Commentary: Privatization Can Benefit Missouri Taxpayers

Feb 24, 2014

When I was growing up, I regularly played golf at the Forest Park municipal golf course. Later, in high school and college, I noticed that the quality of the course was improving, a lot. This happened at the same time (late 1980s) that St. Louis outsourced the management of the golf course to a private company. As that outsourcing, or privatization, of the golf course has continued, the quality of the course has continued to improve. I doubt you would find one golfer familiar with the course before and after who thinks the outsourcing of its management and operations did not significantly enhance it. 

 That same type of story is repeated throughout Missouri. Good government need not be big government, and the public sector does not have to provide public services in every case. There is a role for private delivery, often regulated, of public services in Missouri. In many cases, the private sector can deliver those services more affordably and at a higher quality than the government.  

For example, in 2002, St. Louis County’s health department pharmacy was experiencing rapid growth in spending. In response, it looked to privatize the pharmacy operations for both the county health clinics and the jail. The success of that program has been amazing.  

Once the privatization program was adopted, pharmacy services for patients of the three county health clinics improved dramatically. Instead of one county pharmacy with normal government hours, the program expanded to include hundreds of pharmacies, many open around the clock. Filling orders became easier as the new private operators quickly incorporated technology common in the private sector. Aside from service improvements, the privatization of the pharmacy saved money. In fact, as of 2012, St. Louis County was spending less on pharmacy services for the health clinics and the jail than it was a decade earlier.  

St. Louis County privatized the pharmacy program in a bipartisan, pragmatic fashion. In fact, research has shown that privatization works best when the driving force is pragmatism, not ideology. 

Politicians and voters can still debate about what services should be provided as part of the eternal debate over the role of government in our society. But privatization is more about how those services are provided, not whether they should be. Unless you genuinely believe that as many people as possible should be on the public payroll, like the big city political machines of yesteryear, then a government service that you depend upon or care about likely can be addressed with privatization.  

There are certain roles that should always belong to the government, such as police powers, and never to the private sector. Furthermore, the role of government regulation in many privatized public services is important, such as regulation of private utilities. Finally, in some instances, such as animal control, private partnerships with nonprofit groups may be preferred to for-profit companies. Whatever way you look at it, there are numerous examples, such as a private company managing the city pool in Wentzville, where privatization can provide better services at lower costs for Missourians. Just play golf at Forest Park to see the evidence.