector–introduces a state or federal bill accusing such services of “failing to deliver” using bogus criteria–the waiting times for appointments are too long, the prices are not transparent, etc. They could argue that the LWV agrees (!), due to the League’s new deprivatization concurrence.
A6. In this regard, we might distinguish “historically private health services” from those turned over to private hands by the Center for Medicare and Medicaid Sevices by contract. (Medicare and Medicaid are two of the most prominent examples.) Private corporations were given the contracts on the basis that they would save the Center for Medicare Services (CMS) and taxpayers money with no loss in quality or equity–and they haven’t lived up to their contracts, ie. they have failed to deliver. (That is already envisioned in the LWVUS position in the bullets below in A7.)
One might consider that these criteria apply to returning a health service back to government control after it’s been privatized, not to initiating a process for bringing historically private health services under government control.
As one might point out, unlike entities with contracts to privatize, entities that are not bound by a contract may not have a clear-cut criterion for failing to deliver.
However, the VT study also considered whether the same criteria in the position–for turning something public over to private hands–also apply for a service being provided privately (without a specific contract). That is, if they don’t meet the criteria in the position of transparency, accountability, ensuring the public good etc, lawmakers may want to make laws to put those services into a public program, and this position update would allow League members to support them if they wanted to. (The study is not yet published. We will have to consult it later–as soon as we can.)
Q7. What are the criteria for “failing to deliver”?
A7. Criteria that speak to this are found in the current LWVUS position: The VT position operationalizes what has just been envisioned, it clearly provides consequences for failing to live up to the considerations–namely that “the services or assets will be returned to the government.”
The there 2 sources of such criteria in the current LWVUS position:
- the first paragraph says in order to privatize a service, one must confirm that “transparency, accountability, and preservation of the common good are ensured”.
- The second is a bulleted list of “considerations [that] apply to most decisions to transfer public services, assets, and functions to the private sector. They very specifically mention “a provision and a process”:
from: page 68 of Impact on Issues
- Ongoing and timely communication with stakeholders and the public.
- Statement of the circumstances as they exist and what is to be gained.
- Definition of the quality, level, and cost of service expected.
- Assessment of the private market— whether there are providers to assure competitive pricing and delivery (in some cases there may not be multiple providers if a service is so specialized (e.g., high-tech, airports).
- Cost-benefit analyses evaluating short- and long-term costs of privatization, including the ongoing costs of contract administration and oversight.
- An understanding of the impact on customers, the broader community, environment, and public employees.
- An open, competitive bidding process with clearly defined criteria to be used in selecting a contractor.
- A provision and process to ensure the services or assets will be returned to the government if a contractor fails to perform.
- A data-driven selection of private entities whose goals, purposes, and means are not incompatible with the public well-being.
- The careful negotiation and drafting of the controlling privatization contract.
- Adequate oversight and periodic performance monitoring of the privatized services by the government entity to ensure that the private entity is complying with all relevant laws and regulations, contract terms and conditions, and ethical standards, including public disclosure and comment.