PUBLIC RESPONSIBILITY AND INEQUALITY IN HEALTH INSURANCE COVERAGE: AN EXAMINATION OF AMERICAN STATE HEALTH CARE SYSTEMS

Published date01 June 2014
DOIhttp://doi.org/10.1111/padm.12083
Date01 June 2014
doi: 10.1111/padm.12083
PUBLIC RESPONSIBILITY AND INEQUALITY
IN HEALTH INSURANCE COVERAGE:
AN EXAMINATION OF AMERICAN STATE HEALTH
CARE SYSTEMS
LING ZHU AND MORGEN JOHANSEN
This article examines the effect of the three publicness dimensions on inequality in health insurance
coverage across 50 American state-level health care systems. The analysis validates a Gini-coeff‌icient
measure of Americans’ unequal distribution of health insurance coverage across nine income groups
and compares public ownership, f‌inancing, and control of health care systems across all 50 states
from 2002 to 2010. There is a signif‌icant and negative relationship between public ownership and
inequality in health insurance coverage, although the substantive impact of ownership is relatively
small. Both public f‌inancing and control substantially reduce inequality in health insurance coverage
across income groups. However, both of these must be present in order to be effective at reducing
inequality. This article expands our understanding of the link between different institutional
arrangements and inequality in health insurance coverage in hybrid health care systems.
INTRODUCTION
In democracies, public policymaking is fundamentally about def‌ining the scope of
government responsibilities in the provision of public goods and services. A recurring
trend in public service provision is the attempt to deliver services using the government-
by-proxy approach, whereby public services are delivered through the mixed domain
of service organizations between government and the market. These actions raise both
normative and empirical questions about realizing democratic values such as social equity.
Social equity concerns the equal distribution of ‘goods and services, wealth and
income, health and illness, or opportunity and disadvantage’ in a society (Stone 2012,
p. 39). Equality in public services ref‌lects public values of the egalitarian tradition and
democratic accountability (Frederickson 2005). Since free market systems do not guarantee
an even allocation of resources and opportunities, government often steps in to correct
for public value failures of the market (Bozeman 2002). The resulting service systems, and
their publicness, have implications for the equitable distribution of public services (Svara
and Brunet 2005).
Current research on how ‘public’ a service delivery organization or system is links policy
outcomes to the institutional characteristics of public and private organizations, or service
networks (Meier and O’Toole 2011; Moulton and Bozeman 2011; Walker and Bozeman
2011). In theory, multiple dimensions of publicness (ownership, f‌inancial resources, and
the model of social inf‌luence or political control) comprise the key institutional factors
that shape the distribution of resources, services, and opportunities (Rainey and Bozeman
2000; Andrews et al. 2011). Determining the extent of the publicness of organizations
and service systems can ‘lend insights to understanding and managing public outcomes’
(Moulton 2009, p. 889), such as the equity of public service provisions.
Empirical research that links public dimensions to the distributional outcomes of
these service systems is surprisingly lacking. Andrews et al. (2011) f‌ind that out of
Ling Zhu is Assistant Professor in the Department of Political Science, University of Houston, Houston, Texas, USA.
Morgen Johansen is Assistant Professor in the Public Administration Program and Public Policy Center, University of
Hawaii, Honolulu, Hawaii, USA.
Public Administration Vol. 92, No. 2, 2014 (422–439)
©2014 John Wiley & Sons Ltd.
PUBLICNESS AND INEQUALITY IN HEALTH INSURANCE 423
31 studies, only three look at the impact of dimensional publicness on social equity
(Wheeler et al. 1992; Clark et al. 1994; Amirkhanyan et al. 2008; also see Andrews and
Entwistle 2010). Moreover, all three of these studies only examine one dimension of
publicness – ownership.
This article offers a systematic examination of the effect of the three publicness dimen-
sions on inequality by focusing on state health care systems in the United States. A
framework is developed to assess how a health care system is organized along the three
dimensions of publicness and the theoretical mechanisms through which these dimen-
sions may affect inequality. The empirical analysis draws on a comprehensive review of
inequality in health insurance coverage across nine income groups, and compares public
ownership, f‌inancing, and control of state health care systems across all 50 American
states from 2002 to 2010. Findings show that both public control and ownership have a
direct inf‌luence on reducing inequality. Financing, when accompanied by public control,
has an effect on reducing inequality, which points towards the need to further investigate
the relationships between the publicness dimensions.
INEQUALITY AND DIMENSIONAL PUBLICNESS
Government can correct for inequality as a result of market failure either by substituting
private supply with public supply, or by imposing public controls on private sector
organizations. This traditional or ‘core’ approach focuses on the legal ownership of
the systems and organizations that provide public goods and services. This approach
neglects to take into account other dimensions that affect the formation and delivery of
public goods. Thus, publicness is less about who ‘owns’ an organization, and more about
distinctive institutional arrangements, political controls to correct for market exclusion of
the disadvantaged, and responsibilities in sustaining public values such as social equity.
Bozeman’s (1987) dimensional publicness framework treats publicness as a continuum,
where organizations are more or less public, thereby allowing scholars to capture the
multiple venues of government inf‌luence on the distribution of public goods and services.
The three dimensions that def‌ine publicness are: ownership, f‌inancing, and control
(Bozeman 2002). Ownership publicness refers to the legal type of organization or service
system. The share of resources provided by the government to the system def‌ines f‌inancial
publicness. Public control is def‌ined by the formalization of legal rules, regulations, and
enforcement activities that direct and structure the allocation of goods and services
towards public values (Rainey and Bozeman 2000). These three dimensions of publicness
are ‘not mutually exclusive but rather complementary variables that identify the important
and independent nature and degree of an organization’s [or a system’s] publicness’
(Heinrich and Fournier 2004, p. 51).
The concept of publicness is applicable when describing the relative strength of
government inf‌luence compared to market forces in a broader context, such as the
publicness of a policy environment. Moulton (2009) contends that measures such as
f‌inancial publicness and ownership types at the organizational level may not suff‌iciently
capture the full array of institutional and regulative arrangements that affect how public
values and outcomes are realized. One cannot gain a comprehensive understanding about
the causes and remedies of inequality without examining how broad institutions and
social structures shape individual or group inequalities in access to services and resources
at the societal level (Hao and Naiman 2010).
Public Administration Vol. 92, No. 2, 2014 (422–439)
©2014 John Wiley & Sons Ltd.

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