I ran across this excellent column from Jonah Goldberg awhile back. Simply put, while China is to be applauded for adopting freer markets that have helped bring hundreds of millions of people out of poverty, the United States is still in a better position, especially when it comes to living standards.

Certainly, China has surpassed the US in SOME aspects of economic freedom, but, as the Heritage Foundation’s annual rankings show, it has a long way to go. As Goldberg notes, however, the left in particular seems to have a China fetish when it comes to government planning and “green” subsidies.

The major problems in the US are over-spending and over-regulation, but they pale in comparison to those of governance and basic freedom in China.

The fact is that government pension reform is essential if New Mexico is going to survive economically. The commitments that have been made by our state (and other states) were never viable because they were political, not economic decisions. The Rio Grande Foundation has been a leader in pointing this out here and here, for example. Also, check here for an outrageous case-study.

While Wisconsin Gov. Scott Walker has been a national lightning rod for the unions, but Rhode Island, a liberal state controlled by Democrats may provide New Mexico’s liberal politicians with both a model and a cautionary tale. This report on the reforms enacted in Rhode Island was enlightening to say the least.

While unpopular with government employees who seem to believe every promise, no matter how unbelievable, Rhode Island’s political leaders understood that the state was on its way to insolvency if something was not done. And, unlike many New Mexico Democrats who seem to believe that higher taxes are a panacea, Rhode Island’s made tough, sometimes unpopular decisions, in the wake of opposition from one of the best-funded, best-organized special interests around (government employee unions).

So, kudos to Rhode Island and my fellow New Mexicans, it is time to get serious pension and benefit reform!

I co-authored an article on NMPolitics.net on our efforts to better understand what taxpayers are spending their money on in terms of higher education. Check it out here.

Our full report on the issue can be found here.

Last legislative session, Gov. Martinez led the charge (along with Rep. Dennis Kintigh) to restrain and reform New Mexico’s film subsidy program. The cause was helped by the myriad scandals (and here) and shady bookkeeping around the nation.

Well, film subsidies, though reduced, haven’t gone away. And that means that scandals are still happening as well. Here is a story about a filmmaker in Massachusetts that was indicted on 10 counts of making false claims and larceny after receiving $4.7 million in tax credits from the state, according to the attorney general’s office.

Interestingly-enough, the program in Massachusetts appears to be quite similar to that offered here in New Mexico with filmmakers receiving a 25% rebate on all “eligible” expenses.

While eliminating the program in its entirety is probably not realistic, I’d like to see efforts to gradually wean the filmmakers off of the taxpayers’ teat over time.

We at the Rio Grande Foundation don’t believe in telling people how to live their lives. To this end, we tend to stay out of most social policy issues. But, sometimes statistics just scream for attention.

Take this recent story. According to the story:

“What’s the best way to improve your chances of finding someone to put a ring on it? Stay in school and get rich:

Fifty years ago, 72 percent of those who never went to college got married, which was just 4 percent less than rate for those who did. Today only 48 percent of those with a high school diploma or less get married, but for college graduates the rate is 64 percent.

Furthermore:

According to the Bureau of Labor Statistics, the median weekly earning of someone with a college degree is $1,140 — nearly double that of someone who only graduated from high school. (Also, 24.8 percent of Americans have college degrees today, that’s more than twice the number 50 years ago.) Not only does income increase the amount of marriage, marriage also increases the amount of income. Married people tend to earn more and also benefit from economies of scale — sharing the costs of housing and utilities for example.

So, what’s the takeaway? First and foremost, when those dreaded 99%ers start talking about inequality, they might want to look in the mirror first to better understand why income inequality may be growing. Also, perhaps if the poor and low income folks took the institution of marriage more seriously and stuck with it, they’d be better off economically. Lastly, marriage (like getting an education) requires commitment. It only makes sense that people who are more successful at one are also more successful at the other.

What can government do? A good start would be to reduce dependency on government programs that give people the incentive to rely on government rather than friends, family, and their spouses.

The federal Fish and Wildlife Service is collecting comments on the Sand Dune Lizard in southwestern New Mexico. The listing information can be found here and you can click here to submit your comments (I have done so).

Rep. Steve Pearce has been a leader on this issue on behalf of New Mexicans concerned about the economy and their way of life. Plenty of information on the lizard is available, but Pearce has an excellent synopsis here.

Sat down with Mike Jaxson of KSVP Radio for an episode of “This week in Chaves County” to discuss 2011 and look forward to what we should expect in 2012. Check out the 10 minute interview here.

Recently, a series of letters to the editor responded (mostly in a hostile fashion) to an op-ed published by Dr. Deane Waldman. Read the letters in their entirety (and a response by Dr. Waldman) below:

LETTERS TO THE EDITOR
Faith in Regulation
RE: DR. J. Deane Waldman’s op-ed (“Government Drives Up Health Care Cost”): … First of all, Dr. Waldman should leave his politics out of the discussion regarding health care costs. He quotes a Heritage Foundation spokesman, and he is an adjunct scholar with the Rio Grande Foundation, both very conservative think tanks. When he quotes that 40 percent or $1 trillion in 2010 just disappears in money spent for health care, there’s no reference to where that number comes from.
I would like to quote some numbers that do have a credible source. The Centers for Disease Control and the Institute of Medicine have reported between 100,000 and 135,000 deaths annually due to hospital and doctor error. Based on those numbers, it’s hard to argue for less regulation. The free-market approach to health care hasn’t worked, so to blame government for all its cost problems is factually not true. I would recommend that Dr. Waldman read T.R. Reid’s recent book,”The Healing of America.”
On a personal note, I have over 45 years of experience as a heath care advocate and also lost two sons due to the lack of health care regulations being enforced. We don’t need less regulation.
RICHARD J. VALDEZ Albuquerque

Don’t Believe the Hype
A RECENT LETTER by Dr. J. Deane Waldman, “Government Drives Up Health Care Cost,” perpetuates many of the myths and scare tactics that have long been advanced by those against health reform and consumer protections.
The U.S. Department of Health and Human Services (recently) released its long-awaited rules that will require insurance companies to spend at least 80 percent to 85 percent of their revenue on actual patient care, a big win for consumers and patients alike, many of whom are now covered by plans that Dr. Waldman correctly notes spent as much as 40 percent of revenue on nonpatient expenses, without any accountability to their patients or the public.
Earlier this year, the Centers for Medicare & Medicaid Services noted that more than 100,000 New Mexico Medicaid recipients had received free preventive care services thanks to the Patient Protection and Affordable Care Act, and increases in health care costs were held to new 10-year lows. Up-front preventive care keeps thousands of New Mexicans out of hospital emergency rooms every year, and that saves taxpayers big money.
In the same edition of the Journal , the Career Section ran a piece highlighting the need for more health care providers to tend to the greater number of people already receiving health care. The Dec. 6 Journal ran stories highlighting the benefit to more than 18,000 students who received primary and behavioral health care from schoolbased health centers funded in part by the ACA and new provisions of the act that will help to integrate and modernize patient medical records to prevent records mix-ups and malpractice claims.
As the nation and state move forward in implementing provisions of the act, we have a responsibility to set aside divisive political rhetoric and focus on the progress New Mexico is making in creating healthy families thanks to greater access and transparency in our health care system.
RAYMOND SCHALL Bernalillo

The Dangers of Dogma
RE: OP-ED by Dr. J. Deane Waldman, adjunct scholar, Rio Grande Foundation:
The public policy “contributions” in the Journal from the Rio Grande Foundation are so consistently flawed and so predictably fatuous that they are cold comfort to those of us interested in civilized and informed debate.
The trouble this time, argues a Rio Grande acolyte, is that the government — always bad — has a unseemly hand on the cost of health care in this country. The villain of course is the country’s new Patient Protection and Affordable Care Act —“Obamacare” — and the crime is the desultory effect of policy intervention on the free-market cost of health care services. The real problem I would argue is that the “free-market” libertarian apologists of the Rio Grande variety are simply unwilling or unable to think about “us” in the plural in any constructive way. Any common and legitimate goals we might have as a society must pass their inane free market test. If the country were being ravished by a plague killing everything it its path, should we, the people, the government, mount a coordinated and concerted intervention? No, they would have to argue — to be consistent — let the free market figure it out. Is there any point in having any constructive ideas about the direction of the country and the health and welfare and future of its citizens? Not really; the free market will figure it all out!
Our common purse — government resources — fields a military, explores space, helps build highways and, yes, invented the Internet. In the same way, our government is in a unique and powerful position to establish rules for the private sector that bend the cost curve on health care and provide a level of coverage available to almost all citizens of the developed world except those in the United States. A stopped clock is right twice a day, but cross Rio Grande off your mustread list: The free market tooth fairy clouds their thinking about even the most basic human needs.
DOUG BYERS Albuquerque

Here is Dr. Waldman’s response:

Healthcare Dialogue, At Last! Thank You.

Deane Waldman MD-MBA is the author of “Uproot U.S. Healthcare.”

Thank you, Albuquerque Journal. Thank you, people. We have taken a first, admittedly tiny, step toward actually fixing healthcare in this country. That first step is discussion, dialogue, discourse, debate, and certainly difference.

In the Journal of 12/4/11, I wrote about how the costs of healthcare were in, not “out of,” control. I wrote that the government was the controller as well as biggest consumer of our healthcare dollars rather than We The Patients and the people who provide health care.

Obviously, people responded to that article. I write obviously because the Journal printed three responses on 12/17/11 probably out of a much larger number. Though the comments are opposed to what I wrote, I deeply appreciate them. As I have written repeatedly in books, articles, and online, the necessary first step to fixing healthcare is people talking with other people.

In keeping with the concept of dialogue, let me respond to the responders.

The Centers for Disease Control and the Institute of Medicine (IOM) are credible sources of data. But so are the Cato Institute as well as the Heritage and Rio Grande Foundations. Just because one may tend toward your political persuasion and another leans in the opposite direction is unimportant. What matters is the validity of data and correctness of conclusions.

The IOM estimated that 98,000 or more Americans die avoidably during medical treatment annually. This is, of course, unacceptable. Unfortunately, the writer, like Samuelson in his “out of control” costs article, leaps directly from symptom identification to treatment, urging additional government regulation.

In the medical world, this is called malpractice. You must first diagnose the cause of the patient’s illness before recommending therapy. WHY are people dying needlessly? Determine that, with evidence. Treat it.

One writer reported that his two sons died from lack of regulation. I would love to see the evidence proving this assertion. Further, I would welcome hard evidence that regulations actually protect us, and that such protection is worth the expense.

My evidence to the contrary includes the increased error rate due to information security regulations, the successful infection checklist from Michigan that was banned for not following NIH guidelines, and my personal experience of being “out of compliance.”

Every few years, the Joint Commission (On Accreditation of Hospitals) performs a review to assure regulatory compliance, presumably to confirm that We The Patients are being protected. Do they check patient outcomes? Do they suggest ways to improve such outcomes? Several years ago, I was found “out of compliance.”

What was I doing wrong that was harming patients? Did I do unnecessary, risky procedures? Was I doing catheterizations improperly? Were my diagoses consistently wrong? Did I operate while intoxicated? I was out of compliance – seriously, I couldn’t make this up – for: a) having books too tall in my office, and b) using a doorstop. Is that how regulations the patients? Is that a wise use of our healthcare dollars?

I did not write that insurance plans spend 40% of their dollars on non-patient expenses. I do not know how much money insurance companies use for administration and keep as profit. That is closely held, proprietary information. I only observe that the highest paid CEO in America in 2010 was the head of UnitedHealth Group, receiving $101.96 million in direct compensation alone, not counting other benefits. You do the math.

The 40% of healthcare dollars “not going to health care” that I reported was a simple calculation that anyone can do. Add up, as I did, all the money going to anyone who cares for a patient whether by service or by producing a product (wheelchairs, pills, apnea monitors, etc.). Subtract that total from the amount published by the GAO that the U.S. spends every year on healthcare. The difference is 40%.

Of course, anything that gets people preventative or earlier sickness care, and puts them in doctors’ offices or their homes rather than ERs is good. It makes people healthier (less sick), and it costs less both short term and in the long run. But how can you say that the PPAHCA provides “free care” when it is slated to cut Medicare reimbursements to physicians – and therefore patient services – by 27%, not even the 21% I previously cited?

The basic point of my 12/4/11 article is that PPAHCA steals money from health care, the service, and gives it to healthcare, the system. Can anyone show me evidence that it does the opposite? If implemented, PPAHCA hurts both We The Patients and our nation.

Another responder to my 12/4/11 repeatedly derided the “free market.” I do not care about passing or failing some litmus test as a free marketer. I am only interested in results, specifically a healthier America and healthier Americans. Any system that totally disconnects the consumer from his or her money for consumption fails. Look at what is happening in Canada, Great Britain, Greece, Italy, and Spain. The reason I want some free market forces, some reconnection, is this. Capitalism and market forces have been proven to produce the best for the most at the least cost, instead of an equal sharing of the misery, to paraphrase Winston Churchill, Margaret Thatcher and others.

I welcome a continuation of this dialogue. I implore others to speak up, not only here, but at town hall meetings such as the one sponsored by the Rio Grande Foundation on December 8, 2011. Only when We The Patients in our hundreds of millions, communicate, argue, debate, and finally get to some form of consensus on basic principles for healthcare, only then can we begin to fix our sick system.

With the Iraq War finally over, it is time to take account. Whether you supported the War or not on principle, it is worth noting that the Iraq War’s costs to the US economy were not trivial. The latest estimate is that the War added $1 trillion to the US debt. I would expect that number to rise as the costs of caring for vets is still to come.

Also worth noting is that the US unemployment rate was a mere 5.9% back in March of 2003 (the month the war started). Notably, the onset of the Iraq War ushered in an era of dramatic increases in overall federal spending and debt.

So, am I saying that the Iraq War led us to our current economic condition? No, not by itself, but conservatives need to realize that war is a government program and an expensive one at that.

Recently, the National Forest Service announced that the Capulin Snow play area in the Sandias would be open for only 3.5 hours per week. The problem, of course, is supposed federal budget cutbacks. I don’t understand how you can’t afford to hire some minimum wage, temporary help to stand around and supervise a bunch of sledders for a few months when the budget has doubled since Clinton’s last year in office, but that’s another story.

Leaving all that aside, however, what if the bureaucrats at the National Forest Service got creative (ha, ha, creative bureaucrats, I know) and outsourced management of the play area to a private company for the winter? People who want to bring their kids to sled ride or play could pay $1 a head and more than pay for the necessary staff. Similar ideas have worked at parks elsewhere as our friends at PERC (the Property and Environment Research Center) have pointed out.

With all of the federally-funded boondoggle programs out there (ostensibly for the children here and here), it is high time for the feds to leverage the private sector to get our kids out of doors in the mountains.

Sometimes, the title of a newspaper article doesn’t convey the content of a particular article. In the case of “House Builders Want Profits, Not Communities” which appeared in the Albuquerque Journal and was written by a local architect (more on that later), it certainly did. The entire article was a rant about Americans being “fat,” “lazy,” “only interested in the short term,” and simply needing to be told what is best for them.

I am no expert on building codes, but I can tell a control freak from their writing and the author of this piece is definitely one. Not surprisingly, the driving force behind the Albuquerque building code is/was Isaac Benton who just so happens to be an architect.

If you don’t like condescending jerks and you do like saving money on new buildings and houses, tell your City Councilor to support repeal of the current building code and replacement of that code with the “International Energy Conservation Code” or show up at the City Council meeting on Monday, January 19.

(Albuquerque) Florida Gov. Rick Scott recently made headlines around the country when he argued that institutes of higher education in his state of Florida should prioritize funding for the study of science and technology in the his state’s institutes of higher education.

Said Scott, “If I’m going to take money from a citizen to put into education then I’m going to take money to create jobs…so I want the money to go to a degree where people can get jobs in this state. Is it a vital interest of the state to have more anthropologists? I don’t think so.”

One may agree or disagree with Scott’s statement, but prioritization of limited resources is essential. In order to better understand how those resources should be allocated in higher education in New Mexico, the Rio Grande Foundation undertook an effort to survey members of the boards of regents of the state’s six public senior universities on their views of their schools’ mission statements. Unfortunately, poor returns – only 26.7% of the regents responded – seem to indicate that many of the people responsible for leading these institutes do not take their mission statements seriously.

Said Pat Leonard an adjunct fellow with the Foundation and the lead author of the new Rio Grande Foundation report “Are Mission Statements Mere Window Dressing in New Mexico?,” “The regents are political appointees charged with the guidance of New Mexico’s public universities. As such, we expected far more enthusiastic participation and willingness to share views on their institutes’ mission statements. Unfortunately, this was not the case.”

Rio Grande Foundation president and co-author of the report noted that, “Without a clearly-stated mission, policymakers are left to judge for themselves whether New Mexico’s higher education institutions are achieving their goals or not. In times of constrained budgets, it is more important than ever to have a clear understanding of what these schools are attempting to achieve.”

The full report is available online here.

A sample survey containing the questions that were sent to each regent can be found here.

Canada has abandoned the Kyoto Protocol on global warming. According to the aforementioned report, Canada will save $14 billion in penalties for not achieving its Kyoto targets — targets that other nations in the Kyoto agreement seem unlikely to reach as well.

This decision by our neighbors to the north further begs the question as to why New Mexico would cap its own carbon emissions when the shift seems to be heading in the opposite direction.

Also, it continues the move by Canada towards economic freedom and away from socialism and big-government as illustrated in the Heritage Foundation’s Index of Economic Freedom. Yes, Canada has socialized health care which means that 1) American medicine isn’t that far from socialism already 2) Canada must be pretty damn free market outside of the health care sector.

Of course, Canada very much wants to produce oil from its tar sands. If Obama wanted to create jobs, he could have done so with the stroke of a pen by approving the Keystone XL Pipeline. Oh, and, at 7.4 percent, Canada’s unemployment rate is still significantly lower than the US rate of 8.6 percent in the US.

Seems like one country is moving in the right direction and the other is moving in the wrong direction!

As mentioned in recent postings, the Rio Grande Foundation recently hosted a screening of the film “Sick and Sicker” and then had a discussion of health care issues and health care reform led by Dr. Deane Waldman.

Dr. Waldman led the 50 or so attendees in a discussion and here are his notes and responses to the many issues that came up. If you do not live in the Albuquerque area and were unable to attend, keep an eye on this space as we will be hosting other, similar events in the New Year.

(Albuquerque) Recently, a report called the “Trial Urban District Assessment” (TUDA) was released (see charts here). The report compared student scores on the National Assessment of Educational Progress (NAEP) in 21 urban school districts including Albuquerque. The Rio Grande Foundation and others have used New Mexico’s poor performance on the NAEP to argue for education reforms.

APS Superintendant Winston Brooks, upon release of the report, was quoted in the Albuquerque Journal as being “pretty ecstatic” about data showing that APS was “about average” compared to the 20 other cities in the report.[1] Brooks went on to say, in a press release on the report that, “These results are encouraging because they show that APS is doing at least as well, and in several cases better, than many of the nation’s urban school districts facing similar educational challenges.[2]”

But how similar are they? According to a Rio Grande Foundation analysis of the data (using US Census numbers), the families of students in APS are wealthier than 17 of the 20 districts analyzed in the TUDA report. In some instances, districts mentioned in the report had poverty rates more than two times that of APS.[3]

“Interestingly-enough,” noted Rio Grande Foundation President Paul Gessing, “students in Miami-Dade, which of course has followed the ‘Florida Model’, brought to New Mexico by our Foundation, out-performed APS despite having higher poverty numbers.”

Gessing continued, “Poverty should not be a deciding factor in whether a child is educated or not. That is we have long argued for educational choice and reforms emphasizing accountability. Nonetheless, the worst possible conclusion to draw from the TUDA data is that administrators, parents, and legislators should be pleased because APS students are performing as well as their peers in other major cities, when in reality the students in these cities are in a state of poverty far worse than our own.”

This chart shows where APS is in terms of poverty relative to the other school districts mentioned in the report and which ones outperform APS on 4^th grade reading.

[2] APS Test Scores Comparable to Big Cities, December 7, 2001, http://www.aps.edu/news/aps-test-scores-comparable-to-big-cities

[3] US Census Bureau “Small Area Income and Poverty Estimates”: http://www.census.gov/did/www/saipe/district.html

I find columns like this recent one in the Albuquerque Journal which urges retailers and other chain businesses to look to Southwest Albuquerque especially frustrating. The author complains that chains like Flying Star and Weck’s are overlooking his neighborhood.

Leave aside people like our esteemed Senator Tom Udall who believes that we should all support “small businesses.” Presumably, this eliminates chains like Flying Star and Weck’s, and it most certainly eliminates Lowe’s (another retailer the author complains about not having).

But, if there are so many great business opportunities in Southwest Albuquerque, why doesn’t the author and some of his friends and neighbors gather some money and start their own business? That is, after all, how most of these big chains became big. Someone at some time decided to quit complaining and put their money on the line to start something they believed in. It is the entreprenurial spirit that made this country great and it is this mind-set, not that of whiners and “Occupiers” that is going to get us back to prosperity.

Of course, when you do succeed and people come out in droves to oppose you, it might make you think twice about wanting to start that business in the first place.

Just in time for the upcoming 2012 legislative session, a new scientific poll from the Friedman Foundation for Educational Choice shows that large majorities of New Mexicans endorse school choice. A press release on the polling data can be found here. More details on the poll itself can be found here.

62 percent of surveyed voters in New Mexico support proposals similar to those that have been introduced in the New Mexico state legislature to offer individuals and corporations tax credits for donating to nonprofits that distribute private school scholarships.

78 percent of New Mexico voters polled support a tax credit program providing special needs students with private school scholarships.

65 percent of New Mexico voters rate their public school system as “Fair/Poor” compared with only 32 percent rating it as “Good/Excellent.”

I was asked to help shed some light on issues relating to the Sunport’s observation deck which was a controversial Mayor Marty project in the 1990s and is currently closed for repairs. Check out the article here and the video here.

As Rob Nikolewski of Capitol Report New Mexico pointed out recently, Medicaid is going to gobble up an ever-greater share of the State budget absent reforms. Of course, the left-wingers over at Voices for Children never met a budget cut they could get behind, so they have opposed efforts to rein in Medicaid spending at every turn.

We, at the Rio Grande Foundation, on the other hand, have repeatedly pointed policymakers to various ideas that could slow the growth in Medicaid without harming care quality. Long term care insurance is particularly ripe for reform. Ironically, it is relatively wealthy seniors who use planning techniques to stick taxpayers with the bill for long term care.

The following chart from our friends at the Washington Policy Center illustrates who receives Medicaid and where the costs are:

Medicaid Recipients by Category and their Per-Person Costs for FY 2005
Category               % of Total Recipients               Cost per Recipient/Year

Children                 51%                                            $1,667
Adults                    24%                                            $2,475
Aged                         9%                                            $13,675
Disabled                  16%                                           $13,846

Certainly, it would be nice to have an Administration in Washington that was serious about making Medicaid a sustainable program, but this one is too busy expanding the program and both parties have been ignoring the problem for years.

Maybe the economy IS turning around. In addition to the opportunity to lead the new Americans for Prosperity chapter in New Mexico, the transparency group Foundation for Open Government (FOG) now has a job opening for an executive director as well. The Rio Grande Foundation has frequently worked with FOG to pry government documents out of the bureaucracy and into the sunlight.

For more information on the job with FOG, go here.

The Rio Grande Foundation has been working to promote and illustrate the benefits of “virtual education.” But what does the term mean? Any time a school uses a computer could be viewed as “virtual education,” but to us it is far more revolutionary than simply placing a computer in the classroom. The power for virtual education is that it can change the way an education is delivered in terms of empowering students and allowing the classroom to be “flipped.” That means that the traditional teaching is largely done outside of class while the tutoring is done in the classroom.

One important virtual education model is called “blended learning.” The following short video explains how virtual learning can work in different classroom settings:

The Fundamentals of Blended Learning from Education Elements on Vimeo.

With all the talk of the 99% and income disparities in the United States, one might think that there would be some empirical evidence that less inequality would automatically be a good thing. The reality is that greater inequality may actually be a good thing for the so-called 99% (or at least the bottom 50%).

Check out this chart. The data are income data from the Tax Foundation (which took its data from the IRS). And, from the looks of things, income inequality in 2009 was about where it was back in 2001. During the intervening time period — an economic boom of strong income growth and low unemployment, by the way — inequality between the top 1% and the bottom 50% rose dramatically.

Why is this? The fact is that when the economy booms, the wealthy are in a better position to make more money. As the saying goes, “it takes money to make money.” When the wealthy buy boats, more middle and working class people are hired to build those boats, sell them, and maintain them etc. When the economic crisis hit, all Americans took a hit, but the very wealthy actually took a harder hit than the rest of us.

In the Journal of Nov. 28, economist Robert Samuelson claims that health care costs are “out of control.” Quite the opposite: They are totally in control – by the government.

That is a problem.

Health care refers to goods and services delivered by hospitals and providers to be consumed by patients. Costs to providers and institutions are driven more by government regulation and bureaucracy than by labor costs or MRI machines. Meanwhile, payments to providers and institutions – what Samuelson calls “costs” – are controlled by government.

Note that when the Patient Protection and Affordable Care Act (“Obamacare”) cut “Medicare costs” by 21 percent, they cut Medicare payments to providers. Therefore, they cut services to patients. As Robert Moffit of the Heritage Foundation testified before Congress, “you cannot get more of something by paying less for it.”

Meanwhile, the spending on – the costs of – the federal health care bureaucracy went up by six whole new agencies, hundreds (thousands?) of bureaucrats added to the payrolls, and multithousands of new rules and regulations.

So the government controls and increases spending to/on itself, while it controls and decreases spending on patients.

Want proof? Of all the money spent on “health care,” 40 percent – that is over $1 trillion in 2010 – disappears. It goes to health care but provides no care.

That statistic is before adoption of the health care act, which could raise the disappearing dollars to half of all health care spending!

Samuelson goes on to use the recent Office for Economic Cooperation and Development report to explain U.S. overspending: steep prices and abundant provision of expensive services. Hogwash! As Samuelson knows, “price,” also known as charge or bill, is meaningless in health care, meaningless in terms of what gets paid.

As a doctor, I can charge whatever I like for a cardiac catheterization in a baby. The actual bill can read $2,000, $4,000 or as is commonly true, over $5,000. Regardless of my “price,” I get paid $387. That is what the government pays. So the price may seem steep, but the payment is peanuts.

For Medicare, just like for my caths, payments are now lower than the cost-of-staying-in-business. So if you want to know why you can no longer see your Medicare doctor, it is because the more Medicare patients she or he sees, the quicker the doctor goes broke.

The prices may seem out of control or steep, but payments to providers are tiny and shrinking.

How much of the true cost of health care (goods and services) to hospitals and providers is for administration and for regulations? No one knows because no one measures that, either. The administration guesses its own cost, and government conveniently ignores the costs of regulations. To make matters worse, the public sees rules and regulations as no-cost items.

Samuelson very rightly asserts that, “the system needs a fundamental overhaul to deliver more value for money.” No one disagrees – except those in charge. In order to determine value, one must measure cost and compare it to benefit. Does the government measure the benefits of health care? The answer is a resounding No! So how can you-the-consumer, whom I call We the Patients, assess value? If you know only part of the numerator and none of the denominator of a cost/benefit ratio, you can’t.

Finally, Samuelson practices really bad medicine. He jumps directly from symptom identification (overspending) to treatment plans (vouchers or single payer) without going through the critical step of root cause analysis.

If you want to cure something, be it a sick person or a sick system, you must treat the cause of illness. Financing is only one part of the sickness in health care. If we try to fix it (overspending) without recognizing its root cause as well as others, we are certain to fail, just as Obamacare – with its expanded control – is certain to make health care, We the Patients and America sicker.

Dr. J. Deane Waldman is the author of “Uproot U.S. Healthcare” and an Adjunct Scholar with the Rio Grande Foundation

Today, D’val Westphal’s “Road Warrior” column in the Albuquerque Journal noted some comments from a bike rider on our recent report on the stimulus-funded bike bridge over the Rio Grande.

The comments included a critique of our methodology with valid points like:

bike commuters leave earlier than rush-hour traffic because it takes them longer to get where they’re going. Placing someone on the bridge for 50 minutes during rush-hour is simply too late. Second, bike commuters wouldn’t be dressed in work clothes, unless they work in bright/reflective clothing designed not to get caught in a bike chain. Bike commuters change into work clothes after they arrive.

Fair enough. This was not meant to be an exhaustive economic analysis of traffic on the bridge. After all, we don’t have the resources or man-power to station people on the bridge for hours at a time throughout the year. That is why, in our original release on the bridge, I stated “After a year, it would be great if a government agency provided some data on whether or not this bridge was worth the cost, but that is not the way government operates.”

In other words, it would be great if government did a final analysis over the merits of its spending projects, but it does not. It just spends the money and goes onto the next thing regardless of the success (or, more likely failure) of the spending. For more on this, see today’s Albuquerque Journal “Poor Predictions” on the failing, taxpayer-financed Santa Ana Star Center.