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Already there is developing a consumer-oriented network of health and medical information, though not yet as sophisticated as the situation that Turner foresees. In San Francisco, for example, the Planetree Health Resources Center has collected a substantial library of health literature-some 1,500 books and numerous indexed clippings-geared toward the layman. Anyone curious about a specific health problem can mail $5.00 to Planetree, and the organization will send the person an 8-to 10-page packet of information on that particular problem.
And last year, Prevention magazine publisher Richard Rodale started up the People's Medical Society (PMS), a 40,000-member organization that Esquire described as "a medical Better Business Bureau designed to help consumers choose their doctors knowledgeably." The society's goal is to provide its members with information about specific physicians and medical facilities, on a nationwide scale. After every visit to a physician or health-care facility, PMS members fill out a questionnaire and mail it to the society. The society keeps files on these doctors and facilities, and members can call the society for information about a particular doctor (or hospital, etc.).
The society encourages physicians to join, asking them-but not as a membership requirement-to sign a pledge not to prescribe unnecessary treatments and to do everything to help patients take care of their health by themselves. Those physicians who do sign the pledge may display the society's sticker for patients to see.
The computerization of information services like those of Planetree and PMS may ultimately mean that consumers can resort to informed choice, rather than governmental regulation, as their best defense in the medical marketplace.
Shedding Light On Regulation
Economic truths have a way of piercing the myths that insulate them, eventually to reveal themselves-often with a shock. One such truth concerns the follies of electric-utility regulation, an issue that's becoming a real live wire.
In a recent cover story, Business Week charted the emerging debate-and shift in thinking-over the electric utility industry. As financial woes descend upon the utilities-many of which had not anticipated the falling growth rate of electricity demand and consequently over-invested in costly new plants-more and more analysts are pointing to regulation as the real culprit.
Because the regulators set utility rates based on costs plus a specified return on investment (a state-approved and -guaranteed profit, that is), "the only way utilities could add to profits was to add to their rate bases-and that meant build or stagnate," Business Week noted. Typically, then, utilities pushed through multibillion-dollar nuclear-plant projects, proposed and approved before the 1979 Three Mile Island accident, which led to greater regulatory scrutiny-and costly delays and interruptions. But utilities can pass on these costs to consumers, in the form of higher rates, only when the plants go into operation-another incentive to keep projects under way rather than abandon them. Anticipating these perverse effects, Nobel-laureate economist George Stigler told Reason Contributing Editor Tom Hazlett in an interview last year: "The total cost of electricity in the United States is going to be higher 10 years from now than it would be in the absence of regulation."
But consumers have wised up and are agitating against both new utility investments and the system of passing costs on to customers automatically. As a consequence of these mounting financial and political troubles, investors and lending institutions are shying away from the utilities.
Moreover, some critics of the cost-plus system are probing further into the regulatory structure, calling into question the long-established practice by which regulators grant utilities monopoly status based on the idea that electricity production and distribution is a "natural monopoly"-that is, the idea that within a specific market (a city, for instance), only one company can provide the service profitably, so the state must grant one provider an exclusive franchise and then regulate its rates.
"Just as technological breakthroughs made it possible to break up the telephone monopoly," Business Week reported, "some experts believe the technology is now available to begin ending the monopoly of the electric industry, at least at the power generation stage." Indeed, William Berry, chairman of Virginia Electric & Power Co., told the magazine: "We ought to consider the idea of a deregulated industry."
To test the waters of at least partial deregulation, the Federal Energy Regulatory Commission in December approved a two-year experiment in which four utilities may shop the market for wholesale power. They're allowed to keep a quarter of any savings they thereby make.
Dismantling a regulatory system that's been around since the '20s will certainly be more than an overnight task. But at least some of the players are beginning to see the light.
- Worth a try. Notwithstanding its employment of the Orwellian notion that a tax break constitutes a "subsidy," the New York Times sensibly suggested in a recent editorial that enterprise zones "deserve a test." An enterprise-zone bill has already passed the Senate and must make its way through the House to become law.
- Higher taxes axed. Cleveland and Cincinnati voters defeated measures to raise their cities' income-tax rates from 2 to 2.5 percent.
- Myth demolition. Gentrification- upper-and middle-class families moving into depressed neighborhoods, renovating homes, and boosting property values-again comes off well, this time in a study by the New York City Planning Department. In two Manhattan neighborhoods where extensive gentrification has occurred, the study found housing conditions had improved, deterioration had been reduced, and the city's tax base had increased through strengthened commercial districts. Moreover, while there was some displacement of poor residents because of gentrification, other poor residents moved because of not enough gentrification-their part of the neighborhood was continuing to decline.
- Threadbare union suit. In April, the Supreme Court ruled unanimously that when a union collects compulsory dues, it may not use a member's dues to pay for general organizing efforts if the member objects. Moreover, the union may not use the money, over the member's opposition, for litigation costs unrelated to bargaining.
- The ICC man cometh. Some powers of the Texas Railroad Commission, which has refused to cooperate with federal railroad deregulation, are being derailed. The Interstate Commerce Commission announced in April that it is displacing the state agency's regulation of intrastate railroads in Texas.
- Letter perfect. Rep. Bill Green has proposed that the Postal Service monopoly be ended in districts where mail service has been particularly lousy. "Surely, if it cannot deliver, the Postal Service should not object if we seek someone who can," the Manhattan Republican wrote in the New York Times. The Green proposal would, of course, permit free-enterprise mail for his constituents in Manhattan.
- Bluenoses broken. On May 1, Indianapolis mayor William Hudnut, a professional minister, signed an ordinance making pornography a violation of women's civil rights. An hour later, the ordinance was challenged in federal court. And on May 9, a federal district judge issued a preliminary injunction prohibiting enforcement of the ordinance until the suit is resolved.