He repeated his lament that without change, Minnesota will become one giant “welfare agency.”

The governor’s complaint, as usual, is misleading and ideologically-driven. In reality, increases in DHS spending in Minnesota aren’t driven by “welfare” costs. Indeed, welfare costs have fallen significantly over the past ten years, both here in Minnesota as well as nationally.

What’s forcing the DHS budget higher each year is the same thing that’s making life harder for millions of American families and businesses— spiraling health care costs.

Pawlenty looks at the state budget numbers and sees cuts in eligibility as the solution to the problem, because it kicks more Minnesotans off of publicly-subsidized health care programs. By his rationale, that reduces the costs to the state, therefore, issue solved.

If only it were that easy. First of all, while Pawlenty is quick to attempt to portray the state’s rising health care costs as an example of wasteful government spending, the reality is that the cost spiral is, more accurately, a reflection of the rising cost of medical care generally. Indeed, health care costs are rising faster in the private sector than they are in the public, a trend which certainly suggests the public sector is finding ways to be more efficient.

The spiraling cost of our market-based health care system is not just putting strains on public budgets, it’s severely undermining the competitiveness of American business. When virtually all of our foreign industrial competitors enjoy public systems of health insurance and oversight that have kept their costs in check, it’s no wonder that our major manufacturers are suffering.

In either case, Pawlenty’s answer of cutting public program eligibility isn’t a solution at all, it’s simply passing the buck. The bottom line is that people get sick, or injured and they’re going to access the health care system in one way or another.

When Pawlenty cuts eligibility, it may save the state budget some money, but only because someone else is picking up the tab. Often, that’s the local hospital, which will see its uncompensated care costs increase.

We’ve already reported on that trend at community hospitals in our area, where uncompensated care has exploded in just the past year. That trend is putting further economic pressure on our hospitals, which are already facing layoffs.

In other cases, people who are uninsured delay seeking medical care, which oftens brings them into emergency rooms at a later date when the costs of treatment are significantly higher. In other cases, delayed care means people die needlessly. We’ve had a number of local examples of exactly that in recent months, and that’s a real shame.

Tossing more Minnesotans off of health insurance isn’t the answer. Controlling the overall cost of health care is the only solution. I’m not even going to pretend to have the answers there, but it is worth noting that rising payments for physician services and hospital care are currently the big drivers in rising health costs.

There are some pretty clear factors behind such trends. Physician salaries are much higher in the U.S. than in other countries. Some might argue that this encourages the best doctors to practice here. That’s debatable. I’ve seen little evidence that those physicians who seek the highest salaries are necessarily the best doctors.

In either case, having the highest physician salaries does contribute to higher costs. That’s self-evident.

Competition among hospitals also fuels higher costs. I know there are those who say competition works the opposite way, but that’s only in a market where costs are directly comparable. If you’ve ever tried to find out what a procedure costs at a hospital, you know this doesn’t reflect the health care system in the U.S.

And as long as consumers of health care don’t pay the cost directly, the incentives to find the cheapest price simply don’t exist. In either case, most people aren’t going to shop for bargains when their health is on the line.

In the meantime, hospitals compete for patients by purchasing all the latest and greatest equipment, even when the same MRI machine or CT scan is available just blocks away.

That wouldn’t be allowed in most other countries, because oversight boards weed out such inefficiency.

Some will no doubt argue that such oversight amounts to rationing. They can call it whatever they want. It doesn’t change the fact that if we want to actually control health care costs in this country, we need to improve efficiency. We have the most inefficient health care system of any major industrial country, according to a recent study by the Commonwealth Fund. That same study found that the U.S. ranks last among wealthy nations for quality of care and access. And our health care expenditures are twice that of other western nations. These findings are consistent with those of dozens of similiar studies in recent years.

And as bad as our costs are today, the situation is deteriorating daily. Health care costs already consume nearly one of every five dollars spent in the U.S. and our spending on health care will double in less than ten years if nothing is done.

Pawlenty is right that health care costs are consuming more and more of our state budget. But that’s only because health care costs are consuming more of everything. The bottom line is that if we don’t get health care costs in general under control, the state budget will be the least of our worries.