Economic Terms and Health Care History
June 30, 2014
Ms. DAWN CHIABOTTI
Throughout the history of the United States, the economics of the health care system has experienced many changes. There are many factors to consider that has been the drive behind many of the changes within the health care system. Medical and surgical technologies are some factors that relate to the changes in health care. Besides these factors, allocating sources to fund health care services has always been the most critical factor. One might consider the economic term supply and demand when looking at the history of health care economics and the primary funding source. Health care funding has always been a challenge and will continue to be a barrier due to the lack of resources within our nation. The primary source for funding medical services has faced many changes throughout U.S. history. The need to utilize medical services has increased, which led to the implementation of health care insurance. This came into effect due to the growing demand for health care services at a lower outer pocket expense. The challenge of funding medical services has always been a struggle. It was President Harry Truman that first approach Congress to enact a national insurance program back in 1945 After many failed attempts, President Johnson finally signed into law the Medicare and Medicaid program on July 30, 1965. Medicare is a government funded program that insures individuals 65 and older and those who are permanently disabled. Medicaid is also a government funded program that provides coverage to indigent Americans. Health care in the United States represents an average of 17% of the GOP. Medical services have grown to be a trillion dollar business. The government is the largest source for funding health care expenditures. Most of the funding comes from the Medicare and Medicaid programs. The rest of the funding comes from private sectors. Funding health care is continuously changing. It involves payments going and receiving. Allocating resources that impact funding plays a big factor in how economists view health care funding. This includes the rising demand for quality and accessible health care. Economists use certain concepts to help better understand health care services and the determining factor in health care funding. One of the basic tools that economists use is elasticity and how the concept relates to health care funding. Generally elasticity can show the similarities and differences in a demand for a good or service. Elasticity provides a way to measure how sensitive supply and demand are the change in price. Economists can use this tool to predict what will happen to health care spending when prices shift. Also, economist use inelasticity to determine how the demands for health care services. Most medical care is relatively inelastic. Pain, critical needs, fear of uncertainty, and insurance tend to reduce the role of price in patient decision making. Most hospital face inelastic demand, especially for emergency services, yet they charge less than profit-maximizing prices. Economists also look at the microeconomic market within the United States and how the market affects the overall funding of health care. Economists also use macroeconomics to how the changes in the economy as a whole affect the price and funding of health care and how the trends of the economy can greatly impact health care funding. The economy as a whole also has a profound impact on health care expenditures. Health care funding is and has always been a challenge in the United States. Through the U.S. history, allocating funds for health care services has been a barrier. The United States struggles to allocate resources to create a viable strategy on health care funding. In parallel, health care funding cannot be successful without first looking at the socioeconomic factors. Health care economics again...
References: Getzen, T. Moore, J. (2007). Wiley Pathways Health Care Economics (1st ed.). John Wiley & Sons.
Please join StudyMode to read the full document