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Club Goods in the Health and Wellness Sector

Author(s): Roger Lee Mendoza

Journal: Current Research Journal of Economic Theory
ISSN 2042-4841

Volume: 4;
Issue: 2;
Start page: 18;
Date: 2012;
Original page

Keywords: Club | distributional efficiency | economies of scale/scope | equity | excludability | externalities | optimality | policy intervention | production | provision | rivalry | transaction costs

This study applies club theory to privately-provided and publicly-funded services within the health and wellness sector. Specifically, it examines the theoretical and practical premises and dilemmas of club provision, production, distribution and regulation using illustrations derived from cross-cultural settings. Because health and wellness contain public or merit good aspects and the quality of services in this sector is difficult to systematically evaluate even from a regulatory standpoint, tensions inevitably and constantly arise between efficiency and equity objectives. These tensions often have broader and longer-term policy implications, for excludability is both the cardinal virtue and vice of health and wellness clubs offering vital social resources rather than durable or non-durable goods and their complimentary goods. Although many of the club issues we explore in health care present opportunities for public policy intervention, the study sounds a cautious note. It proposes a set of efficiency and accountability criteria to establish, or at least gauge, the necessity, extent and consequences of such intervention. To the famous idiom, “if it ain’t broke, don’t fix it,” we therefore hasten to add “and, if it’s broke, think more than twice before you even try to fix it.”
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