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  • How Success of Private Fire Departments Undermines Obamacare

    As the debate over the “public option” for health care heats up, a new attempt to ridicule those with concerns over government provision of services has taken hold: the group’s sarcastic Facebook tagline is “1 Million Strong Against our SOCIALIST Fire Departments,” and the argument is that public health care makes no less sense than public fire departments.

    They are wrong on several fronts. First of all, as should be obvious to even the casual observer, the constitutional and economic issues are much more significant with an industry that constitutes one-sixth of our economy. Second, the idea that nobody questions the public provision of our fire services is flat-out wrong. Despite being a very small sliver of our economy, and having a long tradition that has always mixed private volunteer service with public funding, in fact many cities have contracted with private groups or completely privatized their systems. Those cities that have tried it report great success, for all the same reasons that privatization works in every other industry.

    For example, the Elk Grove district in rural Illinois put together a private fire service when they faced an imminent loss of protection by a nearby municipal fire department. They found that the private company was able to provide the service far cheaper than contracting with another local government. The private provider explains why:

    “Our first-year contract was $300,000, and we were providing the same level of service the consultant said would cost $1 million,” Jensen said. “We continue to provide service as good as that of our municipal neighbors, but because we are private, we can operate more efficiently. We save 30 to 40 percent over what a similar municipal department would cost to operate.”
    The savings come mainly in personnel. The fire district has 14 full-time firefighters and 28 paid-on-call firefighters, all of whom are privately employed. None is a union member.
    “We don’t pay the insane salaries that our municipal neighbors pay,” Jensen said. “Our benefits are more in line with traditional industry. We are non-union, which gives us a lot more flexibility in dealing with our employees. Salaries and benefits are the big savings, but we [also] have a shop where we can rebuild and refurbish fire apparatus for our own use.
    “We save money in purchasing almost anything a fire department would use, just by shopping around. We’re very cost-conscious. We watch every penny we spend,” Jensen added.

    Many more cities would probably follow this road if it were not for the strong union opposition. Privatizing fire departments is not a high priority for many people, because the cost of public fire service is not a large portion of each year’s taxes paid. However, those who have studied it have found that—just as Elk Grove saved through private sector provision—private fire services are cheaper and more efficient.

    Another gross misunderstanding promoted by this group is that a private provider will mean that the poor will go unprotected. However, their example of private fire departments once again refutes their own assertion. There are many ways to ensure that all residents in an area, poor and rich alike, can be protected by some fire service, without public provision and without mandates. For example, the report linked above describes how it was done in Chatham County, Georgia.

    [P]rospective customers are sent a mailing that informs them they are not protected against fire damage—nor are their homes, property and belongings. They are told that the Southside Fire Department can provide them with the protection that they need—and at no net cost to them. In fact, they are told, by subscribing to SSFD for fire protection,
    they will actually save money, because the savings on insurance that they will realize from doing so will far outweigh the company’s charge for service. The subscription rate varies depending on the value of the house.

    Just as property taxes vary depending upon the value of the property, the fire service rates vary depending upon the value—except the total cost of the fire service subscription will be saved in homeowners or renters insurance. Mortgage brokers and landlords both tend to require these insurances, so this will be a savings for anyone renting or owning a home—in other words, anyone for whom the fire service would be useful.

    Posted in Obamacare [slideshow_deploy]

    42 Responses to How Success of Private Fire Departments Undermines Obamacare

    1. Joseph Cooper, Sunny says:

      I was very happy to come across your website. As an Obama supporter, I have been trying to find out if there are any rational arguments to dispute the idea that public health care is similar to the public firehouses we have always had. After reading your lame arguments, I can now safely say that there are none. Thanks, and keep up the good work.

    2. Matt Arnold, Alabam says:

      Privatization of many traditional "public sector" services can be a great boon to the economy. I found this true when researching private prisons as an alternative to a state prison that was under construction in my community but the project had stalled due to the default of the contractor. The prison sat 80% completed and the state drug its heals in completing the project. As a local economic development official, I contacted private prison companies and found that private prisons operated much more efficiently and were much more active community partners. After selling the idea to local officials, we sought to sell the idea to the state. No such luck. Completely blocked by state employees unions. That was 15 years ago, sounds eerily familiar.

      • Edith M Fuller says:

        Only problem there is that many people are being imprisoned on trumped up charges…… For govt based prisons– less inmates = less cost……….. for private prisons– less inmates means less income; which defeats the purpose….. Also, being privatized– I can almost bet that employees will not have decent pay or benefits !! Just saying !!

    3. Randy Haddock says:

      Also, last I checked fire departments are managed by local and state governments. Let's see if all those mocking those who oppose Obamacare would be as excited to have Congress run fire departments, police departments and public schools around the country.

    4. Pingback: » Financial News Update - 08/26/09 NoisyRoom.net: Where liberty dwells, there is my country…

    5. Joe Biel, Portland, says:

      Sounds great! "Ingenuity" means slashing wages and benefits! What a great way to save money; by screwing workers! Why pay the "market rate"? Let's just run all people into the ground! Then no one can afford the cost of private firecare or healthcare! Let's consider if anyone reading this thought a "good solution" was cutting THEIR wages 30-40%!

    6. EdG, Maryland says:

      Like many comments posted on the net, this one is not clear enough. There municipal fire departments, non-profit departments (many are the traditional volunteer fire companies) and there are for-profit fire departments.

      The track record of for-profit departments is not good, primarily because they have insufficient personnel and can't meet national crewing standards. And in some cases, their equipment leaves a lot to be desired.

      The non-profit fire companies – usually associated with volunteers is the largest group of firefighters in the US. So we are already there in terms of the majority being non-profit, non-government run etities.

      Is the author suggesting that perhaps New York, Chicago, LA city and county would be better off as volunteers? Sounds like a great strategy – you go for it – just let me know when you do it so I make sure I don't visit those cities.

    7. Rose, Virginia says:

      That's cool, because my $50k a year as a Paramedic Firefighter is way too bloated of a salary. Hey, can we privatize teachers too so they make less money?

    8. John, New Jersey says:

      As a conservative, I feel really let down by this group. This is the second article in recent weeks published by the Heritage Group attacking my very profession. In America we used to have private, for profit Fire Departments. They were run by the insurance companies. They usually consisted of a pumper and a group of men who would only fight fires at structures they protected. If the house wasn't on the list, the owner faced a steep charge. This resulted in competition, competition that turned into fights in the streets between opposing fire companies. Companies would hire people to impede to progress of their rivals, in order to get more business from people who were extremely concerned about their wood frame houses in the 19th century. Extremely large fires would simply be left to burn, as a single insurance co. would be unable to handle it with their limited resources. This would carry over to today. Imagine a large, 9/11 type event or another plane incident on the Hudson, requiring multiple, specialized apparatus, the type of vehicles that rarely get used, but are still necessary, I'd be willing to bet that most of these "private" departments would not possess these pieces, since keeping them would not be economical. What would the result be of a nation of privatized fire protection? Chaos. Companies arriving on scene of a major disaster ill equipped to handle them, and unable to work with other units. In the modern world, even considering a "private" fire service is simply irresponsible and unrealistic.

    9. Dawn B, Homosassa, says:

      I am a former Volunteer Firefighter/EMT from the State of MD. When we as volunteers manned the apparatus to supplement the Paid Personnel that were paid by the County Government, the cost to all people that were transported or treated was 0 dollars. Here in FL, the Fire Department was privatized by the powers that be without any input from the citizenry. In my experience as of 2 years ago as well as from others that have had to utilize the Fire Service EMS services recently, the cost for a basic transport to the Hospital 10 miles away costs in the neighborhood of $500 plus. This cost goes to the individuals private Insurance Company or Medicare. I submit that a educated and hard look be taken at the benefits of a Not for Profit Fire Service vs the For Profit Fire Service; by the way, I might add that all volunteers are required to have the same level of training that Paid Firefighters possess.

    10. Rob, Virginia says:

      The fire service of today is not the fire service of yester-year, and people seem to forget that. Back in the late 80's and early 90's things like EMS were very foreign to the fire service. Today, Fire and EMS run hand in hand. Those who are in favor of privatizing the Fire service should really evaluate the situation. Most Paramedic Advanced Life Support providers are now college educated with BA degrees in Emergency Medical Services, and the vast majority of persons new to the Fire Service hold BA degrees in Fire Science, Fire Protection, etc. People have forgotten this is not the back yard training of the early years, it's an accredited and professional job now, and as such the wages should remain competitive and fair for the service and education level being provided. Privatizing the Fire Service would force well qualified and well educated individuals into an underpaid and overworked work environment.

      • EMT352 says:

        the local goverment can always include training, compensation, and equipment requirements in the contract. not that I am in support of this just a thought

    11. Jay, Pennsylvania says:

      Matt Arnold, Alabama I wonder if the increase in the number of prisoners in this country is directly related to increase in the number of privately run prisons? I wonder if their profit margins are determined by the number of prisoners they have? How about alternate sentencing; such as medical treatment for addicts, or community services for non-threatening crimes, instead of throwing everyone in jail so the private industry can make a profit.

    12. Rod, Foster City, CA says:

      Your argument rests solely on examples of private companies providing service at a lower competitive cost than available through municipalities. However, as with the financial institutions we taxpayers were recently forced to nationalize, a handful of large health care insurers have concentrated the market over the past ten years by buying out their significant competition.

      What free market advocates fail to consider is that free market capitalism depends upon competition. When the competition is eliminated though acquisition and merger, capitalism becomes "Cartel-ism." The controlling large financial institutions became "too big to fail." The controlling large health insurers are too powerful, making it economically impractical for private competitors to enter the market.

      Government participation in health care is thus likely the only way to reintroduce competitiveness into the health insurance industry. Blind allegiance to rudimentary free market principles that do not account for deliberate creation of corporate cartels leads to meaningless arguments such as yours.

    13. Andy, Ohio says:

      Can anyone on this blog provide an example of government services being more efficient than the private sector where the two compete on even ground? The president tried to use the post office but that didn't go over too well.

    14. George, Texas says:

      I bet the author thought Blackwater was a good idea too.

    15. Edward, Los Angeles says:

      Wow that is such a great solution. The real way to help improve our services is to make sure that everyone who works in public services is dirt poor with no benefits. That is exactly what I want, to know that my police and firefighters who are risking their life constantly are paid like they are Walmart employees. I know that I like to reward heroic actions with minimal pay, why not treat doctors and nurses the same way?

      300,000 for 14 full time and 28 part time firefighters means they are making an average of under 20k for the full time and even less for the part time firefighters. Hell if expenses are in the 300k and not just salaries a lot of these firefighters are making pretty close to minimum wage. To make the math work the full time firefighters need to be making 8 or 9 bucks an hour.

      I'd tend to want to reward those who bravely run into gun fire (the military), burning buildings (our firefighters)or dangerous busts (the police). Of course some would rather reward executives to the detriment of those who protect the citizenry (which I consider the most important type of job anyone could hold), I'm just not one of them. I'm all for efficiency and saving money, but not on the backs of those who protect us while we sleep.

      • Mr. X says:

        Your post says it all…. Well, everyone is in the "Hurtbox" right now with income. This a politicians perfect avenue to suggest his or her own private company to take over our safety shields.. If you think saving money this will do, you are sadly mistaken. They will surely use the money we are paying for our GOV services for something else we have needed to cut back on for years, like programs for people who don’t pay taxes, or free health care to non-citizens, or free school for non-citizen children, or free food for those who have not paid into the system, or Social security for those who have never worked, or a welfare system that rewards you for having more kids, and the list goes on…..

    16. Brian, Chino Hills, says:

      The point made by those who bring up the fire-service is NOT that a privately financed fire-service is bad, but that one that is NOT mandated and governed by an authority OTHER than profit, is not allowed.

      Sure, there are private fire departments, but they ALL must deliver their services without a profit incentive. (If it's burning, we put it out. If you are injured in a car accident, they come to your aid without asking for a deposit.)

      So the liberals point is well made. If we, as Americans, allow an entity without profit motive to govern their industry and NOT allow profit to be the only incentive for a fire service (or healthcare) then, you've just proven their point.

      Good job!

    17. LAH, Brookings, OR says:

      This article shows a truly appalling research failure. The city that pioneered fire department privatization, Scottsdale, Arizona, ended its 54 year contract with private fire suppression providers and established its own municipal fire department in 2005.

      • Dan Freeman says:

        Wow, they only stayed with their contracted provider for only 54 years. Idiot, tell me ANY fire service contract, public or private, that has lasted that long. Again, wow, a satisfied customer for over 50 years. Sounds pretty good to me.

      • Dan McGuire says:

        Actually, the citizens of Scottsdale voted 2 to 1 to continue to have a private fire department. It was the company who quit, because they couldn't make a deal with their union. The union had backed the failed ballot measures to get a public fire department, so they got the same thing by unreasonable demands in contract negotiations. The details are here: http://www.bizjournals.com/phoenix/stories/2003/1

    18. Cary, Tampa FL says:

      Public and private firehouses both work. Public and private schools both work. Public and private hospitals both work. Public and private mail carriers both work. Public and private universities both work. The point, I believe, is that a public insurance option will NOT put private insurers out of business. Chances are, the private insurers will offer options not available under the public option, and lots of people will want those options.

    19. Cary, Tampa FL says:

      @Andy — you asked for an example of government services being more efficient. I'd suggest letting the republicans answer that. They claim that a public option would put private insurers out of business, simply because the government can operate at lower cost. When making this argument, Republicans note that Medicare operates at a lower cost (higher efficiency) per patient than do private insurers. Of course, in the next breath Republicans always claim that Medicare is a mess and point to Medicare as an example of why government shouldn't run health care. Interesting strategy — making two directly conflicting argument using the same underlying facts.

    20. Cary, Tampa FL says:

      @Randy Haddock — Congress isn't going to run fire departments, or health care. Congress doesn't run the post office, or Medicare, or Medicaid, or the VA, or the Military, or the Fed, or public hospitals, or anything else. Congress simply passes laws that call for somebody else to run those things. Blue Cross/Blue Shield runs most of Medicare, with health care professionals in the government (not Congress) providing oversight. That's why Medicare's admin costs per patient are lower that private insurers' admin costs per patient.

    21. Anthony, San Francis says:

      Private fire companies started with Ben Franklin in Phil. Pa. "The Philadelphia Contributorship" The reason for the end of this and begining of public fire departments was these guys were letting homes without protection burn to the ground and literally fighting on the street to see who would be paid to fight the fires. I think we are looking at this wrong…why cant there be a service by private fire companies for all citizens free of cost reimbursed by the government.

      Anthony Pelletier

      AA Fire Science

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    23. Julian says:

      @ Cary – You rock

    24. Mike RI says:

      Thanks Rich. The link you provided allowed me understand that many union firefighters are more interested in protecting their paychecks than ensuring public safety–though they state otherwise. I agree with many of the other more reasoned, thoughtful comment providers–this area needs a botton-up review without the hyperbole and grandstanding. Strong, oft-corrupt unions are a problem: Case in point : http://www.projo.com/news/content/RIPEC_RI_SPENDI

    25. Barton says:

      This is insane – there are some responsibilities the state must take care of, what about training? capital expenditure? are we heading to the point where they won't put out your house fire if you don't have the insurance to pay them?

      Accountants should not be running the world, what about the morality of this? it doesn't serve the community at all. Think about it.

      This is not innovation this is a slide to chaos.

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    27. Josh, Virginia says:

      If there are questions regarding the efficiency of government-run insurance, why not let a public option compete with private insurers?

      Obviously, we would need to place some restrictions on the process to make sure it was truly competitive. For example, the government system would have to pay pay for services with premiums (be self-contained).

    28. chris says:

      those who can't afford fire protection save money by buying it anyway and save on their insurance? so this free market approach is beneficial because it patches up the flaws of another free market service? with a public system you don't even have to go through the trouble of managing who gets what. fire = serve.

      examples of "successful" private fire departments are ones that are essentially a monopoly serving rural areas. their success is determined on how profitable they are rather than a study of their performance. if the only option were a private fire department without any support from public funds, the bureaucracy involved in marketing for multiple companies and keeping track of which houses to let burn or not would outweigh a system with a single department managing a city.

      more money is thrown around, more people are employed but the end result is the same.

      i am not convinced a city with separate fire houses owned by separate companies with separately trained fire fighters is more efficient than one single system operating under the best approach in the interest of saving public money and citizen's lives.

    29. Brian, Arizona says:

      George from Texas who said, "I bet the author thought Blackwater was a good idea too."

      Blackwater is extremely good at what they do. Unfortunately there were not in a free market but in a corporatist market whereas the government granted them contracts. If people didn't like their behavior in Iraq, they could have stopped paying them in a free market and they would have been forced to leave. Better yet, I almost guarantee they wouldn't have had enough customers to support their deployment to Iraq in the first place. Please understand things better before you comment.

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    31. Ken Hickerson SoCal says:

      The Great Chicago Fire was a small fire that started in the poor Irish slum that for Porfit fire department won't put out.

    32. William, Hayward, CA says:

      Cary of Tampa wrote, "[Republicans] claim that a public option would put private insurers out of business, simply because the government can operate at lower cost." Not exactly. What they say is that if the government offers a cheaper, public plan, people will dump their private insurance to get lower health care premiums, and that over time, this will erode the private health care system. The public option would not operate at a lower cost; the cost would be higher. It's just that private insurers cannot, like the government, operate at a loss, which can be made up by higher taxes. So, the public option would be more competitive only in that sense, not because government run health care is more efficient, which of course it isn't.

      Nor does Medicare operate at a lower cost (higher efficiency) per patient than do private insurers. On a per-person basis, Medicare's administrative costs are actually higher than those of private insurance–this despite the fact that private insurance companies incur several categories of costs that do not apply to Medicare. Switching the more than 200 million Americans with private insurance to a public plan will not save money but will actually increase health care administrative costs by several billion dollars.

      Medicare patients are by definition elderly, disabled, or patients with end-stage renal disease, and as such have higher average patient care costs, so expressing administrative costs as a percentage of total costs gives a misleading picture of relative efficiency.

    33. Godoffal says:

      here's your private firefighting case in point. Dont have the money to pay us? well watch your home burn down

    34. Glenn says:

      Firefighters- In many states, public, private and volunteer are required to be certified and trained as emergency responders. This includes firefighter skills and emergency medical skills. Training requires commitment in time and money. As is often said- "you get what you pay for".

      Public paid departments are becoming more and more efficient in that they are structure and wildland firefighters, paramedics, emergency hazardous materials response trained , urban and rural search and rescue trained, fire prevention inspectors and "all-risk" emergency incident managers.
      Most paid fire departments work a 24 hour shift for 56 hours per week

      Many thanks to the dedicated volunteers but my choice would be to pay for a full time 24/7 fire service managed by local government. They can be depended upon to show up and usually in a timely manner.

    35. Ken says:

      If private fire departments were a good idea, there would be more of them and they would be successful. Research shows the contrary. First, the vast majority of paid fire departments in the U.S. are not unionized. Second, in every case where a private fire department has won favor of a budget conscious commission or council of any community of size they have abandoned it shortly thereafter. The taxpayers ended up paying more than the contracts required, got less service and then had to reinvent their public fire department again.

      Privatization of public safety sounds like a good idea on first blush, but it simply doesn't work because there is no money in it. Research private prisons and the abuse and illegal activity of the contractors will stagger you.

      Yes union firefighter want to protect their jobs. What did capitalism do for yours?

    36. DeltaJimi says:

      I'm a paid Firefighter/Paramedic in MD and consider myself a staunch Conservative leaning-Libertarian.

      Just like any other department or program in government the fire dept has it's share of overspending and reckless use of taxpayer dollars. It is no exception. The first and foremost commitment of the fire service is to provide 911 services for the taxpayers to it's surrounding area. More recently the fire department in my jurisdiction has grown extremely top heavy with the addition of civilian personnel now doing the duties of what firefighters were doing before up in the headquarters office and training divisions to begin with (it was still top heavy before and wasteful). This adds to the ever-growing bureaucracy and inefficiency that plagues our governments.

      I can only speak for my fire dept, but I can tell you my county spends almost between 13-20 million dollars for the last couple of fire stations being built, yet neighboring more conservative counties spend no more than 2 or 3 million dollars per firehouse and they're designed way better. Also, I think the fire dept could eliminate the code enforcement bureau and possibly a couple others and privatize them, thus making the department smaller and more efficient, and possibly even placing those firefighters back into the field running 911 calls. I can go on and on and on about what the county wastes it's money on, but it would take too long to explain these things here.

      I think that having privatized fire depts may work in some areas of this country, and I'm certainly open to the discussion. But in areas that are more metropolitan the services need to be more readily available to them with the ever increasing call volume. Emergency roadside assistance and pizza delivery services are not the same as having a heart attack and needing to get to the hospital ASAP, or needing to transport someone to a trauma center within the golden hour. Thinking like this is naive and reckless. Ask yourself this question: How about privatizing the military? Or the police dept? It would be just as ridiculous.

      As stated in the Preamble of the US Constitution, the most vital responsibility of the US government is to provide for the common defense of it's nation from all enemies, foreign and domestic. IMO that parallels to the state and local level with public safety (Police, Fire, and EMS).

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