Business and Health Care Policy Reform in the 1980s: The 50 States

Abstract

This paper explores the causes and consequences of business involvement in health care reform. It uses the 50 U.S. states as its focus, analyzing a series of legislative initiatives popular in the 1980s. From an empirical standpoint, it builds on earlier work on business involvement in health care issues; from a theoretical standpoint, it aims to improve our understanding of business involvement in the policy-making process. It considers three theories of the state which, consistent with recent work in this area, seem to provide complementary explanations of the policy-making process. It finds that business' parochial economic interest stimulated business participation in overall health care reform activity while business' general economic interest affected health care coalition formation more specifically. Business involvement was most vibrant in states where large corporations were headquartered and, in the case of overall health care reform activity at least, this was augmented by the presence of major commercial bank headquarters. The presence of large health care companies inhibited overall business reform activity while stimulating formal coalition development. In turn, coalition development, but not more general reform activity, influenced health care reform legislation in the case of one of the three policies under investigation. For the other two types of legislation, business interests, state interests, and state capacities, all contributed to progress toward passage. These findings confirm the wisdom of the recent emphasis on exploring various theories of the state as complementary.