Abstract: Social Responsibility and the Construction of Corporate Health Care, 1950-1965

Christy Ford Chapin

Abstract

The literature on corporate social responsibility (CSR) generally focuses on corporate welfare in the form of fringe benefits for workers or the profitability that firms derive from the positive public relations message attached to charity or small demonstration projects. In this paper, I argue that scholars should expand their conception of CSR to consider how such campaigns, when carried out in response to threats of government intervention, can institutionally restructure entire industries. The history of the health care industry illustrates this point. During the post-World War II era, policymakers, insurers, and physicians recognized that insurance company-funded health care was inherently expensive. Thus, even after private interests had defeated Harry Truman's plan for universal health insurance, Republicans and moderate Democrats continued to propose reforms to rearrange the voluntary market for lower costs and broader coverage. In order to thwart federal interference, insurance companies transformed health insurance from a high-end product for a select few into a mass consumer good. In the process, insurers created the market structure to supervise physicians and attempt to regulate costs. When policymakers passed Medicare in 1965, they adopted the institutional framework that insurers had already created, thereby anchoring insurance companies to the center of the public-private health care system.