The Key to Fixing Health Care and Energy: Use Less

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So don't expect government intervention on the demand side — through education campaigns, tax incentives or targeted subsidies — to rein in our cravings. But in the energy arena, several states have already proved that rationalizing incentives on the supply side can transform the landscape. In most of the country, per capita electricity use has increased about 50% during the past three decades — despite conservation programs, efficiency incentives and the general rise of green. But in California and the Pacific Northwest, where state legislatures decoupled utility profits from sales volumes, electricity use has been flat. Instead of an incentive to sell more power and build more generating plants, the utilities had an incentive to help their customers save electricity and avoid the need for new generating plants. So that's what they did. Energy providers were much better than the government at influencing the behaviors of energy consumers. "That's what we need in health care," says Dr. Elliott Fisher of the Dartmouth Institute. "When providers get rewarded for volume, they provide volume. That's got to change."

In medicine, the idea would be to reward quality rather than quantity, to give providers incentives to keep us healthy and reduce unnecessary treatments, to encourage doctors and hospitals to promote a culture of low-cost, high-quality care. One reason the Mayo Clinic already provides low-cost, high-quality care is that it keeps its doctors on salary, insulating them from fee-for-service inducements to overserve; unfortunately, Mayo is hemorrhaging cash on its Medicare patients, because the current system penalizes responsibly conservative care. Doctors don't get paid for thinking about a case or returning a phone call or explaining why an MRI isn't necessary; hospitals don't get paid when their discharged patients don't have to go back to the hospital. Our goal for our health-care system is not more tests or more doctor's visits or longer stays in the hospital — it's better health. But that's not what gets paid for, so that's not what we get.

That won't be easy to change. The 1990s managed-care boom was supposed to incentivize HMOs to keep us healthy, but it slashed needed as well as unneeded care in a frenzy of willy-nilly cost-cutting and short-term profit-taking, triggering a national backlash. And if Congress gets into the details of what would be reimbursed under a new fee-for-quality structure, the same interest-group politics that have distorted and ultimately paralyzed the current system could dominate the new system; that's why Obama has proposed to depoliticize those decisions through an independent agency similar to the military-base-closing commission. Still, changing the dysfunctional payment system while safeguarding patient rights (and perhaps protecting doctors who practice evidence-based medicine from frivolous malpractice suits) would be easier than expanding coverage to the uninsured, transforming the insurance market and figuring out how to pay for it all during a crippling recession. "It's become conventional wisdom that we've got the wrong payment system," says Ezekiel Emanuel, a key White House health adviser. "Even the Republicans agree that we ought to pay for quality instead of volume."

Comprehensive energy reform will be even harder to push through Congress in a form that still looks like reform; Agriculture Committee chairman Collin Peterson of Minnesota has already watered down the House version to protect subsidized industrial farmers and their catastrophic ethanol boondoggles, and the legislation faces even rougher rapids in the Senate. But a less ambitious effort to bring the entire country in line with the six states that have already decoupled utility profits from electricity sales — and the 16 that have done the same with natural gas — would be less controversial as well. Most utilities would be delighted to promote efficiency and renewables if they could do it without shafting their shareholders.

Ultimately, the survival of our planet and the solvency of our country will depend on cultural changes that persuade enough of us to use less energy and less health care. The spread of eco-consciousness has helped with energy, but utilities have helped more, and only doctors can lead the way toward a similar less-is-more mentality in medicine. If Washington can change the incentives, the culture will follow the money.

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