11. The Children's Medical Corporation

In January 2013 the newly elected President and Congress of the United States began their first session. At the top of the agenda was health care for children. Unable to pass legislation creating universal health care for all Americans, it was decided to scale back the program and instead cover all children to the age of 18. Both the House of Representatives and the Senate were controlled by the Democrats. Their original proposal created a new government agency which would administer and implement the program. The President, a Republican, vowed to veto the bill unless the program was contracted to a private agency. Not having enough votes to override the impending veto, Congress relented and the bill was passed and signed. The Medicare portion of the Social Security tax was increased to pay for the program.

The contract was awarded to the newly formed Children’s Medical Corporation (CMC). This corporation was a conglomerate of existing medical insurance, pharmaceutical and heath care provider companies. It immediately began building health clinics for children throughout the United States. Finally the dream was a reality – free health care for all children. Although available to all children, parents still had the option to seek their own doctor and pay the associated fees. Parents opting out of the program were still required to pay the additional Medicare tax.

After the program had been in place for three years, the media began documenting problems within the system. Television news programs aired investigative reports on the poor health care children were receiving and the spiraling costs. Because of pressure from the public, Congress launched a special independent study into CMC. Here are the findings of that study:

1. Of the health care received, over 50% was rated as “not acceptable” and in the poorest, inner city neighborhoods the rate was as high as 75%. This was not based on opinion but on verifiable testing. The results were disputed by CMC which pointed out that the study was biased and conducted by a “left-wing” attack group.

2. Cost per child of the health care given was 40% to 100% higher than care given at non-CMC facilities – yet the care given at other facilities was demonstrably better.

3. Although impossible to determine an exact figure, it was found that CMC, its associated companies, clinics and clinic employees, spent hundreds of millions of dollars in lobbying efforts and political contributions. Although Democrats in congress were benefactors of these contributions, by far the biggest recipients, including the President, were Republicans.

4. In spite of the fact that CMC costs were higher and the quality of health care lower than non-CMC care, CMC continued to insist that the issue was one of money. A CMC spokesperson quote in a television interview said, “we are not receiving enough from the government to give each child the attention and quality of health care they deserved.” When asked to give an exact figure at which they would deliver the highest quality of care possible, CMC replied, “The more the better.”

5. All CMC employees at all clinics were members of the Health Care Providers Union (HCPU). The HCPU defended CMC stating that their member wages were below the national averages for comparable jobs. “It is critical that wages be increased to attract the best medical professionals possible. The lives of our children depend on it,” stated Marie Dayton of the HCPU local in California.

6. Comparison of the CMC corporate hierarchy to better performing, lower cost health care companies showed that for every 100 actual health care providers there were over 130 administrators and non-healthcare employees. The ratio in the better performing companies was less than 40 non-health care providers to every 100 that did provide care. Clearly, if money was the problem in CMC, it was being directed toward administration rather than actual health care for the nation’s children.

7. In one unbelievable waste of public money, over $300 million was spent by CMC for a new hospital in Los Angeles. After the clinic was completed, it was found it could not be used because it was built directly on top of a major earthquake fault line. While the facility sits empty and unused neither CMC nor any of its directors or administrators have been held accountable.

8. The study also revealed that the richest 5% of Americans rarely used CMC for their children’s healthcare. Poorer parents, of course, had no other option.

Congress launched a massive attack against CMC accusing it of squandering public money, public trust and endangering America’s future by providing poor health care to its children. The White House defended CMC and proposed that Congress appropriate additional funds to CMC for one region of the US. If the quality of care did not improve in two years he would consider other alternatives.

After dramatically increasing funding to one mid-west region it was found that over a two year period quality of care actually fell. CMC built state of the art clinics and laboratories with the money they received but the actual quality of care to the children declined.

As the scrutiny from the media continued, doctors and nurses working for CMC defended the medical care they provided saying, “these attacks are an insult to each one of us personally as well as to our profession. Our love and our concern is for the children of America. Anyone not working here in these clinics and hospitals day after day has no basis from which to criticize us.”

The President, in a complete about face, refused to consider any alternative other than increased funding to CMC paid for by increased taxes. A statement released by the President and endorsed by the CMC and the HCPU read, “I cannot believe that anyone could possibly think that the solution to this serious problem is ‘less money.’ I will not support any move that endangers the future of our nation’s children.”

It was noted in one report that neither the President nor most members of Congress, Republican and Democrat, use the CMC for their own children’s health care. As pressure from the public increased to do something about the situation, the CMC and the HCPU launched a series of advertising campaigns to “set the record straight.” Although there was some grandstanding on the part of Congressional Democrats who wanted the system placed under government control, no action has been taken by either party in Congress or from the White House. For CMC, it is “business as usual.”
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The above is obviously fiction – set in the future. Although the names and the dates have been changed, the story is true. There is no CMC and the year is obviously not 2017. So what is the CMC-type conglomerate of which I speak? It is the public school system.

1. Over 50% of students leave the public school system classified as “functionally illiterate.” They do not have the basic tools necessary to compete in a modern world. Even though they may (or may not) graduate from high school they operate with skills lower than a fifth grade level. In poor inner-city schools, this number increases to 75%.

2. The average cost of public education in the US in the 2003-4 school year was $8,300 with a high of $13,300 in New Jersey. There was no correlation between amount spent per state and performance. Private education consistently outperforms public education and, excluding the top, most expensive private schools, costs 20% to 60% less than public education. Even charter schools, such as in Oakland, California and Washington D.C., operate at a far lower cost per pupil yet deliver measurably better education to their students.

3. The NEA, California Teacher’s Association, and state teacher’s unions spend hundreds of millions of dollars in lobbying, advertisements, mailers and political contributions.

4. In a comparison of public to private schools regarding teachers versus all non-teaching positions (including administration) it was found in private schools that for every 100 teachers there were 25 to 40 non-teachers. I recently contacted the Los Angeles Unified School District and found for every 100 teachers there were over 130 non-teachers. Considering that teaching only takes place in the classroom it is difficult to imagine the need for so many administrators and non-teachers.

5. The $300 million facility mention above is the Belmont Learning Center. Far worse than an earthquake fault, the school was built over a waste dump emitting toxic fumes. Unlike Enron, where Ken Lay was justifiably sent to prison, no one in the public school system was held accountable.

6. For all of the grandstanding done by such pro-public education politicians such as the Clintons and the Kennedys, none actually send their children to public schools. Poor people, of course, have no such options as those rich, deeply concerned individuals who consistently reject choice in education. Those hundreds of millions of lobbying and political contribution dollars seem to be having the desired effect.

7. Because of chronically low education scores in Kansas City, a court ordered an additional $2 billion spent to improve the schools. After building gyms, Olympic pool facilities, computer labs, and paying taxis to transport white students to the schools, education scores actually got worse. The schools subsequently lost their accreditation.

Without an education our children will fail in this technological age. With over 50% of children leaving school as functionally illiterate it is difficult to believe that anyone who does not directly receive money from the current system can actually defend it, yet defend it they do.

Comparing a corporation to a government agency may seem like comparing apples to oranges. One is profit driven and one is not. Yet without the objective of profits and without market pressures to ensure excellence, government agencies are consistently wasteful and consistently deliver poor results. If being under government control ensures quality why then is the Veteran’s Administration (VA) health care system one of the worst in the country?

The public has a right to expect a corporation to deliver goods and services that are safe and “as advertised.” If not, we have the right to sue. In 1976 a suit was brought by a San Francisco high school graduate who could only read at the fifth grade level. His charge was educational malpractice. The court found that there was no duty for the state to provide a minimum level of skill and “thus no cause of action in negligence.” So the courts have ruled – public schools have no duty to ensure that our children are actually educated, all they must do is continue to operate schools.

If the public is given choice in education through a voucher system, parents, especially poor parents whose children attend some of the worst performing schools in our country, will quickly exercise that choice and send their children to private schools. Most private schools are not for profit yet perform far better than public schools. Why? If they don’t perform parents will pull their children from the school and it will eventually close. Even the public corporation Sylvan Learning Center, although driven by profits must deliver excellence or their doors too will close. Public schools in Belgium, where the voucher system is used, also deliver excellent education and at a fair price as they too much compete for voucher dollars.

In spite of all the facts and data showing the failure and waste of the public school system, nothing changes. The issue is consistently “more money will fix the problem.” What a joke. If, like the CMC, the education of our children was contracted to a private corporation and these were the results, politicians on both sides of the aisle would be outraged. Since it is a government agency, they are defended. For the public school system it is just “business as usual.