Abstract
While there is now an extensive body of scholarship on the interestgroup approach to political processes, public health is one significant area of governmental activity that, to our knowledge, has not been brought under such analytical scrutiny.1 Partly this is what we sought to do in Chapter 10, especially when we discussed issues involving bureaucratic behavior. We seek to close the circle in this chapter by exploring the extent to which collective choices concerning public-health budgetary and regulatory processes can be brought within the rubric of the interestgroup theory of government. To advance a private-interest explanation of public-health processes is not to deny that those processes may serve some notion of public interest. Rather, the point is simply that any public-interest outcome can be reconciled with, and derived from, the pursuit of self interest by participants in public-health processes.
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Notes
One effort to explore some of the relevant conceptual issues is Tollison and Wagner (1991), from which the arguments in this chapter are drawn. For complementary descriptive material based principally upon examinations of the American Heart Association, the American Lung Association, and the American Cancer Society, see James Bennett (1990).
It is worth noting that much of the recent dietary revolution emphasizing the reduction of saturated fat and the increased consumption of complex carbohydrates in the diet was pioneered by such non-physicians as Nathan Pritikin.
“Choice,” of course, is not so simple as described. But while certainly more complex than described, the general idea is that individuals pursue their objectives, whether longer life or more fun, with purpose and efficiency.
For a wide ranging description and discussion of a variety of hypotheses, see Eysenck (1986).
See the development of this theme in Darby and Karni (1973).
This process of exaggerating risk in order to secure larger appropriations is inherent in all the risky and uncertain activities of government Thus, the Department of Defense will stress the risk of losing or falling behind in the arms race, the Justice Department will exaggerate problems of crime, and so on.
We abstract here from issues concerning barriers to entry in the medical profession and whether there is a competitive supply of physicians.
As discussed in Chapter 10, groups like physicians may organize initially for quite productive reasons, such as the promulgation of professional standards. Yet once organized, the marginal costs of collective action to cartelize and to raise prices are low. Such a pattern of historical evolution is apparent in the history of many interest groups.
Of course, the issue of motivation can be debated. Why do physicians support government health-care programs such as Medicare and Medicaid? Is it because they support health-care programs for the poor for altruistic reasons or because such programs increase the aggregate demand for medical services? And could the latter effect be an unintended consequence of public-spirited behavior by physicians? Are doctors doing well by doing good? Reasonable people could disagree about the answers to these questions, but the historical behavior of the AMA suggests clearly that economic incentives and the impact of its efforts on physicians’ wealth have been an important factor.
This pork-barrel type result is not at-all unusual in public choice analyses of congressional behavior. See Plott (1968), Stigler (1976), and Crain and Tollison (1977) for related studies.
We have been speaking as if physicians have homogenous interests. This is not the case, as we note more fully in the next section. Physicians will have various interests depending upon their specialities, and so a more elegant version of an interest-group theory would account for struggles among physicians within the physicians’ interest groups. Some physicians, for example, will specialize in treating heart attack victims, others in treating lung cancer victims, and so on. In this context our hypothesis is that the replacement of early deaths through heart attack and lung cancer by later deaths in other manners increases the net incomes of physicians. A related point is that age-related illnesses are subsidized by government health-care programs, which implies greater consumption of medical care at later ages.
Should there be some failure in the market for Wellness, such life extension might be worthwhile. The rents for physicians would in this case be the vehicle for motivating the market correction. But if there is no failure in the market for Wellness, as we argued previously, such life extension would not be worth the cost
Obviously, the incentives of physicians to lobby for longevity promotion will be a function of the real interest rate and the rate of increase of medical spending with age, as stressed above (less the present value of their pro rata tax costs). This suggests that physicians will be sensitive to the way medical spending behaves with respect to longevity. They will not rationally invest, for example, in more longevity where that longevity initially results in an extended period of zero medical spending by the older population and is followed years later by an increase in such spending. Rational investments by physicians will generally require smoothly rising medical expenditures with respect to age, and even in this case, the increase must at least offset the interest rate, or physicians will not rationally support it Hence, policies might be pursued that would promote increases from age 65 to 75 but not from 75 to 80.
Indeed, in a public-interest model relatively greater emphasis would probably be placed on the more costly diseases. At base, public health resources would be allocated such that at the relevant margins, marginal treatment costs would be reduced equally per dollar of expenditure.
Non-profit organizations in the health area have also sometime ventured into the business of selling testing devices or programs related to stopping smoking and the like. It is not clear how general profit-seeking by the non-profits is, but this is surely an issue worthy of further empirical research.
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© 1992 Springer Science+Business Media New York
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Tollison, R.D., Wagner, R.E. (1992). Interest Groups And The Public’s Health. In: The Economics of Smoking. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-3892-5_11
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