The Post Office Comparison

Tuesday: President Obama addresses an audience in New Hampshire on health care (Reuters).

One of the most hotly debated parts of President Obama's plan to change health care in America is the so-called "public option."

Opponents of the public option regard it as a government-subsidized, government-administered program that will, eventually, drive private companies out of the insurance business. Supporters of the idea describe it as a way to insure that every American has the ability to access the healthcare system and that forcing the private insurers to compete with the public program will keep them honest by providing "real competition."

Who's right? Well, fortunately for all of us, there exists a real world parallel that may help us to better evaluate the potential ramifications of the public option for health care and for private insurance. It's called the United States Post Office, which has to compete with United Parcel Service ("Big Brown"), Federal Express, DHL and other "overnight" carriers and, with ever increasing frequency, e-mail as the message and media delivery system of choice for the American people.

Now, according to the supporters of the president's approach to health care reform, mail delivery in the United States should be on a more or less a level playing field, with the U.S. Post Office (the "public option") providing real competition to its private sector competitors. But we all know this is not the case; even President Obama, who said Tuesday in New Hampshire "If you think about it, UPS and FedEx are doing just fine, right? No, they are. It's the Post Office that is always having problems."

The president is, at least in this case, correct. The Post Office is always having problems, like the fact that it consistently runs over its budget, it has an upward-spiraling debt lode that is nearing is statutory debt limit over the same period of time that the price of a stamp has risen by 33 percent over the last ten years.

It's not surprising that, according to the American Customer Satisfaction Index, the U.S. Post Office received an average customer services rating of 74 percent while its two main private competitors, FedEx and UPS, received scores of 84 and 82 percent respectively.

Oh yeah. One more thing: The government has "rigged the system" in the Post Office's favor.

Under federal law the Post Office is the only entity allowed to put anything -- first class mail, periodicals, commercial flyers or even personal notes to friends -- through a mail slot or in a mailbox, which for years provided them a competitive advantage over, let's say local delivery services. The Post Office also will not allow private carriers to deliver anything to an official USPS Post Office Box.

UPS, FedEx and the other "express mail" companies have to pay taxes on the money they bring in the door, on their planes, on their trucks and the rest of their property. The Post Office doesn't. And, unlike its private competitors, the Post Office gets bailed out, from time to time, by the U.S. taxpayers -- although, thanks to the Obama approach to General Motors and Chrysler, public bailouts of private corporations may become more common in the future.

On parcel and express mail services, the USPS sets a mandatory minimum price that a private shipper can charge and it is mandated by law to be higher than what the USPS charges. It also does everything it can to regulate, raise prices and make things less convenient for consumers who want to use private parcel shipping and mail delivery locations -- in effecting trying to make the Mail Boxes, Etc. model function more like, well, more like the Post Office. And with all that, with all those comparative advantages built into the system on its behalf, people still don't like the Post Office as much as FedEx and its still hemorrhaging money.

It is not at all a certainty that a government-influenced "public option" health care system would function exactly like the Post Office. But it's fair to say the comparison raises some fair questions that need to be answered regarding how such a health care system would function compared to the one we have now; questions that need to be answered before legislation is voted on and before the new system becomes law. And it was President Obama, in his remarks in New Hampshire, who invited that comparison.