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The main cost of operating a power plant is fuel, which costs you nothing if not used. Keeping a bunch of doctors (like, thousands) trained and ready to handle

by franga2000 5y ago

The main cost of operating a power plant is fuel, which costs you nothing if not used. Keeping a bunch of doctors (like, thousands) trained and ready to handle an emergency at any moment is a huge ongoing cost with a by definition low probability for a payout each year. Let's do some napkin math for my area: if you started such a company in 2008 and paid your doctors minimum wage to stand by and keep themselves trained, but not actually do any work, one such doctor would've cost you around 100k € until the start of the pandemic. I remember hearing some official on the TV saying we'd need another 300 doctors to keep everything running smoothly. Let's half that. Congratulations: your company is 15 million € in debt. Let's call it 20M € because obviously you need to make yourself at least a little rich too. So that's the bill you need to give the government in order to break even: 20M € for 150 under-trained medical personnel with basically zero work experience. Not a good business model, imo

eru 5y ago
> The main cost of operating a power plant is fuel, which costs you nothing if not used. Power plants are major capital investments. That capital has opportunity costs when it's just sitting idle. (Add in maintenance and deprecation etc.) To continue the discussion, we should have a look at the economics of peaker plants. > Let's do some napkin math for my area: if you started such a company in 2008 and paid your doctors minimum wage to stand by and keep themselves trained, but not actually do any work, one such doctor would've cost you around 100k € until the start of the pandemic. Duh. Just because you (or me) can't come up with a decent business plan in two minutes of thinking, doesn't mean none exists. First of all, I doubt any sane plan would involve paying people to sit on their hands and do nothing. I imagine, you'd pay people a basic retainer to stay ready, and probably pay for their refresher courses every so often. For some people, paying for the initial education and refresher courses alone would be payment enough to stand-by (and then a fat bonus, if they are actually called into action). Silly example: someone who otherwise works as a nanny or with kids in general might want to be able to boast that they are fully qualified as a nurse and receive regular training. (Flight attendants also usually come with some basic medical training already. And they were rather underemployed during this pandemic. So they might be good people to approach about such a retainer scheme.) Smarter people than me will probably come up with better business plans. Eg you might want to differentiate candidates by how quickly they could jump in. Being ready with 24h notice is much more demanding, than being able to be ready within a month. But the latter would still be useful, because training medical personal from scratch takes longer.
- zo1 5y ago
  One thing to also consider is that a lot of the difficulty/friction is due to regulations. There are probably all sorts of sane, reasonable, safe and exotic solutions to this problem, just like there is for supplies during disasters, but it's hampered by reactionary regulations. E.g. price-gauging laws, or in this case, "certification" for doctors and nurses.
  - eru 5y ago
    Yes. I deliberately tried not to touch on this too much, and wanted to just concentrate on the price-gauging laws. Some regulations are useful, some are insane. But going with a fine toothed comb over which is which would be too much for a short comment. The core argument that I was addressing was that somehow the private sector wouldn't be able to provide peak capacity, ergo the government would by default do a better job. Your further example of dropping the certification requirements to something sensible, perhaps at the simplest even by just allowing nurses to do more of what only doctors are allowed to do at the moment, would apply about equally well in a government hospital as in a privately run one. Similar actually for how to organise stand-by/peak duty, even down to how you pay your personnel. Main difference is that I would assume that privately run outfits would (have to) pass on the extra cost at peak into 'gauged' prices, and governments would just make the tax payer swallow the pill. (Or more likely, would also just accept doing a bad job and having a bad system in place. Especially if they ban the competition.)

eru 5y ago

> The main cost of operating a power plant is fuel, which costs you nothing if not used. Power plants are major capital investments. That capital has opportunity costs when it's just sitting idle. (Add in maintenance and deprecation etc.) To continue the discussion, we should have a look at the economics of peaker plants. > Let's do some napkin math for my area: if you started such a company in 2008 and paid your doctors minimum wage to stand by and keep themselves trained, but not actually do any work, one such doctor would've cost you around 100k € until the start of the pandemic. Duh. Just because you (or me) can't come up with a decent business plan in two minutes of thinking, doesn't mean none exists. First of all, I doubt any sane plan would involve paying people to sit on their hands and do nothing. I imagine, you'd pay people a basic retainer to stay ready, and probably pay for their refresher courses every so often. For some people, paying for the initial education and refresher courses alone would be payment enough to stand-by (and then a fat bonus, if they are actually called into action). Silly example: someone who otherwise works as a nanny or with kids in general might want to be able to boast that they are fully qualified as a nurse and receive regular training. (Flight attendants also usually come with some basic medical training already. And they were rather underemployed during this pandemic. So they might be good people to approach about such a retainer scheme.) Smarter people than me will probably come up with better business plans. Eg you might want to differentiate candidates by how quickly they could jump in. Being ready with 24h notice is much more demanding, than being able to be ready within a month. But the latter would still be useful, because training medical personal from scratch takes longer.

zo1 5y ago
One thing to also consider is that a lot of the difficulty/friction is due to regulations. There are probably all sorts of sane, reasonable, safe and exotic solutions to this problem, just like there is for supplies during disasters, but it's hampered by reactionary regulations. E.g. price-gauging laws, or in this case, "certification" for doctors and nurses.
- eru 5y ago
  Yes. I deliberately tried not to touch on this too much, and wanted to just concentrate on the price-gauging laws. Some regulations are useful, some are insane. But going with a fine toothed comb over which is which would be too much for a short comment. The core argument that I was addressing was that somehow the private sector wouldn't be able to provide peak capacity, ergo the government would by default do a better job. Your further example of dropping the certification requirements to something sensible, perhaps at the simplest even by just allowing nurses to do more of what only doctors are allowed to do at the moment, would apply about equally well in a government hospital as in a privately run one. Similar actually for how to organise stand-by/peak duty, even down to how you pay your personnel. Main difference is that I would assume that privately run outfits would (have to) pass on the extra cost at peak into 'gauged' prices, and governments would just make the tax payer swallow the pill. (Or more likely, would also just accept doing a bad job and having a bad system in place. Especially if they ban the competition.)