Absolutely great USA Today column by Instapundit Glenn Reynolds about the VA scandal and the larger lesson about perverse public-sector incentives at the root of it all:
Even though veterans were dying, and books were being cooked, every single VA senior executive received an evaluation of "fully successful" or better over a 4-year period. That's right. Every single one. Over four years. At least 65% of them received bonuses ("performance awards"). All while veterans around the country were suffering and dying because of delayed care. The executives got these bonuses, in part, because they cooked the books, because the bonuses were more important to them than the veterans' care. It would be nice to believe that this sort of problem is limited to the VA, but there's no particular reason to think that it is. The problem with the VA is that, like every other government agency—and every other human institution —it's not a machine that runs itself. It's a collection of people. And people tend to act in their own self interest.
He continues:
the strongest priority of most bureaucracies is the welfare of the bureaucracy and the bureaucrats it employs, not whatever the bureaucracy is actually supposed to be doing.
Reynolds is not a nihilist who believes that nothing can improve the situation. But it's not an easy nut to crack. The starting point is to recognize that the worst attributes of self-interested behavior are, ironically, mitigated more effectively in market situations. Yes markets are made up of individuals and groups (companies, firms, nonprofits, etc.) all pursuing their advantages. Unlike in the public sector, where actors typically have guaranteed revenue or a state-enforced monopoly over a certain set of goods and services, private-sector actors have to woo and keep customers. Observers such as Bernard Mandeville understood that "private vices" yield "publick benefits" and Adam Smith noted that "it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." More recently, Milton Friedman was fond of saying:
The case for free enterprise, for competition, is that it's the only system that will keep the capitalists from having too much power. There's the old saying, "If you want to catch a thief, set a thief to catch him." The virtue of free enterprise capitalism is that it sets one businessman against another and it's a most effective device for control.
The same dynamic doesn't apply in many government situations and certainly doesn't in a place such as the Veterans Administration, which not only delivers benefits but determines whether you get them in the first place. The first step toward reform is to recognize the root problem of the dysfunction: There's a total disconnect between customer satisfaction and rewards for those within the system. Seriously, every senior exec at the VA was great at his or her job? What is this, Lake Wobegon for bureaucrats? The second step is to introduce competition among providers, especially by giving beneficiaries the all-important power to go elsewhere, whether through vouchers or other means. All businessess, whether private-sector or public-sector, shape up the minute their gravy train is imperiled.
Read Peter Suderman on the pressing lessons we should all be learning from the VA and Obamacare.
Take it way, Remy, with "God Bless the USA" (VA Scandal Remix):
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