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AWhy Medicare, Public Housing and Other Government Programs Are Out of Control--And Will Stay That Way

July 1, 2003

The reasons Medicare, public housing and other government programs are out of control and will stay that way

Last week, I wrote that government social programs as we currently legislate them would always become disconnected, out-of-touch and overrun their budget. That is not a conservative doom and gloom attitude; it is a researched conclusion. Why? It is best stated in what a business client of mine said to me a few years "Every organization is organized to get the results it gets." This is true of businesses and all other organizations, including government.

The best study I have seen for why government bureaucracies will never work is the article "The Limits to Complexity: Are Bureaucracies Becoming Unmanageable?" from the December 1977, The Futurist. The authors of the article, Duane Elgin and Robert A. Bushnell (E&B), were commissioned by the Center for the Study of Social Policy, a division of SRI, Inc., Menlo Park, California. Duane Elgin does not agree with the inevitable failure argument I make (I have never communicated with Robert Bushnell), but they both do say, "The power (i.e., using updated technology and management structures) to create large, complex social bureaucracies does not automatically confer the ability to control them." Politically, I believe their statement is too soft. At this stage in the size and maturity of the American Experiment, any federal government and most state government "solutions" create "large, complex social bureaucracies." Until we have creative alternatives, these one-size-fits-all "solutions" will fail. The biggest example is the mess our medical care system is in. It started falling apart when Medicare, a "large, complex, social bureaucrac(y)" began in the 1960's.

E&B identify the threats to our representative democracy through sixteen key characteristics:

1. The larger the system becomes, the less it can be understood. I know of no one (doctors, medical administrators, hospital executives, or Medicare users) that understands how Medicare works. Even Medicare employees feel that no one is in control. These incomprehensible bureaucracies threaten representative democracy.
2. The larger the system becomes, the more disconnected citizens. The time and effort it takes to figure out how a bureaucracy works becomes too costly, so we just back out in participating. That moves decision-making in policy from citizens to bureaucracy managers, thus reducing the representative part of representative democracy even more.
3. It becomes harder to have access to decision-makers. What access does a public housing resident have to the Secretary of Housing and Urban Development? ZERO. And the secretary makes regular decision that affects the resident's life. The resident's frustration in finding someone who will make a decision only grows.
4. "Experts" become decision makers. As the bureaucracy grows, it must bring in "experts" to decide specialized issues. But even the experts become bogged down in the complexity of the bureaucracy. The problem is that "We shall no longer be self-governing. … Rather than participating in the process of choice, we shall be accepting the choices made for us (by the experts)." A sure road to subtle, benevolent (Ha, Ha) tyranny.
5. Costs grow faster than any estimated efficiencies. We see this everyday. School systems consolidate to gain efficiencies, yet taxes keep going up and scores keep going down. The cost of Medicare today is 5-10x the estimates of 1965, it first year in existence. Email me with the name of one government program that reduced costs and shrunk in bureaucracy.
6. Improving efficiency only depersonalizes the system more. As more voice mail systems and standard responses develop, users, employees, and managers feel more and more disconnected from the system. This lack of emotional connection produces "cookbook" solutions instead of individualized solutions.
7. The alienation of citizens grows. One of the unspoken causes of low voter turnout is the feeling from citizens that it does not matter. Bureaucratic complexities only fuel that attitude.
8. The original premise for establishing the system becomes replaced by the requirements of the bureaucracy itself. The sheer size of a bureaucracy will create changes it must make that may or may not be compatible with the original premises of why it was set up in the first place. In that confrontation, the system will win out over the original premises.
9. - 16. Next edition.

At the risk of sounding a familiar claxon, all these characteristics remind me of the de-humanizing of society that George Orwell describes so well in 1984. For an historical perspective of this bureaucratic evolutionary slide away from representative government, I highly recommend Colleen McCullough's series on the fall of the Roman Republic into dictatorship. The subtle, yet "for the good of the citizenry" decisions that destroyed any representative government the Romans had, are accurately described in E&B's article. Next edition, I will explore the second eight characteristics of why bureaucracies will fail. And if space permits, I will throw out some solutions we can try that can reduce the anti-democratic aspects of bureaucracies

Sam T. Harper graduated cum laude from Vanderbilt University.  Following a tour in the US Navy and a stint as Operations Manager at Roadway Express, he earned his MBA from Stanford University Graduate School of Business.  He was a contributor to “In Search of Excellence,” the best selling business book of all time.  Sam was also Manager, Economic Planning & Analysis at Sohio Petroleum, Partner and Chief Financial Officer at investment-banking firm Bridgemere Capital, and Chief Operating Officer of the Institute for Contemporary Studies, a San Francisco Bay Area-based think tank and international publishing firm that specializes in self-governing and entrepreneurial public policy.  Sam was a chairman of the San Francisco Republican party and the GOP co-host of California Political Review on KALW-FM in San Francisco.  Sam is currently the co-owner of the Tennessee based Institute for Local Effectiveness Training, LLC – a management consulting, training, and coaching firm.