A common refrain heard among people in Michigan is that trains are uneconomic and a sinkhole of costs and no profit. The facts are more nuanced. Some commuter trains firms are profitable and some are loss making. In many countries, railroads are a "for profit" activity. People forget that all railroads in the U.S. were built with private risk capital. The Japanese high speed rail system (they started building it in 1962 when "Made In Japan" was a byword for cheap plastic crap) was privatized and that company was sold for $90 billion to private investors.
What most people don't realize is that the Detroit to Chicago "higher speed" rail line, now fully funded, once in service in 2015 or 2016 will be a very profitable business earning tens of millions of dollars a year in profit based on the most recent (very reasonable) feasibility study available. Delta and Southwest earn substantial profits on their Detroit to Chicago air shuttle service and this will be a cheaper and faster way to get to Chicago.
The higher-speed train plan calls for frequency of the trains to triple from 3 to 9 trains per day with 3.75 hours transit time from Detroit to Chicago and 3.25 hours from Ann Arbor to Chicago. The assumption is costs would rise to $95 million from $37.2 million and revenue would rise to $113 million from $20.2 million. I find this very realistic. Some of the costs are fixed and not truly variable. Three times the costs would be $111.6 million, but they wouldn't be that high as all costs don't triple if you triple the number of daily trains.
The revenue improvement is also realistic because higher speed trains will shift business travelers like me from planes to trains. By the time I drive to the airport and park, go through security and wait, I've blown 90 minutes and on the other end 30-90 minutes depending upon which airport, where I am actually going and if it is rush hour or not. The elapsed time taxiing and flying is about 60 minutes, so 3 hours to 4 hours. Including the parking fees ($10 or $20 a day, but add 15 minutes to the trip if you use the $10 lot), car mileage ($25), taxi ($30) or mass transit costs ($3) on the other end and the plane ticket itself ($265 to $800 depending upon how far in advance you buy your ticket and which airline you use), air travel costs ($303 to $875) a lot more than the projected round-trip price of $90-$120. What's the advantage in air travel then?
The key is that the higher speed rail has to be reliable and on-time +90% of the time, like the best airlines are. Then passengers would migrate en mass and adding more train cars to an already moving train is cheap, so the extra marginal revenue from those passengers will be very, very profitable.
If it was a stock, I'd be buying it. However due to a federal law called PRIIA, the current $17 million annual loss on the line for the next two years until the higher speed trains run and the service turns profitable must be borne by the state of Michigan and the state legislature is balking at funding it. Maybe the governor should do an initial public offering to raise the money?! If he raised $50 mm privatizing the ownership of the operating route in Michigan in an IPO and in 2015 it earned $18 mm, it would be a great investment! In other words an entity that owns the land hires Amtrak to operate the higher speed rail line and pays any deficits and gets to keep any operating profit. It would still be branded Amtrak.
It's not possible without legislation at the state and federal level, but my reason for raising it is as a thought exercise to show that it is a profitable business and a wise investment for the state to make. This profitable rail business could then fund the start-up costs of commuter shuttle trains.
If the Canadians build out a similar service to Toronto from Detroit, as Governor Snyder is currently trying to do, the economics get better again. This would further improve ridership and the profitability of the "higher speed" rail line. Over time, we can funnel the profits from running this 110 mile per hour service into true high speed rail with speeds of 250 m.p.h. Then you would be able to go from downtown Ann Arbor to Chicago or Toronto in one hour and fifteen minutes or to downtown Detroit in under 15 minutes.
Maybe it’s the distinct shade of green that’s so interesting in that it offsets the site so perfectly in home colors. Proximity is also a decided asset in that every field is closely aligned with the next.
Then there’s the good people who make it go, coaches and players and community who care so completely about youth and prep programs that they’re willing to do what has to be done to keep the venue pristine.
In recent weeks the Brookwood Athletic Complex has been undergoing vast cosmetic changes though as it’s effectively jumping into the 21st century via a project called Brookwood 2.0.
This project started in December with a total of $300 and has since then took off, gaining steam and monetary contributions at a phenomenal pace through private donations and not a single dime from taxpayer funds. When it is completed the new Brookwood Complex with have a new football field fitted with synthetic turf, thus putting an end to the expensive and never-ending process of keeping the field in shape. Seating will be revamped to accommodate 4,000 and four new soccer fields will be added making Clare a premier tournament destination for soccer. At the end of the 2014 school year the track will also be resurfaced.
The American Medical Association has voted to consider obesity a disease in the hopes that this will spur more direct communication between doctors and patients. Plus, it might increase the pressure on insurance companies to pay doctors for having these discussions.
It seems some physicians aren’t comfortable telling patients how to live, but if the discussion is about treating a disease, they’ll be more likely to weigh in. I got an email last week from a reader who wondered why doctors aren’t more aggressive in pointing out patients’ poor health habits. I’ve wondered the same, noting that I get more directives from dental hygienists and plumbers than any doctor I’ve ever had.
Most of us can identify our lousy health habits, but knowing the doctor will follow up on our progress – or lack thereof – at the next appointment can be a motivator. However, our health care system doesn’t always encourage this.
A couple of years ago, I made an “appointment” with my children’s pediatrician with no intention of bringing a kid along. I just wanted to talk with him privately about some concerns, but the nurse’s exasperation made it clear that I had breached a protocol. In the end, I was granted the chat, and it was cordial and productive. Whether it was deemed “billable,” I don’t know, but it could explain the frustration.
Doctors should get paid for taking the time to discuss health issues. It’s vital to preventing disease or managing conditions. It’s a key to cutting health care costs. But fee schedules favor tests and procedures. It wasn’t until 2011 that Medicare began paying doctors for broaching end-of-life planning with patients and their families. Before that, long-shot procedures would be covered, but not a discussion that could head off unwanted heroism. But the change had to be ushered in quietly – via presidential directive – to avoid more tantrums about “death panels.”
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