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[quote user="V.Payne"] [quote user="John WR"] This is similar to what we do for Medicare where it is called fee for service. Finally, there would be the issue of setting the toll. In the beginning there would be strong pressures to set the shadow toll at a point which would be similar to current funding levels. I doubt Congress would consider a shadow toll.   [/quote] There are no real economies of scale in health care after you reach the large office/hospital level as far as I am aware, but there is a significant economy of scale in longer trains on existings routes. Roughly of the $40-50 a trainmile that is reported as the Direct Cost, about half of that is non-variable just to operate a train irrespective of the number of cars. The point is if you have a variable measure per mile you get incentives to operate more efficiently through increased volume while also enforcing customer service discipline. Think about the drop of the Gulf Coast service while the subsidy stayed the same, if the subsidy droped off by a pro-rated amount, there would be an incentive to continue the service or loose the money. The exising operations are roughly at the Interstate cross-subsidy level once you strip out the NEC shared infrastrucuture used by the commuter carriers, so just call it a Shadow Toll, and call it a day with a multi-year reauthorization at that level. BTW, This funding mechanism already exists in law in Texas and is being adopted in various forms in other states, though sometimes as a fixed sum yearly availability payment instead of something variable with mileage. [/quote] All costs are variable in the long run. Without access to Amtrak's books, one does not know the variable and fixed costs associated with its operations. Nor would one know the avoidable costs associated with the discontinuance of any Amtrak train(s). Given the difficulties Amtrak has had in implementing its SAP management information system (accounting, finance, inventory, etc.), which is not new technology, one should be skeptical of its numbers, except to the extent that they are audited by the company's independent auditors. Since 2010 its has been trying to determine the capital costs for its trains. It is not there! Unbelievable! Amtrak has claimed that it would save only $300 million per year if it discontinued the long distance trains. It does not tell the public how it derived this number. There does not appear to be any independent verification of it. Invested in U.S. Treasury long bonds, over 30 years, at the current rate, $300 million per year becomes $15.2 billion. That would be more than enough to fund high speed rail in Texas and leave money for other passenger rail projects, i.e. new equipment for the NEC. Amtrak's bureaucrats have a vested interest in maintaining as large an organization as possible. As is the case with most executives and senior managers, they see a correlation between the size of their organization and their careers prospects. They are not unique. Accordingly, they are likely to put the worst case scenario on the discontinuance of the long distance trains. Customer service discipline is enforced through appropriate management tools.  As long as there is no effective competition for a service provider, management tends to be lax when it comes to enforcing employee discipline. Increasing volume does not necessarily produce better results.  For example, between FY09 and FY12 the number of passengers on the Texas Eagle increased 29.8 per cent, and the average load factor increased from 60 per cent to 71.1 per cent. Revenues increased 33.2 per cent.  Unfortunately, the operating losses increased by 35.2 per cent. The Eagle lost $9 million per year more in FY12 than it did in FY09.  From FY09 through FY12 the Texas Eagle lost $118.9 million before depreciation and miscellaneous charges. TXDOT funds half of the loss incurred by the Heartland Flyer.The other half is funded by the Oklahoma Department of Transportation. The Texas share will be approximately $1.8 million this year. As per state law, TXDOT also diverts 25 per cent of the fuel taxes collected in Texas to education.   I am at a loss to understand how third party payment systems for healthcare relate to passenger trains.
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