The business community is atwitter at what they are calling “the largest office deal in recent years.” The purchaser of this office space is none other than Blue Cross, the insurance company and the deal was consummated due to the new health care law commonly known as “ObamaCare.”
Said Scott Whitefield of the transaction, “It’s a great experience when you can connect a top-of-the-line tenant with a top-of-the-line landlord.” “It’s a great opportunity for Albuquerque and shows that there are opportunities in the health care market.” The local NAIOP chapter is holding an event on Monday the 23rd, the title of which is “Healthcare…a catalyst for real estate development in New Mexico.” Sounds like this is a real winner for New Mexico’s economy, right? Not so fast.
For starters, as Dr. Deane Waldman (a health care analyst for the Rio Grande Foundation), bureaucracy is the “greediest of all players in health care.” Note that Blue Cross is not hiring a single doctor or treating a single patient at their new 85,000 sq. ft. office. The considerable number of people hired to work in those offices will be bureaucrats. They may technically work in the private sector, but they are bureaucrats nonetheless.
Also, while record-keeping and proper accounting are essential to the operation of any business, is there anyone who believes that the insurance companies don’t already have enough bureaucrats working for them? The reality is that these workers create nothing and are largely destroyers of economic value. This tendency in health care is not limited to ObamaCare, but has been the trend in US health care for decades as we’ve moved away from the doctor-patient relationship towards a third-party payer system.
So, the reports may indicate a temporary uptick in Albuquerque’s office market, but that is just a classic case of the seen vs. the unseen. We may see this occupied office and be pleased, but we are not seeing the foregone private activity that could have generated real wealth and prosperity had the government not taken those funds.
And, as if this were not all enough waste, we have heard that a local, non-union contractor that had attained the low bid on the Blue Cross project was summarily replaced for unknown but obvious political reasons on the job in favor of a far more costly union contractor. While a private company certainly has the right to hire whoever they may choose, how much of Blue Cross is actually “private?”