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Profit motive is necessary for quality health care


Column by Donald J. Boudreaux
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Not long ago my wife, Karol, and I flew from Bucharest to New York City’s JFK airport. We had two hours to connect to our flight to Washington’s Dulles airport. We missed our flight, and herein lies a lesson about today’s raging debate over government’s proper role in health-care markets.

Part of the reason we missed our flight is that, after landing on time at JFK, our plane sat for more than 30 minutes on the tarmac waiting for another jet to clear away from our gate. JFK International Airport is owned by government (the City of New York) and operated, under lease, by a government agency (the Port Authority of New York and New Jersey). Unlike Delta Airlines, the privately-owned and operated carrier that flew us comfortably, safely, and in a timely fashion over the 4,800 miles that separate Bucharest from New York, the government bureaucrats in charge of JFK airport seem to be short on an asset they control: airport gate space.

Part of the blame for our delay belongs to Delta. For whatever reason, it couldn’t load and prepare the plane departing JFK with sufficient dispatch. However, another part of the blame surely lies with the system we Americans use to supply commercial passenger air transportation. All commercial airports in the United States are built and owned by government. This means that commercial airports are neither built nor operated in accordance with the profit motive. Political and bureaucratic incentives are the dominant forces in play both in building and in operating these facilities.

One result is too few gates for loading and unloading passengers at busy airports. With no profit motive to guide the building of such gates, and with no competitive prices to convey information about how many gates it would be best to supply, politicians and bureaucrats have too little incentive and information to ensure that the number of gates at airports is economically appropriate. So at busy airports, such as JFK, access to gates is too often allocated by waiting.

Nevertheless, despite losing precious time waiting on the tarmac, when Karol and I finally got off the plane, we still had enough time to catch our connecting flight – or so we thought.

We walked quickly to passport control. Because it was the height of the summer travel season, and because JFK has long been one of the busiest international airports in the world, I assumed that Uncle Sam would have the passport-control stations well manned. Dumb me.

Karol and I spent 50 minutes waiting in a long and slow-moving line to clear passport control. At JFK’s Delta terminal that Friday afternoon the Department of Homeland Security had only three agents to service the line of U.S. citizens returning from abroad. Three. That’s all.

We had no choice but to stand in line, silently fuming as we inched forward at snail speed. I didn’t count the number of agents assigned to inspect the passports of non-U.S. citizens, but I noticed that most of the passport-control desks stood empty, mocking the many tired and frustrated passengers lined up and waiting in a slow-moving queue to have their passports stamped, clear customs, and then catch their connecting flights.

Caught in this government-induced time-trap, I couldn’t help but wonder why so many people want the same agency that cannot adequately staff one of the country’s busiest international airports to run Americans’ health care. If government were to take over more completely the supply of medical services in the U.S., the same sorts of under-staffing and shortages of service would occur.

In light of my experience at JFK, which isn’t unusual, can anyone give me a plausible reason why I should be optimistic that government would adequately staff and maintain its hospitals (remember Walter Reed!), medical clinics, and insurance desks? With the same set of incentives facing bureaucrats who now supply passport-control services facing bureaucrats who would supply medical services, it’s a childish fantasy to imagine that people needing medical care would not encounter unnecessarily long waits and other inefficiencies when seeking government-supplied medical care.

The long lines at passport control and the post office, along with the indifferent “service” typically rendered there, are too common not to be symptomatic of government supply. When customers neither pay directly for what they receive nor have the option either of not paying for the product at all or of seeking an alternative supplier, government employees have little incentive to respond to the wishes of the people they are allegedly employed to serve.


Donald J. Boudreaux is professor of economics at George Mason University, and senior fellow for economic policy and tax reform at the Virginia Institute for Public Policy.




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