Privatization is NOT more cost efficient in many cases.
For-profit prison companies like CCA have always presented themselves as both cheaper and better than the traditional publicly owned prisons, staffed by state employees. However, from the mayhem and murders at the prison in Youngstown, Ohio, which eventually led to the company paying $1.6 million to prisoners to settle a lawsuit, to a series of wrongful death civil suits, and numerous disturbances and escapes, the authors document in detail a staggering range of failures of prison management.
failure to provide adequate medical care to prisoners;
failure to control violence in its prisons;
substandard conditions that have resulted in prisoner protests and uprisings;
criminal activity on the part of some CCA employees, including the sale of illegal drugs to prisoners; and
escapes, which in the case of at least two facilities include inadvertent releases of prisoners who were supposed to remain in custody.
http://www.alternet.org/story/17392/the_truth_about_private_prisons
Privatization generally allows scandals to be buried.
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Health Care
Our private health care system is by far the most expensive system in the developed world. Forty-two percent of sick Americans skipped doctor's visits and/or medication purchases in 2011 because of excessive costs. The price of common surgeries is anywhere from three to ten times higher in the U.S. than in Great Britain, Canada, France, or Germany. Some of the documented tales: a $15,000 charge for lab tests for which a Medicare patient would have paid a few hundred dollars; an $8,000 special stress test for which Medicare would have paid $554; and a $60,000 gall bladder operation, which was covered for $2,000 under a private policy.
As the examples begin to make clear, Medicare is more cost-effective. According to the Council for Affordable Health Insurance, Medicare administrative costs are about one-third that of private health insurance. More importantly, our ageing population has been staying healthy. While as a nation we have a shorter life expectancy than almost all other developed countries, Americans covered by Medicare INCREASED their life expectancy by 3.5 years from the 1960s to the turn of the century.
Free-market health care has been taking care of the CEOs. Ronald DePinho, president of MD Anderson Cancer Center in Texas, made $1,845,000 in 2012. That's over ten times as much as the $170,000 made by the federal Medicare Administrator in 2010. Stephen J. Hemsley, the CEO of United Health Group, made three hundred times as much, with most of his $48 million coming from stock gains.
Water
A Citigroup economist gushed, "Water as an asset class will, in my view, become eventually the single most important physical-commodity based asset class, dwarfing oil, copper, agricultural commodities and precious metals."
A 2009 analysis of water and sewer utilities by Food and Water Watch found that private companies charge up to 80 percent more for water and 100 percent more for sewer services. A more recent study confirms that privatization will generally "increase the long-term costs borne by the public." Privatization is "shortsighted, irresponsible and costly."
Numerous examples of water privatization abuses or failures have been documented in California, Georgia, Illinois, Indiana, New Jersey, Texas, Massachusetts, Rhode Island -- just about anywhere it's been tried. Meanwhile, corporations have been making outrageous profits on a commodity that should be almost free. Nestle buys water for about 1/100 of a penny per gallon, and sells it back for ten dollars. Their bottled water is not much different from tap water.
Worse yet, corporations profit from the very water they pollute. Dioxin-dumping Dow Chemicals is investing in water purification. Monsanto has been accused of privatizing its own pollution sites in order to sell filtered water back to the public.
Internet, TV, and Phone
It seems the whole world is leaving us behind on the Internet. According to the OECD, South Korea has Internet speeds up to 200 times faster than the average speed in the U.S., at about half the cost. Customers are charged about $30 a month in Hong Kong or Korea or parts of Europe for much faster service than in the U.S., while triple-play packages in other countries go for about half of our Comcast or AT&T charges.
Bloomberg notes that deregulators in the 1990s anticipated a market-based decline in phone and cable bills, an "invisible hand" that would steer competing companies to lower prices for all of us. Verizon and AT&T and Comcast and Time-Warner haven't let it happen.
Transportation
As Republicans continue to deride public transportation as 'socialist' and 'Soviet-style,' China surges ahead with a plan to create the world's most advanced high-speed rail transport network. Government-run high-speed rail systems have been successful in numerous other countries, and England and Brazil both lament industry privatization.
As a warning to wannabe Post Office privatizers, Greyhound and Trailways once provided service to remote locations in America, but deregulation intervened. The bus companies eliminated unprofitable routes, and cutbacks and salary decreases, all in the name of optimal profits, resulted in drivers working up to 100 hours a week -- a fact to consider any time each of us ride the bus.
With privatization comes automatic rate increases. Chicago surrendered its parking meters for 75 years and almost immediately faced a doubling of parking rates. California's experiments with roadway privatization resulted in cost overruns, public outrage, and a bankruptcy; equally disastrous was the state's foray into electric power privatization. In Pennsylvania, an analysis of school busing by the Keystone Research Center concluded that "Contracting out substantially increases state spending on transportation services."
Banking
The industry is bloated with deceit and depravity. Almost all of the big names have taken part. Goldman Sachs designed mortgage packages to lose money for everyone except Goldman. Countrywide and Wells Fargo targeted Blacks and Hispanics for unaffordable subprime loans. HSBC Bank laundered money for Mexican drug cartels. GE Capital skimmed billions of dollars from its customers. Dozens of hedge fund managers have been guilty of insider trading. Bank of America and JP Morgan Chase hid billions of dollars of bonuses and losses and loans from investors. Banks fixed interest rates in the LIBOR scandal. They illegally foreclosed on millions of homeowners in the robo-signing scandal.
Matt Taibbi explained to us how financial malfeasance led to the bubbles in dot-com stocks and housing and oil prices and commodities that extract trillions of dollars away from society.
This is all the result of free-market deregulated private business. The best-known public bank, on the other hand, is the Bank of North Dakota, which remains profitable while serving small business and the public at low cost relative to the financial industry.
Prisons
One would think it a worthy goal to rehabilitate prisoners and gradually empty the jails. But business is too good. With each prisoner generating up to $40,000 a year in revenue, it has apparently made economic sense to put over two million people behind bars.
The need to fill privatized prisons has contributed to mass jailings for drug offenses, with African Americans, who make up 13% of the population, accounting for 53.5 percent of all persons who entered prison because of a drug conviction. Yet marijuana usage rates are about the same for Blacks and whites.
Studies show that private prisons perform poorly in numerous ways: prevention of intra-prison violence, jail conditions, rehabilitation efforts. Investigations in Ohio and New Jersey revealed a familiar pattern of money-saving cutbacks and worsening conditions.
Education
The notion that charter schools outperform traditional public schools is not supported by the facts. An updated 2013 Stanford University CREDO study concluded that privatized schools were slightly better in reading and slightly worse in math, with little difference overall. Charter results have shown an improvement since 2009.
An independent study by Bold Approach found that "reforms deliver few benefits, often harm the students they purport to help, and divert attention from...policies with more promise to weaken the link between poverty and low educational attainment."
Just as with prisons and hospitals, cost-saving business strategies apply to the privatization of our children's education. Charter school teachers have fewer years of experience and a higher turnover rate. Non-teacher positions have insufficient retirement plans and health insurance, and much lower pay.
If big money has its way, our children may become high-tech symbols and objects. Bill Gates proposes quality control for the student assembly line, with video footage from the classrooms sent to evaluators to check off teaching skills.
Consumer Protection
Warning signs about unregulated privatization are becoming clearer and more deadly. The Texas fertilizer plant, where 14 people were killed in an explosion and fire, was last inspected by the Occupational Safety and Health Administration (OSHA) over 25 years ago. The U.S. Forest Service, stunned by the Prescott, Arizona fire that killed 19, was forced by the sequester to cut 500 firefighters. The rail disaster in Lac-Megantic, Quebec followed deregulation of Canadian railways.
http://www.commondreams.org/views/2013/08/05/8-ways-privatization-has-failed-america