Health Economics is the field of study that a strict analysis of the health care system concludes. It applies the economic theories of the consumer, manufacturer and choice; health economics aims at understanding the general trends in the industry and the behavior of everyone involved, from consumers to healthcare providers and the governments. Health care system in the United States underwent a significant change between the years 1750 and 2000. It signified home remedies and a system of health care providers with no structure. It later evolved into an advanced, complex system with innovative technologies and bureaucratically controlled that modernized. The evolution of practices in medicine was observed, the governmental institutions themselves It composed of economists, physicians, health specialists, and other interest groups. It was funded by philanthropic organizations and provided a means of voluntary insurance services. Due to the Great Depression, hospitals tried to establish prepaid hospitalization plans to cover the costs and to benefit the patients. It led to competition among hospitals. The community hospitals began to offer medical coverage to the public (Swayne, 2012). The Social Security Act established in 1935 shared the costs of the elderly. 1940s In 1939, private health insurance companies covered 6% of the population. That number doubled by 1941. Then USA entered World War II. During this time, a significant change in the health insurance happened. Price control measures imposed under the Stabilization Act of 1942 on employers to restrict wage increases. The Act allowed employers to provide health insurance to employees as a benefit. Three forces came together that helped shape the health care system. In 1948, the US Supreme Court made the decision to include health insurance part of the collective bargaining process. The 21st Century President Barack Obama signed the Affordable Care Act in 2010. Its purpose was to maintain a steady health insurance policy for the masses and offer affordable, available, and better quality (Berwich & Hackbarth, 2012). “The United States spends more on health care, both per capita and as a share of Gross Domestic Product (GDP), than any other country in the world” (Center for U.S. Health System Reform, 2011, p. 1, Para 2). Conclusion The U.S. health care system has experienced many transitions over the years. It has gone from being a simple method of becoming difficult to understand. Since the start of the 19th century to the Affordable Care Act, various efforts have been made to lower the cost or increase the assistance of health care. Nevertheless, health care has seen a tremendously inclined in expenditures and still rising. The U.S. will continue to use health economics as a tool to identify the best options for approaching objectives for decision
In the 1800’s, the Netherlands, Sweden, and Belgium, among others, began to establish “socialized insurance policies” and medical care, which are still in effect today, while at the same time, the United States began to furthe...
According to Harry A. Sultz and Kristina M. Young, the authors of our textbook Health Care USA, medical care in the United States is a $2.5 Trillion industry (xvii). This industry is so large that “the U.S. health care system is the world’s eighth
Many pivotal events over the last century have brought our healthcare system to where it is today. Some were indirect, such as World War II (and how it led to direct events such as medical advances that shifted focus from critical care and managing contagion to preventive medicine and health insurance as an employee benefit) and the internet (which has provided a wealth of tools and resources that were once only available to healthcare providers and has served to foster technological advancements such as Electronic Health Records and telemedicine). Others were targeted interventions, such as the Hill-Burton Act, which was enacted in 1946 and provided infrastructure dollars to healthcare facilities that agreed to provide a significant volume of free or reduced cost services to those with limited ability to pay (HRSA, 2014). Perhaps the most influential targeted event was the passage of Medicare and Medicaid programs, which was the point at which the government became the administrator for insurance programs for the poor, creating a system that would continuously grow and impact service delivery through regulatory control.
The bill created a Job Corps similar to the New Deal Civilian Conservation Corps; a domestic peace corps; a system for vocational training. The bill also funded community action programs and extended loans to small businessmen and farmers. This helped people to get jobs with good wages.Then came the Medicare Act of 1965 which help people to get better health coverage. “No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime so that they might enjoy dignity in their later years” (1) In 1964 more than 44 percent senior had no health coverage or insurance. Senior citizens were dragged down to poverty as they were not able to pay the medical bills. But after the Medicare Act of 1965 which provide everyone with the medical coverage of all people age 65 and above this issue was almost solved. Along with the Medicare, the Johnson Administration established the Medicaid program to provide healthcare to the poor. Different from Medicare, this Federal-state partnership is largely determined in form and construct by each individual state. In the first three years of the program, nearly 20 million beneficiaries were enrolled
In 2010, President Obama signed into law the Affordable Care Act in order to bring reform to the current healthcare system. The law was designed to provide healthcare coverage for people that did not have access to healthcare, improve the quality of the types of healthcare provided, and contain costs (HHS, 2014). Some of the features of the law are:
Hicks, L. (2012). The Economics of Health and Medical Care (6th Ed.). Sudbury, MA: Jones and Bartlett Publishers.
In order to make ones’ health care coverage more affordable, the nation needs to address the continually increasing medical care costs. Approximately more than one-sixth of the United States economy is devoted to health care spending, such as: soaring prices for medical services, costly prescription drugs, newly advanced medical technology, and even unhealthy lifestyles. Our system is spending approximately $2.7 trillion annually on health care. According to experts, it is estimated that approximately 20%-30% of that spending (approx. $800 billion a year) appears to go towards wasteful, redundant, or even inefficient care.
Despite the established health care facilities in the United States, most citizens do not have access to proper medical care. We must appreciate from the very onset that a healthy and strong nation must have a proper health care system. Such a health system should be available and affordable to all. The cost of health services is high. In fact, the ...
According to Medicare’s WebPage Medicare is a Health Insurance Program for people 65 years of age and older, some disabled people under 65 years of age, and people with End-Stage Renal Disease (permanent kidney failure treated with dialysis or a transplant). Medicare has two parts, Part A which is for basically hospital insurance. Most people do not have to pay for Part A. In addition it has a Part B, which is basically medical insurance. Most people pay a small monthly fee for Part B. Medicare first went into effect in 1966 and was originally administered by the Social Security Administration. In 1977 the control of it was switched over to the newly formed Health Care Financing Administration. Beginning in July 1973 Medicare was extended to persons under the age of 65 with certain disabling conditions. In 1988 Congress passed legislation to expand the program to cover health care costs of catastrophic illnesses.
6. The special characteristics of the U.S. health care market are Ethical and equity considerations, asymmetric information, spillover benefits, and third-party payments: insurance. Each one of these characteristics affects health care in some way. For example, ethical and equity considerations affect health care in the way that society does not consider unjust for people to be denied to health care access. Society believes that it is the same thing as not owning a car or a computer. Asymmetric information also gives health care a boost in prices. People who buy health care have no information on what procedures and diagnostics are involved, but on the other hand sellers do. This creates an unusual situation in which the doctor (seller) tells the patient(buyer) what services he or she should consume. It seems like the patient has to buy what the doctor tells him. The topic of spillover benefits also cause a rise in prices. This meaning that immunizations for diseases benefit not only the person who buys it but the whole community as well. It reduces the risk of the whole population getting infected. And the last characteristic is third-party insurance. Which involves all the insurance money people have to pay. This causes a distortion which results in excess consumption of health care services.
There is an ongoing debate on the topic of how to fix the health care system in America. Some believe that there should be a Single Payer system that ensures all health care costs are covered by the government, and the people that want a Public Option system believe that there should be no government interference with paying for individual’s health care costs. In 1993, President Bill Clinton introduced the Health Security Act. Its goal was to provide universal health care for America. There was a lot of controversy throughout the nation whether this Act was going in the right direction, and in 1994, the Act died. Since then there have been multiple other attempts to fix the health care situation, but those attempts have not succeeded. The Affordable Care Act was passed in the senate on December 24, 2009, and passed in the house on March 21, 2010. President Obama signed it into law on March 23 (Obamacare Facts). This indeed was a step forward to end the debate about health care, and began to establish the middle ground for people in America. In order for America to stay on track to rebuild the health care system, we need to keep going in the same direction and expand our horizons by keeping and adding on to the Affordable Care Act so every citizen is content.
The U.S. expends far more on healthcare than any other country in the world, yet we get fewer benefits, less than ideal health outcomes, and a lot of dissatisfaction manifested by unequal access, the significant numbers of uninsured and underinsured Americans, uneven quality, and unconstrained wastes. The financing of healthcare is also complicated, as there is no single payer system and payment schemes vary across payors and providers.
(c) a requirement that firms with over 50 employees offer coverage or pay a penalty, (d) a major expansion of Medicaid, and (d) regulating health insurers by requiring that they provide and maintain coverage to all applicants and not charge more for those with a history of illness, as well as requiring community rating, guaranteed issue, non-discrimination for pre-existing conditions, and conforming to a spec...
The United States health care system is one of the most expensive systems in the world yet it is known as being unorganized and chaotic in comparison to other countries (Barton, 2010). This factor is attributed to numerous characteristics that define what the U.S. system is comprised of. Two of the major indications are imperfect market conditions and the demand for new technology (Barton, 2010). The health care system has been described as a free market in
The cost of US health care has been steadily increasing for many years causing many Americans to face difficult choices between health care and other priorities in their lives. Health economists are bringing to light the tradeoffs which must be considered in every healthcare decision (Getzen, 2013, p. 427). Therefore, efforts must be made to incite change which constrains the cost of health care without creating adverse health consequences. As the medical field becomes more business oriented, there will be more of a shift in focus toward the costs and benefits, which will make medicine more like the rest of the economy (Getzen, 2013, p. 439).