Earlier in the year the New Yorker magazine published an article called The Hot Spotters. The article covered an innovative effort to reduce healthcare costs by ensuring that the costliest patients received proper care. One of the main people engaged in this effort, Jeffrey Brenner, calculated that the top 1% of patients in the New Jersey community of Camden accounted for 30% of the healthcare costs. By providing these costly patients with proper care Brenner was able to demonstrate significant results. Part of his challenge though was finding funding...
Outsiders tend to be the first to recognize the inadequacies of our social institutions. But, precisely because they are outsiders, they are usually in a poor position to fix them.Pragmatarianism would place taxpayers in a perfect position to help fix any inadequacies that they spotted. If Brenner's awesome efforts can help save taxpayers money...then why not empower taxpayers to directly allocate some of their taxes to support his efforts? This would extend taxpayers' locus of control and increase their self-efficacy.
With the current system...as healthcare costs continue to rise...congress will either borrow more money or cut funding for public schools. Brenner's response to this "opportunity cost" was that if we effectively cut healthcare costs then we do not have to sacrifice education or health.
Speaking of awesomeness spotting and schools...here's a transcript excerpt from CNBC's executive vision program...
Simon Hobbs (Host): Andy, your website is very interesting because it allows people to very specifically target who gets what. Does that change the motivation?Wouldn't taxpayers like to know the investment they made in America? Wouldn't taxpayers like to have a real voice? Pragmatarianism would empower taxpayers to directly connect with the government organizations that they value. Adding that essential element of "choice" will help taxpayers feel the tangible positive impact of their taxes.
Andy Kaplan (DonorsChoose.org Chief Financial Officer): Yeah, that’s right Simon. At DonorsChoose.org we connect people like you with class room needs across America. So at our site, any teacher at a public school can post a project that he or she wants to do with their classroom. They describe it, they describe the school and people like you and I visit DonorsChoose, we select a project that speaks to us, and we fund it. When the project is funded, DonorsChoose takes the money, we buy the materials, we ship them to the classroom, the teacher does the project, takes pictures, the kids right thank you notes, and we send all that back to the donor. So the beauty is, the donor knows the investment they made in the classroom, and they get to see the feedback.
Simon Hobbs (Host): Mathew, how powerful is this connectivity? It’s a game changer in terms of bringing in corporations in that you partner with…it’s huge isn’t it?
Matthew Bishop (‘Philanthrocapitalism’ Co-Author): Yeah, I think technology is the great story about philanthrocapitalism because it solves two problems. One, it allows us to have much greater idea where our money is going and what use it’s being put to. And the second is it’s giving the people we’re trying to help a real voice to actually say whether we’re providing the help we say we’re providing. So DonorsChoose is fantastic, you know you get these letters back from these school kids and you really think, well I’ve done something tangible. But they actually have a really clever search process as well…a bit like Amazon recommending you books to read. You like this, well you’ll like this. So they actually very quickly figure out what kind of classroom projects you like and keep hitting you with more of them. And it’s very effective as a donor you really feel well, I like this organization.
Without that element of choice, taxpayers will continue to be nothing more than donors completely alienated from their altruism.
Here's a passage from the end of the New Yorker's article...
Critics say that it’s a pipe dream—more money down the health-care sinkhole. They could turn out to be right, Brenner told me; a well-organized opposition could scuttle efforts like his. “In the next few years, we’re going to have absolutely irrefutable evidence that there are ways to reduce health-care costs, and they are ‘high touch’ and they are at the level of care,” he said. “We are going to know that, hands down, this is possible.” From that point onward, he said, “it’s a political problem.” The struggle will be to survive the obstruction of lobbies, and the partisan tendency to view success as victory for the other side.How absurd would it be if donors to PETA and donors to the NRA had to pool their donations and elect representatives to decide how to split the money between the two organizations? The obvious result of such a system would be hyperpartisan obstructionism. To fix the public sector we should take note of what works in the private sector...choice!
With a pragmatarian system the public healthcare debate would be a moot point. Taxpayers would be able to choose to directly allocate as much or as little of their taxes as they wanted to Medicare or Medicaid. The demand for public healthcare would determine the supply of public healthcare and the supply of public healthcare would determine the percentage of the population that qualified for coverage. Merit, rather than political muscle, would determine which government organizations received funding.
If we empower taxpayers to support the government organizations that they know are awesome and we don't force them to support the government organizations that they know are absurd...then the resulting division of labor will produce awesomeness all around.
The yin and yang of life is the absurdity and awesomeness of public goods.