Medicare is a price-fixing system for upward of 12,000 procedures and drug codes -- and for hundreds of categories of equipment, the providers of which tenaciously oppose competition. Leavitt began implementing a tiny program of competitive bidding covering just 10 products in 10 cities.

Based on the 15 days it lasted before Congress repealed it, savings were projected to be substantial. That is why equipment providers got it repealed.

Rather than ruining the new year by dwelling on Medicare's unfunded liabilities of about $34 trillion (over a 75-year span), ruin it with this

fact: In the next 50 years, Medicaid, the program for the poor -- broadly, sometimes very broadly defined -- could become a bigger threat than Medicare to the nation's prosperity.

This is partly because of the cost of long-term care for the indigent elderly, some of whom shed assets to meet Medicaid's eligibility standard -- sometimes as high as income under 200 percent of the federal poverty level. And many states, eager to expand the ranks of the dependent with the help of federal Medicaid money, use "income disregards" to make poverty an elastic concept. For example, they say: A person who gets a raise that eliminates his eligibility can disregard the portion of his income that pays for housing, or transportation.

Governments with powerful political incentives to behave this way will play an increasingly large role in health care. As is said, if you think health care is expensive now, just wait until it is free.