I thought we were winning but we may be losing

I started reading more about for-profit K-12 schools last spring because I was talking with people about teachers and unions during the Issue Two campaign.

In the course of those conversations, I found that people here were very surprised to learn that nearly half of “public” charter schools in Ohio are run by for-profit entities. They weren’t happy about it either, which isn’t surprising, because privatization isn’t what they were sold when they were sold public education reform. When a politician or expert tells people “we’re reforming your public schools!” people just naturally assume those politicians and experts actually mean “reforming public schools” not “creating publicly funded for-profit schools”. Those are two different things to an ordinary non-expert person.

I’ve been following the progress of one lawsuit against a for-profit in Ohio (here for the prior posts). The company in question has a lousy record on educating kids, but that isn’t really my focus. When tracking the burgeoning for-profit education sector I’m just following the money.

This company, White Hat, operates schools in five states. White Hat schools are called public schools but they should really be called for-profit schools, because for most people, “public” means “not for profit”. I don’t believe the use of the word “public” and the omission of the word “profit” in the education business is an accident. It’s marketing.

Publicly funded for-profit schools scare the hell out of me, because the stakes are very high. We could lose not-for-profit public education. We may still have publicly-funded education, but that’s not the same thing.

In this particular lawsuit, parents sued the for-profit manager of ten charter schools because they wanted some transparency and accountability on where the public money was going.

White Hat stonewalled on where the money went, then the case then took a dramatic turn outside of court, on the Ohio legislature side:

A Franklin County judge has given charter-school kingpin David L. Brennan and the schools suing his for-profit management company an additional 60 days to work on a new contract. But Gov. John Kasich and GOP leaders in the General Assembly might resolve the year-old lawsuit sooner. The Senate will decide next week whether to keep several charter-school provisions added to the budget by House Republicans at Brennan’s request. Many involve issues at the center of the lawsuit against his White Hat Management Co., including one that would allow the for-profit company to keep secret how it spends tax dollars it receives to operate charter schools. Another would give White Hat possession of school desks, supplies and other items purchased with tax dollars, should a school close.

Those measures were sidelined, but only because they got an enormous amount of negative attention. They would have turned over publicly-owned assets to for-profit education management companies, which was apparently too much reform and exciting innovation for even Ohio to rubberstamp. So, despite last-ditch efforts by Republicans to rescue White Hat, the lawsuit went forward. Then the public and the parents had an interim win, when the judge ordered the for-profit actor to turn over (some) records. So close, we were!

Well, sadly, we’ve now suffered a setback that may prove fatal:

A Franklin County judge who ordered a for-profit management company to turn over records showing how it spent millions in tax dollars to operate public charter schools is now questioning whether he should even be involved in the lawsuit. Common Pleas Judge John F. Bender has suspended “all further discovery” until he determines jurisdiction.
The development is a setback for the charter schools that filed suit nearly 18 months ago challenging the authority of White Hat Management Co. — the private firm of Akron businessman and major GOP donor David L. Brennan. Last month, Bender ruled that White Hat is a public official when acting as an authorized agent of a public charter school. The designation would make White Hat subject to Ohio public-record laws, requiring it to account for the public dollars it receives, information that for years the company has been unwilling to disclose.

For years.

If the parents can’t get relief in a court, and without jurisdiction they’re not getting anything, I guess they go to the legislature. The same legislature that introduced measures last spring that could have been written by for-profit education management companies, measures that were so outrageous a transfer of public assets to for-profit education entities that they didn’t survive the most cursory public evaluation. I wish them a lot of luck with that route. I think they’re going to need it.

66 replies
  1. 1
    Baud says:

    Governments need to outsource some functions (schools can’t make their own pencils, for instance), but I see no benefit (except political) to outsourcing core mission responsibilities. Not just schools, but prisons and military and similar types of governmental functions also. I think they all eventually fail, in terms of both fiscal discipline and public policy outcomes.

  2. 2
    kay says:


    but I see no benefit (except political) to outsourcing core mission responsibilities

    Well, of course there’s a benefit. The for-profit operator has complete control of 96% of the funding. Anything they don’t spend on educating children, they keep.

    What could possibly go wrong? For them, I mean?

  3. 3
    Martin says:

    Actually ‘not for profit’ means private-sector. Most insurance companies are not-for-profits, and yet most people think of them as the most horrible examples of capitalism run amok.

    Don’t let them redefine the terms.

    Public means government or community run.
    Not for profit means private, but profits are returned to the customers, usually in the form of a dividend, rather than (effectively) go to shareholders.
    For profit means private with profits going to someone other than the customers.

  4. 4
    slag says:

    The designation would make White Hat subject to Ohio public-record laws, requiring it to account for the public dollars it receives, information that for years the company has been unwilling to disclose.

    This issue just fascinates to me. Every inch of it–selling our educational system to for-profit actors–strikes me as profoundly undemocratic in every way. All that bureaucracy that people bitch about has its drawbacks, for sure. But I’ve never been convinced that those drawbacks outweigh the benefits of public accountability. And the closer we get to a profit-driven education system, the closer and closer I get to becoming a full-fledged member of Team Bureaucracy. Go Fightin’ Bureaucrats!

  5. 5
    Gin & Tonic says:


    schools can’t make their own pencils, for instance

    Ah, but the kids can. I think Newt would recommend that as building character and allowing the little tykes to learn what it’s like to work. Think of the opportunities!

  6. 6
    Elizabelle says:

    Sunshine on this could help a lot. Good on you, Kay.

    Martin: liked the definitions. Succinct.

    OT: James Fallows has a good guest post up, by tech innovator Michael Jones (of the 0.01%) who gets the “We are the 99%” theme.


  7. 7
    kay says:


    Thanks, Martin, but those aren’t the words that are tripping them up. It’s “public” that’s tripping them up. This simply was not part of the school reform debate. School reformers need to tell people that public funds are going to management companies and executives like Brennan. They need to stop with the “merit” and “excellence” and “innovation” and tell people where their money is going.

  8. 8
    kay says:


    This issue just fascinates to me. Every inch of it—selling our educational system to for-profit actors—strikes me as profoundly undemocratic in every way.

    They’re not here yet, the reformers. We still have traditional public schools and elected school boards. I am extremely grateful for that. The more I read the more grateful I am that we have been “left behind” by the worst elements of the “reform movement”.

  9. 9
    Napoleon says:


    Isn’t the argument that the entire for-profit school structure in Ohio runs directly afoul of a provision of Ohio’s Constitution?

  10. 10
    Baud says:

    @Gin & Tonic: Newt would ship the kids to the forest to chop down the trees for the pencils.

  11. 11
    slippy says:

    I’m sick and fucking tired of our public services being looked upon as profit opportunities by PARASITES.

    That’s all I have to say about that.

  12. 12

    I made a couple a couple of weeks back that it is possible for for-profit schools to work well, and cited Sweden and Finland as examples. I was incorrect about Finland, but Sweden really is an example of such a system.

    That said, I want to emphasize that my only point is that a model that includes for-profit schools *can* work, not that I think that they do work as implemented in the US. It requires a degree of regulation and monitoring that no one here seems interested in doing.

  13. 13
    Ken says:

    @Gin & Tonic: Well, the pencil-making could open up career paths fo the little tykes. Either that, or the coal mine kid, take your choice.

  14. 14
    kay says:


    Isn’t the argument that the entire for-profit school structure in Ohio runs directly afoul of a provision of Ohio’s Constitution?

    They lost on that. If I’m reading it right, they lost because these schools are officially “non-profit”. It’s ridiculous. A purely legal distinction. White Hat controls 96% of the public funding that goes to these schools. How are they non-profit? They’re non-profit because we say they’re non-profit.

    Ordinary people know it’s a bullshit distinction. They can call it whatever they they want. If 96% of the funding is completely controlled by a for-profit actor, and it is, they’re for-profit schools.

  15. 15
    Ken says:

    @Baud: I’d add health insurance into the core mission mix.

  16. 16
    kay says:

    @Tissue Thin Pseudonym (JMN):

    It gets really amusing, in a sad way. I’m waiting for expensive private schools to start objecting, because (in California) they now have exclusive, tony charter schools within very good public districts.

  17. 17
    Baud says:

    @Ken: I agree that it should be that way, but at least with health insurance in the U.S., there isn’t an existing universal system that is being converted into a for-profit program (at least while the GOP is out of the white house).

  18. 18
    tBone says:

    If you’d come down out of your elitist egghead ivory tower for a minute, you’d realize our privatized militaries and prison systems will require a steady stream of contractors, guards and support staff in the coming years. We need public schools that will prepare students for these important careers without all of that useless namby-pamby arts and humanities crap. Or that “core concepts” and “basic skills” crap.

    By that criteria, White Hat is doing a bang-up job. I hope they can find a teaching position for John “Pepper” Pike – he seems like someone who has the proper attitude toward students.

  19. 19
    The Republic of Stupidity says:

    I don’t believe the use of the word “public” and the omission of the word “profit” in the education business is an accident. It’s marketing.

    Not unlike problems I’ve read about in the ‘organic foods’ markets

    It would appear the conservative playbook includes plans for simply taking over an institution and hogging it out from w/in, to the point where phrases like ‘public schools’ or ‘organic grains’ become meaningless…

  20. 20
    ThatLeftTurnInABQ says:


    I think this is a case where a striking visual image is needed to cut thru the terminological clutter that gets in the way of people really grasping what is going on.

    How about this for a video ad: Show a scene of happy, active children running around playing on a playground, yelling and laughing. But then one at a time, one by one, each child morphs into a big bag of money, at first running around on little chicken legs, and then just plopping down on the ground and sitting there. One at a time, one by one, the sounds of the yelling and laughter turn into the rattling of coins and the ca-ching! sound of a cash register. One by one this continues until eventually there are no children left, and no sounds except the cash register. And then grim-faced men in dark suits come and grab the moneybags, throw them into the trunk of a black limousine, and drive away leaving a quiet, empty playground, with nothing moving in it except one forlorn little swing still feebly going back and forth making a faint creaking sound, and the sound of the wind blowing through the weeds. Followed by a scroll-over with the words: What will happen to our schools when they are run by people who look at our children and see only profits to be made?

  21. 21
    Tone in DC says:

    Kay, thanks for this. It’s beyond appalling what Kasich (and others) are doing and trying to do in order to keep the gravy train going.

  22. 22
    Mack Lyons says:

    @ThatLeftTurnInABQ: Are you, by any chance, part of an advertising media group, because that’s a brilliant idea.

  23. 23

    @kay: Simply fighting reform is a losing battle and, in some ways, *should* be a losing battle. Teachers and their supporters need to start coming up with methods of being held accountable that are good rather than digging their heels in fighting reform altogether. Accountability is an essential part of democracy.

    I would also argue that the union contracts in many places are a part of the problem. The incentives they put into place for teachers are not at all correlated with what we know about effectiveness. The solution to that isn’t to break the unions, but it does require extensive renegotiation of the contracts so that incentives align properly. And yes, teachers respond to financial incentives just like all the rest of us do. They may not be trying to maximize their income in general, but they do try to maximize their income within the system in which they operate.

    One of the things I find distressing about the attacks on Matt Yglesias is that no one really listens to everything he is saying, and it needs to be taken as a whole. He isn’t trying to eliminate teachers’ unions; quite the contrary, he has argued that they should be a part of the charter schools *so long as they do so under contracts that support that mission*. He is also calling for teachers to be paid more than they are now, not less, which is the part that his fiercest critics like to forget.

  24. 24
    FlipYrWhig says:

    @ThatLeftTurnInABQ: Nicely done. Also carries a hint of Thomas Gray’s “Ode on a Distant Prospect of Eton College.”

  25. 25
    Intercalation says:

    @The Republic of Stupidity: Not really an apt comparison TRoS, given that “Organic” labeling is pretty tightly regulated and the activities that Jirah is engaged in appear to be expressly illegal. There is apparently some semantic wiggle room with respect to “public”, “private”, “non-profit”, etc. when applied to schools that allows for this kind of misleading wordplay, however.

  26. 26
    circularreasoning says:

    May I simply (and honestly) suggest these kinds of stories are a great reason to consider homeschooling?

  27. 27
    ThatLeftTurnInABQ says:

    @Mack Lyons:
    Nah, I’m just an amateur cultural historian with an interest in the visual arts and an overly active imagination. But thanks for the props anyway.

  28. 28
    Gromitt Gunn says:

    @Martin: Sorry, it is simply incorrect that most insurers are not-for-profit organizations, whether measuring “most” by sales volume or by number of entities – at least in the US. Fraternals are true non-for-profits. I suppose one could argue that Mutuals are nominally non-for-profits, but the majority are owned by stockholders, private investors, or as part of a larger holding company structure. A number of for-profit insurers do pay out some dividends to holders of participating policies, but even there, the returns to policyholders tend to be a very small fraction of overall net income, and generally are subordinate to “real” creditors.

  29. 29
    PurpleGirl says:

    @Martin: Not for profits do not return “profits” to customers, or their staffs, or their governing body. Not for profits raise the money needed to operate each year, they don’t usually carry over funds from one year to the next. I was part of a team that raised $4.5 million a year for an educational program in NYC.

    I think what you are referring to were called “Mutuals”. Many insurance companies and banks began as Mutuals but they were bought out by upper management groups and turned into for profit companies.

  30. 30
    Martin says:


    They’re non-profit because we say they’re non-profit.

    Non-profit and not-for-profit have specific meanings. They’re both defined by IRS 501(c), so whether they can call themselves either depends on whether they meet IRS rules.

    The distinction between the two is as follows:

    Non-profits are chartered, either nationally or locally, and so they exist separate from their membership.
    Not-for-profits are unchartered and only exist in the context of their membership.

    The former group are things like the Boy Scouts and Girl Scouts and the Red Cross. They’re chartered organizations by an act of Congress. Some states allow you to apply for a non-profit charter, a bit like applying to be incorporated.

    The latter group are defined by their members, so this is where things like insurance companies live. They only exist if they have members, and their responsibility is really only back to their members, not any broader group. In the former case, any excess revenues get turned into excess services. Basically, the Red Cross buys more blankets, runs more blood drives, etc. In the latter case, the excess revenues are typically returned to the members.

    Think of non-profits like charities and not-for-profits like co-ops for a shorthand. But they’re both relatively clearly defined from each other, and both VERY clearly defined from for-profits or publics because the IRS does the defining, and if the IRS is anything, they’re pedantic (sorry Yutsy).

    These schools should be in the not-for-profit category where the excess revenue gets returned to the state. Basically, they’re the sole member.

    The distinction between the two in terms of executive behavior is that broadly speaking, non-profits are more philanthropic and tend to focus much more on stretching that revenue as far as it can go. Because its stakeholder group is effectively unlimited in size and uncaptured, they focus on reaching as broadly as they can and making best use of money. They are behaviorally inclined toward efficiency.

    In the case of not-for-profits, their membership is effectively captured and in some cases highly contained (for instance, a regional insurer bounded by state regulations to that state). (Simplifying) The Blue Cross/Blue Shield provider for Wyoming cannot have more than 544,000 members, because Wyoming doesn’t have more than 544,000 people. Rather than being efficient with money, they’re behaviorally inclined to maximize membership capture, which often means being wasteful with money because things like marketing carry vastly more benefit for them than a fundraising campaign for a non-profit. If they fail to capture their membership, they cease to exist, whereas the non-profit will continue to exist because the state defines their existence, not the members.

    In short, the goal of the not-for-profit school/prison/etc is to never lose their sole member – the state. In that dynamic, lobbying is the most effective use of money.

  31. 31
    Mnemosyne says:


    Most insurance companies are not-for-profits, and yet most people think of them as the most horrible examples of capitalism run amok.

    Not to get off into the weeds on a totally different topic, but IIRC most insurance companies are now for-profits, including former non-profits like Blue Cross. Here in California, the only major non-profit health insurer I can think of is Kaiser Permanente. Everybody else — Healthnet, Cigna, Aetna, etc. — is for-profit.

  32. 32
    Lihtox says:

    How about making this a cornerstone issue of next year’s election? We can’t recall Kasich but we can swap out the legislature.

  33. 33
    The Raven says:

    Occupy the schools?

  34. 34
    celticdragonchick says:

    I am actually finishing a research paper on the creationist movement and school organizing, and I hit on the voucher/charter school thing.

    If anybody really wants to slog through twenty odd pages of this stuff, I will be posting it on scrbd in a couple of weeks.

    Good times.

  35. 35
    Veritas says:

    We spend more on primary and secondarr education per capita than any other country in the world with middling results at best. Clearly something is broken.

  36. 36
    Martin says:


    Many insurance companies and banks began as Mutuals but they were bought out by upper management groups and turned into for profit companies.

    True for some, but many are still not-for-profits. Kaiser Permanente (the insurer side) is a not-for-profit. TIAA is. USAA is. At least half of the BC/BS still are. There’s still quite a few. We don’t think of them very often because they don’t dump tens of millions in marketing out there, but in some states they carry the overwhelming majority of customers.

  37. 37
    Mnemosyne says:


    At least half of the BC/BS still are.

    Not in California, they’re not. You need to look at the percentages of the population covered by profit vs. non-profit, not just the number of companies that exist.

  38. 38
    Martin says:

    @Mnemosyne: Blue Shield is still not-for-profit. SCAN is not for profit. Almost all of the sub-regional insurers in the state are not-for-profit (CA is large enough to have sub-regional insurers).

    Yeah, there’s Anthem and the other national insurers, but many of them don’t actually cover that many people in each state. Cigna has 11 million members nationally. Kaiser has 8.7 million, most of which are in CA.

    Cigna is better known because they have broader marketing, not because they are vastly larger.

  39. 39
    Martin says:

    @Mnemosyne: Actually, technically, exactly 50% of the BC/BS in the state are still not-for-profit. BC is now Anthem and for-profit. BS is still not-for-profit.

    CA is, I think, the only market where BC/BS never merged and remain separate entities.

  40. 40
    taylormattd says:

    Kay, please forgive me for this off-topic post.

    Omg, John, have you seen the pics of Kristen Wiig in GQ? Holy crap she is smoking hot.

  41. 41
    Triassic Sands says:

    Private, for-profit insurance companies have been such a tremendous success for the US in health care, it would be insane not to duplicate that success in education.

    With any luck we may end up with parents going bankrupt because of their kids’ education costs. Sounds a lot like American heaven to me.

    I guess we can look forward to the day when Johnny’s parents won’t be worried about his reading ability, since they’ll be consumed by trying to decide between chemotherapy for Mom or algebra for Johnny. And all Mom wants is just to live until graduation day, so she can present her beloved son with his graduation present — a check to be used as a down payment on his high school loans. Poignantly, the money for the present will have come from Mom skipping a chemo treatment or two. It reads like a fairy tale.

    And we should thank Republicans, whose unerring sense of what doesn’t work has made them what they are today.

  42. 42
    gene108 says:

    What’s next?

    After stripping the private sector from servicing education, I bet these anti-American Nazi’s would set their sights on all the for-profit DoD contractors out there.

    The U.S. military, the best and most advanced military on the planet, is outfitted solely by for-profit entities, who make money from government funds.

    I don’t think these loons understand the trouble they are going to unleash on Americans and how vulnerable it will make us, if they succeed.

    /end snark(?) right-wing-rant-parody

  43. 43
    Ohio Mom says:

    @Tissue Thin Pseudonym (JMN): Yes, you are right, no one in the US is interested in well-regulated private schools. That is because the powers that are working on privatizing the schools are interested in profit, not children, and regulation only gets in the way of profit.

    There are other reasons to disregard Sweden as a model. For one, they have much, much lower levels of child poverty than we do. Some of our cities, where our lowest scoring schools are, have childhood poverty rates of around 50%; Sweden must have in the low single digits.

    The more children in poverty a school has, the lower its test scores. In fact, our schools in affluent suburbs score as well if not better than any other schools in any other industrialized countries. In effect, schools in Sweden have a temendous head start on our schools in the aggregate, so it’s not a fair comparison at all.

    Another reason Sweden isn’t a great model for us is that we have a much more diverse population and our schools are a place we all share. Private schools tend to be segregated and we don’t need anymore segregated institutions.

    I see from your other comment you are a fan of Matt Y’s views on education. May I suggest you balance and expand your views by reading some Diane Ravitch? Unlike Matt, she actually has a background in the history of education.

  44. 44
    gene108 says:


    BCBS’s largest for profit arm is Wellpoint.

    Anthem was big into self-funded plans for companies, along with Great West, back in the 1990’s, before the really big boys started buying up all the competition.

    BCBS probably has a few other for-profit divisions, but I’ve stopped paying attention to what they call themselves.

  45. 45
    HyperIon says:


    May I simply (and honestly) suggest these kinds of stories are a great reason to consider homeschooling?

    And may I simply suggest, “Let them eat cake!”

    Or perhaps one should consider private schooling.

    Reasoning FAIL.

  46. 46
    JC says:

    Hey, this is off topic, but – I’d like someone to do a thread on Obama’s threatened veto of any of the Rethug’s rollback of defense cuts, and the rollbacks of the Bush tax cuts.

    We need to PRAISE OBAMA TO THE SKIES here – if he sticks to his guns.

    This is AWESOME. By doing nothing – or threatening to do nothing, maybe even doing nothing – the real masters of the Rethugs – their donors – are going to get a huge cut in allocation of resources.

    This TPM article talks about how big a deal it is.

    If he can hold on – if he DOES hold on – this would be the biggest hit to Crony Capitalism, in DECADES.

    Seriously, if he holds fast, this is one of those things that, while deep in the numbers, flips the board, and rearranges the pieces, in a way that will have the Rethugs screaming.

    I hate to hold out hope, only to be dashed – but this would be an AMAZING win out of the debt ceiling debacle.

  47. 47
    JC says:

    If this holds – and I REALLY don’t want to get my hopes up – then Obama would be SUPREME CHESS MASTER – I GOT THIS!!

  48. 48
    JC says:

    Am I wrong? Please tell me what I am missing.

  49. 49
    Linnaeus says:


    I’m pretty confident he will stick to this. He’s in a stronger position because I don’t see the Republicans getting enough Democratic votes to push through any rollback. Stating the obvious, I know, but…

  50. 50
    gene108 says:

    @Tissue Thin Pseudonym (JMN):

    There were (are) teacher review processes in place. I remember teachers being observed by other teachers, when I was in school 20-25 years ago, so they could meet some criteria set by the school district.

    Linking pay to performance is something that is never easily done, at any occupation, at any level, at any industry.

    CEO’s pay is linked to stock prices, but that doesn’t always result in the most rational planning and a failed CEO has negotiated a Golden Parachute, when he/she signed up for the gig. You can have someone run a company into the ground and still walk away with millions. No logic between pay and performance there.

    Anyway, the biggest issue with any performance based criteria, when you aren’t looking at a profit center – such as a service department at an auto dealership, an accounting department for most any company, etc. – is how to define excellent performance. In order to this an organization must define what the department’s mission is and limit mission creep.

    Schools have a tough time defining a mission and avoiding mission creep. Everybody with an idea seems to want to push schools into doing this or that.

    I don’t see how you can expect teachers to come up with pay based performance criteria, without getting the top-down support needed to state this is the organization (school) mission and have the frozen enough that a metrics can be made around it to evaluate performance.

    Also, too if we looked, as a society, cull the underachievers and mediocre performers, who are just in it for a paycheck from the work force, the unemployment rate would exceed 50% :-)

  51. 51
    rikryah says:

    THANKS for telling us

  52. 52
    El Cid says:

    @JC: I think this might be the strongest way he put it:

    As long time readers know, it has been my contention that the key to revival of our democracy and our economy lies in radically reordering where we spend our collective resources. That more than 60% of our discretionary budget flows to the Military Industrial Complex is just the most egregious example of Crony Capitalism. If you had suggested to me last spring that a Republican House would pass a bill cutting $600 billion from the Pentagon budget over ten years, I would have called you crazy. But that is just what happened.

    It’s a strongly hopeful argument.

  53. 53
    eric says:

    Curious: If the entity is a “public official” would it have to comply with all anti-discrimination laws for its own internal workforce?

  54. 54
    burnspbesq says:

    @Gromitt Gunn:

    I suppose one could argue that Mutuals are nominally non-for-profits, but the majority are owned by stockholders, private investors, or as part of a larger holding company structure.

    Umm, no. If it’s owned by shareholders rather than policyholders, then by definition it’s not a mutual company.

  55. 55
    burnspbesq says:


    I will be posting it on scrbd in a couple of weeks.

    Ick. No likee scribd. Like SSRN much better.

  56. 56
    kay says:

    J. Michael these things seem like fads to me.

    This year it’s merit-based for teachers. The last fad was ‘a return to tradition’ which meant boring drills.

    Why are we always looking for scapegoats and quick fixes?

    How is telling kids their teachers are stupid and lazy helpful?

    I can’t imagine what some of these kids think, with this crazed and frenetic fad-chasing. They think adults are silly and useless, I bet.

    Let’s find a public education theory and commit to it. Then at least we’ll appear serious about this.

  57. 57
    burnspbesq says:

    @Triassic Sands:

    Private, for-profit health insurance works brilliantly. In Switzerland and the Netherlands. We just have the wrong business and regulatory model.

  58. 58
    Dave says:

    This is really good info, Kay. I really like hearing about all your work. Thanks much.

  59. 59
    arguingwithsignposts says:

    @burnspbesq: apart from the gawdawful website design of SSRN, exactly what’s your beef with scribd?

  60. 60
    kay says:

    Too, J Michael, I don’t want my school run like Microsoft. They’re not a product.
    They’re second graders.
    I want them to have a human being in their classroom, not a trained standardized test proctor.
    My second grade teacher played the acoustic guitar to us. How does that fit into merit based pay? 15 Miles on the Erie Canal? Where else was I going to learn that?
    We adored her. She invited us to her wedding.
    Not the reception, but still :)

  61. 61
    Gromitt Gunn says:

    @burns #54. Poor grammatical construction on my part. Hard to edit on an iPhone. By the “the majority,” I was referring to the overall population of US insurance companies. As noted, a Mutual is owned by its policy holders, by definition.

  62. 62
    Martin says:


    We just have the wrong business and regulatory model.

    Not to mention that pretty much everyone but us understands the difference between medial care and hospitalization.

    The US puts priority over making sure you or your kid can get an annual checkup without having to pay out of pocket. Frankly, that’s about the last thing that should be covered by insurance because they are relatively fixed cost items that happen regularly. It’d be like getting insurance to cover the cost of milk. It’s stupid, and just funnels money to the people in the middle of the process.

    Insurance should first and foremost cover the cost of unexpected and/or high cost items that people normally cannot plan for. I don’t know if my house will get wiped out by an earthquake, but if it does, it’s going to cost a ton, so I pay in a bit each year to offset that risk. My insurer thinks they’re collecting more than they’ll need to pay out (they think I’m wasting my money) and I think it’s worth paying a bit each year to not find me and my kids homeless at some point.

    That’s why most nations put hospitalization/major medical down as a social benefit. That’s Medicare A. Virtually everyone will wind up in the hospital and virtually everyone will cost a fuckton for that hospitalization. So everyone has to pay in, and everyone benefits. Simple. It’s like roads and armies and every other goddamn social compact. But these never work in the private sector because no company thinks they’re going to turn a profit. They are virtually guaranteed to lose this.

    It’s the part after that which can go in other ways. And this is the only place where privatization makes sense. Should you need insurance for things like check-ups, basic prescriptions (not life-saving cancer meds, but that antibiotic you need to wipe out a sinus infection), and even things like stitches and minor broken bones, etc. is up to you. Yeah, it’s going to cost, but probably not so much that it needs to be a guaranteed social compact – and it’s stupid to fight for until the item above is done. Even with a good business and regulatory model, it can still be a stupid thing to do.

    To help people understand – many people have life insurance. The purpose of that is not to be a windfall for your grieving family. If you want that, invest the money instead. Hell, invest it in an annuity and bet on other people’s death if you want, but insurance is going to cost you money on average. The purpose of insurance is to make sure that your family, absent your income, can continue to live reasonably. It’s there to pay off the house, and eliminate all of those expenses that you’ve deferred as income rolls in, income which now won’t be arriving.

    So if you’re reached a state where the house is paid off, or you have enough in savings to cover all of that, then get rid of the insurance. It’s not needed, and instead roll the cost of those policies back into savings. Additionally, if a married couple have only one income, each person should have different policy amounts. The income earner should have a large policy to offset that income. The non-income earner should have a smaller policy (or none at all) to offset their contribution to the household. In my case that’d be childcare and the like. But once the kids are old enough, that expense need not be covered and that policy can be dropped and the money used for other things.

    Honestly, the biggest problem with this whole national debate is that people have no fucking clue how insurance is supposed to be used, and how healthcare works in that context. Honestly, instead of insurance paying for your annual physical, you should have to pay for that out of pocket and those that fail to do it get a rate hike for failing to maintain their health. A model like that would significantly curtail the flow of money through insurers, lower the cost of basic healthcare by a significant degree, establish the proper incentive model for consumers, and lower the cost of insurance overall. Wouldn’t that appease everyone that isn’t primarily motivated to be pissed off at Obama?

  63. 63
    Triassic Sands says:


    No, we have the wrong corporate mindset — and it isn’t going to change.

    I’m pretty sure you’re wrong about Switzerland. From Wikipedia:

    Swiss are required to purchase basic health insurance, which covers a range of treatments detailed in the Federal Act. It is therefore the same throughout the country and avoids double standards in healthcare. Insurers are required to offer this basic insurance to everyone, regardless of age or medical condition. They are not allowed to make a profit off this basic insurance, but can on supplemental plans.

    [emphasis mine]

    This is also the way TR Reid described the Swiss system in his book “The Healing of America.” Since no one needs supplemental plans, no one needs for-profit insurance.

    And the Netherlands:

    Hospitals in the Netherlands are mostly privately run and not for profit, as are the insurance companies.

    This sentence lacks absolute clarity, but it certainly doesn’t sound like for-profit insurance plays a big role in the Netherlands either. Profit on basic insurance is pure waste and any country that uses for-profit insurers is going to guarantee higher than necessary costs (and probably sub-standard care, since sick people are unprofitable).

    From what I’ve read, your statement lies somewhere between totally wrong and mostly wrong.

  64. 64
    Triassic Sands says:


    PS If you want to enrich a relatively few people, impoverish lots of people, and provide substandard care (at least for some), then for-profit is the way to go. (Republican model, largely in place in the US)

    If, on the other hand, your goal is to insure everyone and provide excellent affordable care, then for-profit insurance companies have to go. (The evidence for this is available in numerous countries, including most, if not all, of Europe.)

  65. 65
    JadedOptimist says:

    @ Tissue Thin Pseudonym – The reasons that teachers and their unions are portrayed as being ‘against reform’ are because 1. the corporate media find it convenient to have a scapegoat, and teachers can, by ignoring what they really do, be forced into the ‘lazy public employee’ caricature, and 2. Because the companies that market tests and test prep lessons have managed to take over the discussion to the point that the common view is now that REFORM = MORE STANDARDIZED TESTS. Teachers and, by extension, their unions know that standardized tests are a lousy way of measuring real education. They correlate well with socioeconomic factors, and that’s about it.

    So if Reform = More Standardized Testing, and Teachers are against standardized testing (because they don’t measure learning), then TEACHERS ARE AGAINST REFORM!!! OMG!! THE LAZY BAHSTIDS!

    I ran across a link to an interesting website today. Most of these for-profit charter school management companies like to talk about the Miracle Schools that they run, schools that, simply by getting rid of the union and testing more, churn out kids who perform great on standardized tests. Well, not so much.

    And don’t get me started on what this approach does to high school students’ preparation for college level work, which is NOT ALL ABOUT STANDARDIZED TESTS. Kind of like life isn’t.

  66. 66
    William Hurley says:

    Yet another sad and sadly predictable outcome of the failed experiment known as “Charter schools”.

    Any “public/private” partnership is a construct that allows profiteers to divorce profitability from risk allowing them to capture the former and shunt the latter on to their “partners”.

    Diane Ravitch, for one, has been all over this among other aspects of the charter disaster for years.

Comments are closed.