The history of health care is short but it provides a small view of how the United States made a simple choice of demand and supply through fee-for-service to managed care, PPOs, and other insurers of health care including the federal government. Fee-for-service in the early 1900s was the norm for the American public. Insurance companies did not provide health care, and if they provided the service it was only available to a few wealthy people. Physicians charged a set price based on the ailment or disease, they were paid in goods or money.
In the 60s and 70s it was becoming popular for employers to pay health insurance and employers realized that if they provided this essential benefit, the productivity and profits would increase because his or her employee is healthier. At the end of the 70s Americans were demanding health benefits and in the advent of the demand the cost of health increased. The government entered the health insurance arena in 1965 with the passage of Medicare and Medicaid, which covered people without health insurance and elderly, children and mothers.
The advent of this legislation changed health care services and the supply and demand of American public (Sack, 2010). Health care cost and spending is one of the major concerns for the society as a whole. Health care is one of the most important parts of a health system and therefore it accounts for the most spending for the government and others throughout the entire world. For example, medical debt is now a leading cause of a lot of personal bankruptcies happening throughout our society. Health care is one of the leading causes that are affected by the social and economics in individual’s lives.
Within the United States, health care costs continue to rise as the years pass. This is also due to how the technology for health care usage is also increasing and the prices for the equipment being used. When trying to explain the high cost of medical care many people think it is because we use more medical services than other countries. That is not true, in fact, high costs are due to prices of our society, and when the prices go up, we have to pay out of pocket more and more. The US pays more in health care costs than any other country in the world, without providing more services than the other countries.
The health care system counts for about one-sixth of the entire economy, which is more than other industries in business. Spending on health care totals about $2. 5 trillion dollars a year (R. Buchanan, 1981). Health insurance premiums have skyrocketed, and this makes it so much tougher and harder for workers and employees to even be able to afford health care. For companies and small businesses, with the rise of health care costs, means there is going to be less money for new equipment, research, expansion, and better facilities to provide the public.
In return, that also means there are going to be less jobs available, and possibly some jobs lost due to not be able to afford as many employees. This limits consumer spending and hurts the business in retrospect. Health care also affects the economy because the cost to provide health care for Medicaid and Medicare participants is distributed through the national budget department. When the government takes on the cost for people who cannot afford them, it impacts the economy by taking more money away from other areas that could help improve our society.
When Americans cannot afford health care costs and they go into debt, it creates an additional economic burden that is merely impossibly to rid. GDP Gross domestic product (GDP) is on the market period of all officially recognized goods and services made throughout America within a given set period of time. This often indicates how a countries standard of living is. GDP is not about measuring a person’s personal income; it equals the gross domestic income. The GDP can be determined in only three different ways, the product and income approach, and the expenditure approach.
The most important of the three ways to determine GDP is, the product approach; which sums all of the outputs of every and all classes of enterprise to come to the conclusion and total. Healthcare currently represents about 17 percent of the U. S. GDP and unless reform occurs, it is estimated to reach 20% within the next decade (the global average is only 10%). In addition, it has been estimated that approximately 62% of all bankruptcies can be attributed to healthcare costs. The simple answer to all this is to decrease the healthcare expenses however; it’s simply not the simple.
Decreasing the expenses means that someone does not get paid adequately for whatever service they are providing. A “not-so-simple” answer is to accept concept of healthcare rationing. All services, regardless of the industry, have a finite amount of resources available to them. This being the case, resources is rationed out to provide the greatest good for the greatest amount of people. Healthcare is really no different. There are only so many doctors, nurses, hospitals, etc… Rationing already occurs to some degree whether publicly accepted or not.
Statistics have shown that individuals of certain socioeconomic classes receive fewer healthcare services than others seemingly based upon their access to healthcare, the source of payment or their state of disease. This form of rationing will not only continue but very likely begin to reach into the other socioeconomic classes as well. As the resources are needed to provide the greatest good, and the number of individuals eligible for healthcare increases (baby-boomers and healthcare reform beneficiaries), it is very likely that there just won’t be enough to go around.
Healthcare economics will again be forced to change only this time it would begin to a decision maker in the entire process… deciding who can receive what service and for how long. The negative effects of this scenario are enormous in light of the true intention of healthcare but given the current circumstances, something must change in the economics of healthcare or we risk a complete collapse of the system as a whole (R. Buchanan, 1981) (U. S. Government, 2013)
Having health care for all Americans is crucial whether it is through happiness, a tragic experience, or vulnerable moments. Currently, there is a debate going on about the health care reform which is bringing up things about having access to health care, the costs, rights, and the quality of health care that is being provided. Although, there are costs that way beyond other countries rates, costing about twice as more as other nations health care; our society is still way behind advancements and efficiency.
The mixed public-private health care system in the United States is the most expensive in the world, with health care costing more per person than in any other nation, and a greater portion of gross domestic product (GDP) is spent on it than in any other United Nations. For the first time in American history, all Americans will have access to the affordable and the quality that health care can give us by the bill that was passed through the House, “The Affordable Health Care for American Act.
This act also helps people protect their choices of which doctors and health plans they want or what fits best for them as an individual. The health care reform bill creates a shared responsibility among all individuals, employees, and also including the government to make sure that we all have affordable health insurance benefits. The health care act can support people as individuals and as wholes, but at the same time it can also cost the companies more but having to make sure everybody is under the health care law.
It is mandatory that most residents are covered by some type of health insurance and by this being said, some companies may have to lose employees and cut them short of their jobs due to higher health care costs and having to insure everybody within the company. There are people all over the world who fear and applaud the law that has come into effect. Another reason you can disapprove of the law is because the elderly people are going to be treated as if they can no longer contribute to the society (Spokesman-Review, 2011). This can brings someone’s ego down and make them feel really depressed.
This being said, when the law took into effect, anyone over the age of 73 is denied of health care costs. What is that saying to our society? That once we are elderly, we should just give up and wither away because we cannot get health care for our elderly needs? Those who do support the establishment of a national health insurance system have many reasons for doing so. Generally, these people believe that health care is a right, not a privilege and should be available to all people regardless of employment status or income. Currently, most Americans receive health insurance through their employers.
The quality of the insurance depends on the job that a person has, which leaves many Americans with less insurance than they need. Doctors are also selective in which patients they treat, preferring to treat those with private insurance rather than those who are covered by Medicare, which does not pay as well. Looking back in years, health care meant that nurses would provide care inside the home with visits. There was no hospital to be cut in the pay, and other things that we are paying now that are not just covering things that go wrong with your health.
If we look forward 30 years from now, we can possibly comprehend what health care costs are going to be like. Given the pressure of how much the population is growing and how technology is getting more difficult and expensive, I do not believe any of the health sciences will be as we know them today. Although the statistics do not show much from year to year on insurance with its decreasing and increasing statistics, it does suggest that more individuals will be without insurance in the coming years. This is going to be due to health care costs and a change in economic stimulus jobs.
If you add both of these together, the numbers would be staggering and heartbreaking for those who really need insurance and can not afford it. In the health care trends, the under-insured and uninsured is going to feel like they have to wait to be seen after a time relapse of an illness they were just seen for when they have no money to cover the process when time comes due for a followup or additional treatments. This could be resolved with preventive health care measures, but for the uninsured individuals, the preventive measures are not going to be affordable.
In 30 years, most of the uninsured is not going to be able to afford the health care needs for a minor illness which may lead up to a deadly or chronic disease. Those who are against the idea of national health insurance often feel that it is not the government’s place to interfere in the health care system. They may feel as though it is unfair for those who contribute more to the system to get the same care as those who contribute less. They often feel as though health care is a privilege, rather than a right.
The United States is one of the few first world nations that do not have a national health insurance plan. Several groups are calling for change, however, and it is likely that changes will be made in the future. Main Health Insurance Plans Preferred Provider Organizations (PPO’s) which gives the insurer an incentive to stay under a particular insurance company by only asking for the least amount of co-payment in which you would agree to consult a network physician in the insurance company’s directories in behalf.
If you decide to see nother doctor that is not within their directory, you would have to pay a much larger co-payment. Point-of-Service Plans (POS), This is recognized as an open-ended HMO or PPO where an insured is permitted to use other well being providers’ plans and are likewise encouraged to get well being services from networks that are outside the coverage. You can also be asked to pay larger co-payments or even deductible costs. Health Maintenance Organizations (HMOs), this one is going to be your best bet if you are on a fixed income.
This company offers the cheapest policies possible and something that could possibly work around your income level. HMO is also flexible in the terms of the insurance coverage, and can be moved around to meet your needs for each individual. Standard Principles Many that pay for benefits would agree that the guiding principles set forth do not violate standards because of thoughts such as a person believes in getting what they pay for and many public held insurance programs are insufficient.
Areas such as corporate governance. isk management, suitability, and overall preferences are essentially opinionated but also held to higher standards due to various factors. Privately held insurance companies are more involved in financial allocations of risks as compared to public funded or government funded insurance entities. Medicare and Medicaid provide good examples of standard principles as all recipients receive the same treatments with the exception of special related instances where the doctor can override these principles as most know the government and private entities respect the concerns of the physician.
Most know and understand insurance is a business just like any other that comes along with all the pros and cons a business does such as; stakeholders, investment frauds, illegal claims, and allocations of risks. However, as more and more insurance companies move toward a common moral universalism Conclusion The evolution of health care economics has a multi-facetted approach. An approach that starts with fee-for-service, ends with today’s health care as a complicated arena of private insurers, employers, employees, managed care, and government insurance.
The elasticity of demand measures consumer’s response to market demand in health care services. The elasticity of supply depends on increase price for services and alternatives to services that will motivate purchasers (consumers) to consider health care as a luxury and not as a need. Consumers fear increase cost and will only seek medical help in case of emergency. Finally, the increase in price of services, and goods and current demands, health care organizations know that change takes time.