WHY GOVERNMENT FUNCTIONS SHOULD BE DE-PRIVATIZED

Privatization of government functions gives a private entity control of a public good or service and is often inefficient and risky. The real goal is often to give businesses profits. Democrats need to reverse privatization. DOD contracts for mission critical capabilities need to be de-privatized.

SUMMARY: Privatization of government functions means giving a private entity control of or power over a public good or service. Privatization is often inefficient and can have safety and national security risks. The real goal of many privatization efforts is to give private businesses an opportunity to make profits. Democrats need to reverse decades of privatization to better serve the public. The companies the Department of Defense has contracted with to provide mission critical capabilities need to be nationalized, most notably Elon Musk’s SpaceX.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Please follow me and see my blog posts on Bluesky at: @jalippitt.bsky.social. Thanks!)

(Note: For lots of good news see Jess Craven’s Chop Wood Carry Water blog’s most recent Sunday post here.)

Privatization of government functions or “outsourcing” means more than just contracting for a prison or selling off a municipal water system. It means giving a private entity control of or power over a public good or service – essential things we depend on including public health, clean air and water, safe food, good education, transportation, health care, utilities, and safety.

Privatization is often inefficient (i.e., costs more and/or delivers lower quality goods or services than public provision) and can have safety and national security risks. (See this previous post for more information.) Privatization tends to be inefficient because it adds a layer of management and profits onto public functions. Any cost savings typically come from paying workers less. Public transparency and control over the delivery of services are typically lost and, in addition, government can lose its capacity to deliver basic services. [1] Private, for-profit companies tend to cut corners and purposely avoid expensive to serve individuals to maximize profits, compromising quality and fairness.

The real goal of many privatization efforts is not greater efficiency but a desire of politicians to give private businesses an opportunity to make profits. Some politicians may believe that privatization will produce efficiencies despite significant evidence to the contrary. However, some politicians may be looking to curry favor with private companies and their executives who can give them campaign contributions.

Some examples of failed or unwarranted privatization (in addition to ones in this previous post) include:

Privatization of prisons and detention facilities (see posts here and here for more information)
Use of ID.me for logging in to government agencies and information (see this post for more information)
Use of CLEAR for expedited security clearance at airports. (TSA PreCheck is the public alternative which costs less than one-tenth as much.)
Vouchers for K-12 education in private schools. (They divert money from public schools and typically subsidize well-off parents who are already sending their children to private schools.)
Privatization of Medicare through so-called Medicare Advantage plans. (Public Medicare is much more efficient than the privatized plans (i.e., lower cost per patient and better outcomes). Medicare would save about $100 billion a year if these private plans were eliminated. See more information here, here, and here.)

Contracts, vouchers, and just allowing the private sector to provide a service (e.g., rail and bus transportation, electricity, and Internet and phone service) are not the only ways to privatize government functions. For example, federal policies have hamstrung the U.S. Postal Service, including prohibiting it from providing some services, to allow private companies to provide a significant portion of package delivery services. The Department of Defense and other government agencies have been taking ownership shares in private companies, such as strategic minerals, chip making, and small defense manufacturing companies. [2] (For detailed information about privatization and its many variants see In the Public Interest.) [3] (For more information on how the Trump administration has been taking ownership interests in private companies and exerting control over private companies in other ways see this previous post.)

It’s usually more efficient and almost always fairer to have government provide the public goods and services that meet essential public needs (e.g., education, health care, water, sewer, waste removal, electricity, communications, transportation, public safety, and defense). Decades of privatization need to be reversed to better serve the public.

When Democrats take control of Congress in January, they should immediately take steps to slow privatization with a goal of halting additional privatization in the short-term. Over the longer term, they should de-privatize important public functions, such as the provision of Medicare and eventually all of health care.

There are situations where the ownership of private companies should be taken over by the government, i.e., they should be nationalized. The clearest examples are companies the Department of Defense has contracted with to provide mission critical capabilities. Specifically, it has contracted critical satellite-based communications and intelligence capabilities to SpaceX, including use of its Starlink and Starshield communications systems. It is not wise or safe to have these capabilities in private hands, let alone the hands of Elon Musk, the owner of SpaceX. He is a significant national security risk given his business interests, contacts, and engagement with Chinese leaders and investors. [4] Ownership of SpaceX needs to be taken over by the federal government. [5] (See this previous post for more information on Musk, SpaceX, and the national security risks they represent.)

[1] Kuttner, R., 10/13/26, “Time to de-privatize,” The American Prospect (https://prospect.org/2026/10/13/time-to-de-privatize-federal-government/)

[2] Groz, Z., 10/22/26, “As lawmakers scrutinize Pentagon equity deals, Pentagon keeps making them,” The American Prospect (https://prospect.org/2026/10/22/as-lawmakers-scrutinize-pentagon-equity-deals-pentagon-keeps-making-them/)

[3] See also Cohen, D., & Potter, C., 1/7/22, “Why privatization is worse than you know,” Public Seminar (https://publicseminar.org/essays/why-privatization-is-worse-than-you-know/), which, among other things, references the book, The Privatization of Everything, by Cohen and Mikaelian.

[4] Kaplan, J., & Elliott, J., 3/26/25, “How Elon Musk’s Space X secretly allows investments from China,” ProPublica (https://www.propublica.org/article/elon-musk-spacex-allows-china-investment-cayman-islands-secrecy)

[5] Myerson, H., 10/22/26, “SpaceX is a de facto government agency. It should be nationalized.” The American Prospect (https://prospect.org/2026/10/22/spacex-government-agency-nationalized-elon-musk-russia-ukraine-starlink/)

THE RISKS OF PRIVATIZING GOVERNMENT SERVICES

Privatization of government services, promoted by Republicans and some Democrats, rarely delivers greater efficiency. Over 40% of the federal government workforce are now private contractors. The DOD uses contractors extensively; its contracts with Musk’s SpaceX present national security risks.

SUMMARY: Privatization of government services has been promoted by Republicans and some Democrats for over 40 years. Their promises of greater efficiency rarely turn out to be true. Over 40% of the federal government’s workforce are now private contractors. The Department of Defense uses contractors extensively, including for sensitive, mission-critical functions. Its contracts with Elon Musk’s SpaceX company present serious national security risks.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Please follow me and see my blog posts on Bluesky at: @jalippitt.bsky.social. Thanks!)

(Note: For lots of good news see Jess Craven’s Chop Wood Carry Water blog’s most recent Sunday post here.)

Privatization of government services or “outsourcing” has been promoted by Republicans and some Democrats for over 40 years. Proponents claim it will save taxpayers money, improve public services, and increase public sector accountability. This rarely turns out to be true. Once the profit incentive is introduced, prices are likely to go up and quality is likely to go down. Privatization only tends to be successful if there is strong oversight and regulation, as well as real competition. (See this previous post for more details.)

Poor experiences with privatization at the municipal level led to a wave of de-privatization between 1997 and 2002. Nonetheless, privatization continued to march ahead at the federal level. (I’ve been criticizing privatization since way back in 2012. See previous posts here and here for more information.)

Numerous examples exist of privatization’s failure to deliver its promised benefits. The U.S. health care system is a classic one. The privatized, for-profit system in the U.S. is the costliest system among any of our peer countries and its outcomes are among the worst. All elements of the system are putting profits before patients. (See previous posts here and here for more information on the failures of for-profit health care.)

Other examples of failed privatization include:

Rail transportation is more efficient, dependable, and convenient in the rest of the world than with the privatized system in the U.S.
Bridges, roads, and parking meters that have been privatized by state and municipal governments often did not produce the desired results.
Water, sewer, and solid waste disposal systems’ privatization has been found in most studies to provide no cost or efficiency benefits.
Internet service is cheaper and faster where there are municipally run systems and in Europe.

Privatization is also evident in the increasing portion of the federal workforce that is contractors. The total federal government workforce of roughly 9.1 million people can be categorized as follows: [1]

3.7 million contractors (40.7%),
2.0 million civilian employees (22.0%),
1.6 million people paid through various grant programs (17.6%),
1.3 million active-duty military personnel (14.3%), and
0.5 million Postal Service employees (5.5%). [2]

The use of contractors by the Department of Defense (DOD) on the ground in war zones has gone largely unnoticed. However, more contractors have died (8,000) than US service members (7,000) in post 9/11 military activities. Contractors have become a permanent element of the military infrastructure. In the Middle East region, operational and battlefield contractors greatly outnumbered military personnel (43,800 contractors to 15,000 military) in October 2020. There were three contractors for each member of the military in Afghanistan at the end of U.S. involvement in August 2021. [3]

But the DOD’s privatization goes further and, as has become apparent recently, is jeopardizing national security and U.S. foreign policy. The U.S. DOD has billions of dollars of contracts with Elon Musk’s SpaceX company to provide critical military and national security capabilities. For example, Space X has a multi-billion-dollar contract to build a classified spy satellite network for the DOD. It also has contracts for communication services through Space X’s subsidiary, Starlink. [4]

Recently, Trump and Musk were limiting Ukraine’s use of Starlink and its military version, Starshield. Musk claims that Starshield is operated by the US government. The limitations that were imposed on these communications services prevented or slowed warnings of incoming Russian missiles and drones, and also degraded Ukraine’s offensive military capabilities. [5]

It seems likely that the U.S. DOD is similarly dependent on SpaceX communications capabilities. It doesn’t seem wise or safe to have privatized these DOD mission critical capabilities.

Furthermore, Musk is considered a significant national security risk by DOD and intelligence officials, as well as by other intelligence experts. [6] When Trump took office in 2025, there were three DOD investigations of Musk’s and Space X’s repeated failures to file mandatory national security reports of contacts and involvement with foreign entities. [7] Their significant contacts and engagement with Chinese leaders and investors make this a matter of serious concern. Space X has sizeable investments from Chinese investors, but because of its contracts with the DOD, Space X does not want its investments from Chinese investors to be public knowledge. Therefore, it actively works to make sure those investments are laundered through intermediate entities in the Cayman Islands and elsewhere, which keeps investors anonymous. [8]

Roughly half of Musk’s Tesla vehicles are built in China and China is Tesla’s largest market. Tesla’s largest factory is in Shanghai and its construction received a $2.8 billion investment, major tax breaks, and special permissions from the Chinese government. Musk regularly meets with Chinese government and Communist Party officials due to his multiple business interests, current and future, in China.

It seems quite clear that sensitive DOD capabilities should not be privatized to Musk’s company – or anyone else’s for that matter.

My next post will focus on the need to slow, stop, and eventually reverse the privatization of essential government functions.

[1] Gordon, N., 10/5/17, “Contractors and the true size of government,” Project On Government Oversight (https://www.pogo.org/analyses/contractors-and-true-size-of-government)

[2] Note: These data are from 2017, but overall these numbers have been relatively stable over time. If anything, the percentage of contractors has increased.

[3] Cancian, M., 8/30/21, “In Afghanistan, contractors were unsung heroes of US efforts,” Breaking Defense (https://breakingdefense.com/2021/08/in-afghanistan-contractors-were-unsung-heroes-of-us-efforts/)

[4] Elordi, M., 10/21/24, “Elon Musk’s companies have faced at least 20 federal probes,” Daily Wire (https://www.dailywire.com/news/elon-musks-companies-have-faced-at-least-20-federal-probes-report)

[5] Roth, A. 10/14/26, “Ukrainian military’s access to Starlink satellite internet suddenly restricted,” The Guardian (https://www.theguardian.com/world/2026/oct/14/ukraine-soldiers-combat-access-starlink-satellite-internet-restricted)

[6] Reich, R., 3/21/25, “Is the Muskrat working for China?” Robert Reich blog (https://robertreich.substack.com/p/is-the-muskrat-working-for-china )

[7] House Committee on the Judiciary, 2/13/25, “Fact Sheet: Trump administration, DOGE punish agencies investigating Elon Musk’s companies,” (https://democrats-judiciary.house.gov/uploadedfiles/2025.02.13_fact_sheet_re_musk_investigations.pdf

[8] Kaplan, J., & Elliott, J., 3/26/25, “How Elon Musk’s Space X secretly allows investments from China,” ProPublica (https://www.propublica.org/article/elon-musk-spacex-allows-china-investment-cayman-islands-secrecy)

HOW THE RICH BENEFIT FROM THE RECORD HIGH FEDERAL DEBT

The federal debt was $1 trillion in 1980 and now is $40 trillion due to Republican tax cuts and increased military spending. Wealthy individuals and corporations pay less in taxes and get lots of interest from government bonds. The rest of us are hurt by high inflation and interest rates.

SUMMARY: The federal debt has grown from $1 trillion in 1980 to a record $40 trillion today. President Trump has added $12 trillion to the debt. The causes of the dramatic growth of the debt are quite clear: Republican tax cuts and increased military spending. Wealthy individuals and corporations benefit by paying less in taxes and collecting over $360 billion a year from interest on government bonds. High government debt hurts average Americans by increasing inflation and the interest rates they pay on all types of debt. This all leads to high and growing economic inequality.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

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The federal debt has grown from $1 trillion in 1980 to a record $40 trillion today. President Trump has added $12 trillion to the debt in six years as President (despite his promises to reduce it); that’s almost a third of the debt that’s accumulated over the last 45 years. And it’s now growing at a rate of about $2 trillion a year. The debt has grown very fast in recent months, in part because Trump’s tariffs were declared illegal and had to be refunded. [1]

The causes of the dramatic growth of the debt over the last 45 years are quite clear:

Republican tax cuts under Presidents Reagan, G. W. Bush, and Trump that primarily benefit wealthy individuals and corporations,
Increased military spending including the costs of wars, primarily fueled by Republican Presidents, and
At a less dramatic level, one-time emergency spending in response to the Covid pandemic and the economic crash of 2008.

The G.W. Bush and Trump tax cuts gave the richest 20% of Americans 65% of the benefits, while the top 1% got 22% of the benefits. It’s estimated that these tax cuts’ reductions of the federal government’s revenue have added about $11 trillion to the debt since 2001.

Wealthy individuals and corporations benefit from this in two ways. They are:

Paying less in taxes, and
Collecting a big share of the $1 trillion a year in interest the government is paying for the money borrowed to cover the debt.

Wealthy individuals and corporations used to help fund the government by paying more in taxes. However, top income tax rates for wealthy individuals have fallen from 91% in the 1950s to 37% today. Corporate tax rates have fallen from 50% to 21%. Today, the 400 richest Americans pay an average effective tax rate of only 24%, including federal, state, local, and corporate taxes. Many of them have years where they pay no federal income taxes, including Donald Trump and Jeff Bezos. [2]

This loss of government revenue means the government spends more than it takes in. Therefore, it must borrow money to cover the difference. So, wealthy individuals and corporations now fund government spending by loaning it money (by buying government bonds) and then collecting interest on those bonds.

The federal government is now paying $1 trillion a year in interest on the $40 trillion debt that is covered by selling government bonds to investors. While 30% of the bonds are owned by foreign investors and governments, 70% are owned by domestic investors. These investors include individuals, mutual funds, pension funds, and companies such as banks and insurance companies. The richest Americans own a disproportionate share of financial investments, with the richest 1% of Americans owning 36% of all financial assets. Therefore, a reasonable estimate is that at least 36% of the $1 trillion the government pays in interest, $360 billion a year, is paid to the richest Americans. [3]

The $1 trillion in annual interest payments are $1 trillion that the government doesn’t have to spend on other programs and services. This amount is roughly equal to what is spent on Medicare in a year or what is in the annual Defense Department budget.

Government borrowing of large amounts of money increases interest rates. The rapid current borrowing has pushed the interest rate the government has to pay to get investors to buy its mainstay 30-year Treasury bonds to 5.5%, the highest level in 25 years. As a result, interest rates Americans pay on mortgages, credit card debt, car loans and leases, and student debt are all increasing. The cost of borrowing money for businesses is also increasing. This all increases the rate of inflation. [4]

So, while wealthy individuals and corporations are pocketing billions of dollars due to lower tax rates, they are also collecting billions in interest on their investments in government bonds. Meanwhile, average Americans are paying more on any kind of debt they have, are facing inflation in the prices of the goods and services they need, and are getting less support from the federal government because of reduced spending due to less revenue and more that has to be spent on paying interest on the debt. All of this leads to very high and growing economic inequality in the U.S. (See this previous post for more details.)

For lots of good news see Jess Craven’s Chop Wood Carry Water blog’s most recent good news Sunday post here.

[1] Johnson, J., 8/20/26, “Economists blame $40 trillion debt milestone on two things: GOP ineptitude and tax cuts for the rich,” Common Dreams (https://www.commondreams.org/news/economists-trump-40-trillion-debt)

[2] Reich, R., 8/20/26, “Who’s raking it in as the national debt explodes?” Robert Reich blog post (https://robertreich.substack.com/p/who-gets-paid-as-our-national-debt)

[3] Reich, R., 8/20/26, see above

[4] Kuttner, R., 8/19/26. “How the cost of money spikes inflation,” The American Prospect (https://prospect.org/2026/08/19/how-cost-of-money-spikes-inflation/)

RESIST GOVERNMENT USE OF ID.me FOR IDENTITY VERIFICATION

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SUMMARY: Our governments should not be requiring us to provide personal identity information to a private, for-profit company in order to access government programs and information. Yet, that’s what’s happening. It’s a dangerous example of privatization that is redundant and costs taxpayers money, and, in this case, their privacy. I urge you to boycott this if you can and to contact your elected officials to protest. Furthermore, the U.S. needs to better regulate the collection and use of our personal data by the private sector, as Europe has done since 2018.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Please follow me and see my blog posts on Bluesky at: @jalippitt.bsky.social. Thanks!)

Providing citizens access to government agencies and information is an essential government function. Verifying people’s identity for such access shouldn’t be contracted out to a for-profit company. Yet, that’s what the federal government is doing.

Since 2016, some federal agencies have contracted out identity verification for access to their programs and databases to ID.me. ID.me is a hundred-million-dollar, for-profit company. Recently, Medicare and the U.S. Treasury have been added to the list of ID.me users that includes the IRS, Social Security, and Veterans Affairs (which requires it to access family members’ old military records that are public information). As-of 10/29/26, the U.S. Treasury Department will require use of ID.me to access account information. ID.me has contracts for identity verification with 20 federal agencies, as well as at least 50 state agencies, notably those providing unemployment benefits. [1]

ID.me requires you to provide your date of birth, Social Security number, a photograph of your driver’s license or passport, and a picture of your face taken with your cellphone. This puts a biometric facial recognition image in the hands of a private company with little oversight or control over how it uses the data. ID.me also provides identity verification services to dozens of private companies, including Apple, Amazon, Bank of America, Ford, and JPMorgan Chase. ID.me claims it doesn’t sell data and that it makes its money by charging fees for its services, but I find it hard to believe that it isn’t finding ways to monetize the data it holds on hundreds of millions of Americans.

I urge you to resist by refusing to use ID.me if you can. I also urge you to contact your U.S. Representative and Senators to ask them to block the use of ID.me (or at least the expansion of its use). (You can find contact information for your US Representative at http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.)

If a login ID and password, along with verification by email, text, or phone message, is secure enough for our access to our bank and other financial accounts, it’s good enough for access to Medicare, Social Security, and other federal data and programs. Furthermore, you can apply for and collect Social Security benefits without going through ID.me and you can sign up for Medicare without it. So, why should it be required to access one’s information at Social Security, Medicare, or the U.S. Treasury? There has been no demonstrated need for this additional security.

Moreover, the U.S. government has its own very similar enhanced security program called Login.gov. So, ID.me is redundant. (Note: I don’t even want to use Login.gov as it puts a biometric facial recognition image in the hands of the Trump regime and I don’t trust how it might use such data.)

ID.me has persuaded government agencies to use its ID verification services through aggressive lobbying and marketing. For its unnecessary services, ID.me has, to date, billed the government (i.e., taxpayers) over $1 billion! ID.me is worse than unnecessary and redundant, it’s another example of privatization taking (stealing?) money from taxpayers. Moreover, once in place, it’s very hard to terminate its use and, eventually, the government may just give in and drop its own capability to perform identity verification. This would mean the end of the historically relatively easy and secure access of citizens to government agencies and programs without giving sensitive personal data to a private entity.

It’s bad enough that for-profit businesses are capturing our personal identity information whenever we interact with them directly. They capitalize on it by using it to tailor their marketing and pricing (aka surveillance pricing; see more here). They also make money by selling our data or sharing it with others. They capture our data through preferred customer and frequent flyer programs, through our activity on social media platforms, through product warranty and purchase registrations, etc.

There should be better government regulation of personal data collection and use by the private sector. For example, regulations should require disclosure of when and what personal data companies are capturing, and how they’re using it. We should have better options for opting out of personal data collection and use, and the ability to require companies to delete our data. Europe has done a much better job than the U.S. of regulating personal data collection and use through its 2018 General Data Protection Regulation (GDPR). It protects individuals when their data is captured and used by private and public entities. There’s a nice overview of it here and more on its legal background here.

What for-profit companies are doing when we interact with them is egregious, but the public sector – our government – should not be abetting the capture, use, and abuse of our personal data by requiring us to provide personal identity information to a for-profit company in order to access government programs and data. However, this is what’s happening with governments’ use of ID.me for login identity verification.

I urge you to contact your U.S. Representative and Senators and ask them to oppose the use of ID.me by the federal government. (See above for links to find contact information for your US Representative and Senators.) You can also contact state officials – your Governor and legislators – and ask them to oppose the use of ID.me at the state level.

For lots of good news see Jess Craven’s Chop Wood Carry Water blog’s most recent good news Sunday post here.

[1] Kuttner, R., 10/6/26, “Identity crisis,” The American Prospect (https://prospect.org/2026/10/06/identity-crisis-federal-government-access-id-me/)

ENDING SURPRISE HEALTH CARE BILLING COSTS LOTS OF MONEY

The 2020 No Surprises Act set up an arbitration process so patients didn’t get huge surprise medical bills. The result was profits for corporate capitalists and huge health care costs and waste. Patients pay for this through increased premiums with no improvements in health care quality or outcomes.

SUMMARY: The federal No Surprises Act was passed in 2020 and set up an arbitration process where insurance companies and providers would negotiate the payment for out-of-network charges so patients didn’t get huge surprise bills. What happened is a classic example of how for-profit corporate capitalism creates huge costs and waste in our health care system. Ultimately, patients are paying for all of this through increased premiums, while the cost of our health care system spirals upward with no improvements in quality or outcomes.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Please follow me and see my blog posts on Bluesky at: @jalippitt.bsky.social. Thanks!)

You probably remember the surprise health care billing problem that made headlines in 2019 and 2020 where patients were getting huge bills for “out-of-network” medical services over which they had no control, such as in the emergency room or for anesthesia or radiology. As a remedy, the federal No Surprises Act was passed in 2020 and set up an arbitration process where insurance companies and providers would negotiate the payment for out-of-network charges, so patients didn’t get huge surprise bills.

Although the Act did succeed in keeping patients from getting surprise bills, what happened is a classic example of 1) how for-profit corporate capitalism dominates and has corrupted our health care system, and 2) how the lack of a single payer system wastes time and money. With a single payer system, the surprise billing problem would never have happened in the first place because there would be no such thing as “out-of-network.”

The arbitration system created to “solve” the surprise bill problem has become another layer of bureaucratic waste. It has created two new sets of middlemen, arbitrators and consultants, who manipulate the system to maximize their own profits on the backs of our already expensive health care system. [1]

The arbitration system primarily has huge insurance companies on one side who want to pay less for medical services. On the other side, in many cases, are private equity-owned medical staffing companies trying to maximize billings and profits. The No Surprises Act instituted an arbitration system using an independent dispute resolution process (IDR).

The in-network rate for medical services is supposed to be used as a guideline for determining payments, but it is not a mandated standard. Policy makers estimated there would be 20,000 arbitration cases a year nationally, based on experience with a similar system that mandated in-network rates as the standard.

However, in 2025 there were 2.2 million arbitration cases and payments were triple those of the previous year. Providers won roughly 85% of the cases and some outrageous payments were made. For example, there were 25 payments for over $10 million each for procedures that had an in-network cost of $100 to $2,000.

One of the new middlemen, the arbitrators get a flat fee per case and took in $1.3 billion. Given their flat rate, they have a perverse incentive to want to stimulate more cases as the only way to increase their revenue. The way to incentivize more cases is to make high payment awards that create an incentive for providers to file more cases. These high payments establish precedents that are cited in subsequent cases, so the payment awards just spiral upward. By the way, five of the certified arbitrators have private equity backers.

The other new middlemen are consultants to providers and their private equity owners. One of these consultant companies, HaloMD, filed 20% of all the arbitration cases and earned over $1 billion in fees in 2025. These consultants, of course, have an incentive to maximize the payment awards and they brag about getting eight to thirteen times the typical in-network payment rate for their clients.

The insurers are fighting back in unusual ways. Across the 2.2 million cases in 2025, in roughly one million cases they simply gave up and defaulted to the providers’ requests. In another 380,000 cases, they offered to pay $1 or less. Clearly, they are not participating in the arbitration system in good faith. It appears their strategy is to fight in court to get cases thrown out en masse rather than having to fight case by case – although the No Surprises Act bans judicial review of individual billing disputes. Or their strategy may be to have the arbitration system spiral so far out of control that the insurers can argue in court that the whole system should be thrown out. A piece of the court-based strategy may be to delay payments. In some cases, providers are reporting that insurers are simply refusing to pay. A trade association for emergency medical services providers has reported that about 60% of awards were not paid within the 30-day period mandated by the No Surprises Act.

Ultimately, patients are paying for all of this – the outrageous payments for the services and the billions of dollars of administrative overhead costs. Individual patients aren’t getting huge surprise bills, rather we are all paying through increased premiums for our health insurance. And the cost of our health care system spirals upward with no improvements in quality or outcomes – just more capitalists making more money. (See this previous post for a more general overview of how capitalism has corrupted our health care system. See this previous post for how a universal, single-payer health care system would save lots of money and lives.)

For lots of good news see Jess Craven’s Chop Wood Carry Water blog’s most recent good news Sunday post here.

[1] Dayen, D., 8/13/26, “Congress face-plants on surprise health care bills,” The American Prospect (https://prospect.org/2026/08/13/congress-trump-no-surprises-act-health-care-bills-insurance/)

UNIVERSAL HEALTH CARE SAVES LOTS OF LIVES AND MONEY

SUMMARY: A universal, single-payer U.S. health care system could save over 100,000 lives and $1 trillion every year. However, because capitalism has corrupted our health care system, which now puts profits before patients, the potential benefits, both in quality and in savings, won’t occur unless the corporate giants in the system are broken up or strongly regulated. Six corporations dominate Big Medicine with over $2 trillion in revenue and $34 billion in profits in 2025.

(Note: If you find a post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Please follow me and see my blog posts on Bluesky at: @jalippitt.bsky.social. Thanks!)

A reformed U.S. health care system providing universal coverage could save over 100,000 lives and $1 trillion every year according to a study from the Yale School of Public Health. A universal U.S. public health insurance program, such as Medicare for All, would save over $1 trillion a year even after including roughly $300 billion for the additional care received by currently uninsured or underinsured people. [1]

The five major sources of savings are:

Reduced administrative overhead. At least 15% of U.S. health care spending, about $800 billion annually, is administrative waste. Peer countries and Medicare spend 1% to 4% on administration.
Lowered drug costs due to regulation and negotiation of drug prices.
Reduced fraudulent billing from for-profit entities working to maximize profits.
Fewer emergency room visits and hospitalizations due to earlier and less expensive treatment of medical conditions.
Standardized and capped prices for health care services.

Universal health insurance would, of course, undo the coverage cuts and other health policy changes implemented by the Trump administration since 2025. This alone would prevent about 51,300 deaths a year. Universal comprehensive and affordable health coverage would benefit the over 45 million adults who are underinsured – where deductibles and co-pays make needed care unaffordable. This would save another 29,600 lives a year. Finally, universal health insurance would, of course, insure the uninsured saving an estimated 33,300 additional lives. So, in total over 114,000 deaths per year would be averted.

The Yale study builds on and confirms estimates in a less comprehensive 2020 study that concluded that a single-payer, universal health care system in the U.S. would save at least 68,000 lives and $450 billion a year. [2]

However, capitalism has corrupted the U.S. health care system. The pursuit of profits has become the priority, rather than care for patients. Costs are high and growing fast, while outcomes are poor. (See this previous post for more details.) Big corporations (aka Big Medicine) dominate health insurance, drug manufacturing, hospitals, and doctors’ practices. Middlemen skim off profits at many points in the system. Private equity firms (vulture capitalists) pocket profits at the expense of patients, doctors, and others. Practitioners are burned out and leaving clinical practices in record numbers leading to shortages of doctors in primary care and many specialties, especially mental health. [3]

Therefore, a universal, single-payer, Medicare-for-All type system won’t achieve all its potential benefits, both in quality and in savings, unless the corporate giants in the health care system are broken up or strongly regulated. [4]

Six corporations dominate Big Medicine: huge insurer / provider conglomerates UnitedHealth, CVS, and Cigna, along with mega-wholesalers McKesson, Cencora, and Cardinal Health. They are six of the fifteen largest corporations in the U.S. They have been built by mergers and acquisitions over the last 16 years; only one of them was among the fifteen largest corporations in 2010. They had over $2 trillion in revenue and $34 billion in profits in 2025. For example, McKesson, Cencora, and Cardinal Health are the three largest wholesale drug distributors, controlling 98% of the market, giving them, as middlemen, monopolistic leverage over drug manufacturers, providers, and consumers. (See this previous post for more on corporate consolidation and concentration in health care.)

Big Medicine now employs 80% of doctors. This exemplifies the major changes in our health care system since the early 1980s when 80% of doctors owned their own private practices. Big Medicine (as with big retailers and big tech) also pushes manufacturing of drugs and medical supplies to low-cost sources overseas. This makes supply chains brittle and results in shortages if there’s any disruption.

For patients, Big Medicine means unaffordable coverage, doctor shortages and long wait times, longer trips to doctors and hospitals, administrative barriers to care and payments, worse health, and medical debt for 40% of American adults. For doctors and other practitioners, it means decreased pay and benefits, increased pressure to produce billings, decreased time with patients, delayed payments for services, and worsening working conditions. Big Medicine has pushed both patients and practitioners into frustration and anger, and, as a result, only 28% of patients trust the health care system and practitioners are leaving the field at unprecedented rates.

For lots of good news see Jess Craven’s Chop Wood Carry Water blog’s most recent good news Sunday post here.

[1] Kristoffersen, M., 8/13/26, “Universal health coverage could save $1 trillion and 114,000 lives every year, Yale study projects,” Yale School of Public Health (https://ysph.yale.edu/news-article/universal-health-coverage-could-save-one-trillion-dollars-and-114000-lives-every-year/)

[2] Galvani, A. P., et al., 2/15/20, “Improving the prognosis of health care in the USA,” The Lancet (https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(19)33019-3/abstract)

[3] Freer, E., & Harper, M., August 2026, “Break up Big Medicine: A health care agenda to restore power to patients and practitioners and save families $6,000 a year,” American Economic Liberties Project (https://www.economicliberties.us/wp-content/uploads/2026/08/AELPHealthcareAgenda.pdf)

[4] Dayen, D., 8/27/26, “Health care reform needs more than universal coverage,” The American Prospect (https://prospect.org/2026/08/27/health-care-reform-universal-coverage-medicare-for-all/)

WHAT DEMOCRATS NEED TO DO Part 2

Democrats need to be more dramatic, effective, and consistent in opposing Trump, his nominees, and the congressional Republicans’ agenda. They need to step up their resistance while promoting and committing to enact policies that would support everyday Americans.

(Note: If you find this post too long to read, please just skim the bolded portions. Thanks for reading my blog!)

(Note: Correction. In my previous post asking you to contact your U.S. Representative and ask them to oppose elements of the proposed Republican budget, I wrote that the proposed cuts to Medicaid were “$700 – $800 million.” As many of you know, that should have been $700 – $800 BILLION.)

This previous post made the case that Democrats need to be more dramatic, effective, and consistent in opposing Trump, his nominees, and the congressional Republicans’ agenda. It identified policies that Democrats should be promoting for our economy and the economic well-being of all Americans. This current post focuses on policies in the social services arena, including health care reforms, drug price reductions, enhancements to Medicare, and ensuring long-term funding for Social Security.

Here are some specific policies Democrats ought to be promoting and committing to enact in the social services arena when they are back in power:

Ending wasteful and dangerous privatization of health care. Here are two examples;
- Private equity firms should be banned from the health care industry. The example of Steward Health alone should be enough to seal this case, but there are plenty of other examples as well. (See this previous post for more information.)
- End the Medicare Advantage program, which privatizes Medicare and results in huge, often fraudulent, wasteful costs to the Medicare program. For example, in 2024, illegal overbilling by Medicare Advantage providers (i.e., big insurance corporations) was estimated to be $83 billion. Medicare Advantage is estimated to cost Medicare $140 billion more per year than if all individuals were on traditional Medicare. [1] (See this previous post for more details.)
Strong regulation of drug prices. President Biden took some initial steps to regulate and reduce drug prices, but President Trump is undoing them. In 2022, U.S. drug prices were two and three-quarters times (178% more than) prices in 33 other industrialized countries. This means that our federal, state, and local governments (i.e., taxpayers) and all of us pay over $200 billion a year extra, which fuels exceptionally high profits for drug makers (when compared to other sectors of our economy). [2] (See this previous post for more details.)
Enhance Medicare. If the Medicare Advantage program was eliminated and Medicare was allowed to negotiate prices for all drugs (see the above two bullet points), the savings would be sufficient to pay for the addition of dental, hearing, and vision benefits to Medicare, as well as to cap out-of-pocket spending by Medicare enrollees.
Ensure Social Security funding for the rest of this century. Currently, workers pay taxes into Social Security only on the first $176,100 they earn in a year. This means that someone making a million dollars stops paying into Social Security after February 15 and someone making ten million dollars stops paying into Social Security after the first week of January. Simply eliminating this cap would increase Social Security’s revenue by roughly $100 billion per year. This would provide about 75% of the funding needed to allow Social Security to pay out its full planned benefits for the rest of the century. The rest could be raised by taxing investment income, estates, and gifts or a variety of other strategies. [3]
- NOTE: The Medicare and Social Security Fair Share Act in Congress would require taxpayers with over $400,000 in income in a year to pay a bit more into Medicare and Social Security. This would fully fund planned Medicare and Social Security benefits for at least the next 75 years. [4]

There are plenty of other policies that Democrats should be advancing to demonstrate that they would better serve and support workers and everyday Americans than Trump and the Republicans. Examples include housing; early education and child care; supporting workers and their unions; effective regulation of businesses for worker, consumer, and public safety; and strong enforcement of antitrust laws including the breaking up of monopolistic companies.

If any of your members of Congress are Democrats, I urge you to contact them and ask them to step up their resistance while promoting and committing to enact policies that would support everyday Americans. You can find contact information for your US Representative at http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1] Dayen, D., 1/27/25, “We found the $2 trillion,” The American Prospect (https://prospect.org/economy/2025-01-27-we-found-the-2-trillion-elon-musk-doge/)

[2] Dayen, D., 1/27/25, see above.

[3] Dayen, D., 1/27/25, see above.

[4] Conley, J., 5/9/25, “Democrats’ bill would extend Social Security and Medicare solvency ‘as far as the eye can see’,” Common Dreams (https://www.commondreams.org/news/social-security-medicare-2671925476)