Economic Terms and Health Care History
HCS/440 Economics: The Financing of Health Care
March 3, 2015
Economic Terms and Health Care History
The evolution and history of health care economics have transformed tremendously during the course of our country’s history. These changes can be contributed to the evolutionary growth in the United States since the beginning but it is also because of the continuing advances in health care and technology such as diagnostic procedures and pharmaceutical. As in any business, health care was moved forward and changed with money as the driving force to make profits and sustain in business. The health care industry has to find a way to thrive and also make sure people are getting proper and needed care to continue moving forward while keeping the nation healthy. According to Getzen (2013), “Economics is the science that deals with the production, distribution, and consumption of goods and services or the material welfare of human kind.” (p. 2). History shows that back in the 1800s and 1900s many doctors would exchange services for non-monetary things like livestock, cotton, grain, and other as forms of payment if that person was not able to pay for the services rendered. When America started to progress in technology and other influences, such as in World War I, World War II, and Depression, a method of obtaining medical services was put into aid for the American people. The supply and demand of doctors to patient in the 1960s makes the government reconsider and help with education to get more people in health care. During this time, there were also issues with getting insurance to those who don’t work, like the elderly because of costs. The use of Medicare and Medicaid become available to the public with the law being signed by President Johnson. As Drake noted, “The final phase in the development of the medical care market began around 1980, when the over-supply of providers had grown so large that various components of the industry began to compete for revenues.” (p. 328). Since the development of these two government health care options, the costs escalated for care and continue to do so today. The Medicare and Medicaid issues are part of the big picture in our country and macroeconomics. The issues of health care will forever continue because there were not a lot of agreements on decisions and changes that can be made. Ever since health care became more complicated and a demand as a right from people it will never be set completely right. Everyone has different needs and depending on your location and certain services could cost different just because of certain location. This is part of the microeconomics in our country and pricing the health care services. Our health care industries have now become a trillion dollar economy. Making money is the basic principle of economics, but in order to make money, there must be the exchange of goods and services with sellers and buyers in the market. As Getzen (2013) stated, “These goods and services to those sellers and buyers of the growing industry of health care has resulted at 16.8 percent of the United States gross domestic product as of 2013.” (p.4). The reason for the GDP is because people are no longer paying out of pocket but rather they are now relying on the financing of a third party. The history of our health care economic had undergone relentless changes over the pathway of history in the past decades. Technology advancements and how medical treatment is offered played a major role in contributing causes for economic changes like the increase cost of health care and the supply and demand of care. The more equipments and treatments are needed, the more health care is needed to millions of people who need some type of care. Although the price of health care is continuing to rise, the demand is not decreasing at the same rate. This will continue to occur because unlike other commodities,...
References: BlueCross BlueShield Association. (N.A.) Blue Beginnings. Retrieved July 31, 2011 from: http://www.bcbs.com/about/history/blue-beginnings.html
Getzen, T. E. (2013). Health Care Economics and Financing (5th Ed). Hoboken, NJ: John Wiley & Sons.
Reisinger, A. L. (1995). Book reviews -- reforming the health care market: An interpretive economic history by David F. Drake. Political Science Quarterly, 110(2), 328. Retrieved from http://search.proquest.com/docview/208264480?accountid=458
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