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How Success of Private Fire Departments Undermines Obamacare

Posted By Guinevere Nell On August 26, 2009 @ 10:24 am In Obamacare | Comments Disabled

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,” [1] 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 [2] and economic [3] 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 [4] 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. [5]

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.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/08/26/how-private-fire-departments-success-undermines-obamacare/

URLs in this post:

[1] “1 Million Strong Against our SOCIALIST Fire Departments,”: http://www.facebook.com/group.php?gid=111256528714&ref=search&sid=662527412.2765958319..1

[2] constitutional: http://blog.heritage.org2. http://www.foundry.org/2009/08/24/is-the-individual-mandate-constitutional/

[3] economic: http://www.heritage.org/press/commentary/ed070509a.cfm

[4] Elk Grove district in rural Illinois: http://www.heartland.org/publications/budget%20tax/article/18741/Privatized_Fire_District_Keeps_Costs_Low_and_Service_High.html

[5] private fire services are cheaper and more efficient.: http://reason.org/news/show/122159.html

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