Front Page Titles (by Subject) Consumption of Public Health Services - Literature of Liberty, July/September 1979, vol. 2, No. 3
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Consumption of Public Health Services - Leonard P. Liggio, Literature of Liberty, July/September 1979, vol. 2, No. 3 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Consumption of Public Health Services
“The Distribution of Public Expenditure: The Case of Health Care,” Economica (UK) 45 (May 1978): 125–142.
Does the social position or class of individuals affect the amount of medical treatment they receive when they are ill? We can answer this by relating public expenditure on Health Services in England and Wales to the incidence of illness in socioeconomic groups.
Various measures of the distribution of ill-health (morbidity) among the social classes indicate that a greater proportion of people in the “lower” classes describe themselves as ill than in the “higher” classes. To some extent this may be explained by the different age and sex demographics of the social classes.
Estimates of public expenditure on health care reveal that relatively more is spent on those in the higher than in the lower classes. One estimate, in fact, suggests that people at the top of the social scale receive at least 40 percent more expenditure per person than do people at the bottom.
The estimated differences in expenditure per person may result from either or both of two factors: differences in the incidence of disease within each social class, and differences in the utilization of the Health Service by those describing themselves as ill within each class. The first alternative seems invalid because the available evidence suggests that “whatever other class differences there may be in Britain, differential incidence of self-reported illness is not one of them.” Therefore, accepting the second alternative leads to the question: why do the higher classes make relatively more use of the Health Services?
A sample utility-maximizing model of utilization would imply that individuals will “consume” National Health care up to the point where the marginal disutility of consuming further care exceeds its marginal utility. The marginal disutility of health care may be lower for the higher classes because they tend to spend less time travelling (as they can use their telephones to make appointments). The higher classes also use more health care because they live near better medical facilities and because they are likely to lose less income during the time they are consuming health care. Moreover, the higher classes may judge the marginal valuation of the benefits from health care as higher because they tend to perceive health services as real improvements in their health.
This suggests that cuts in public expenditure on public services would hurt the higher classes more than the lower classes. If such cuts were also accompanied by tax cuts, the lower classes might be better off and the higher classes worse off than they are now.