Evolution Of The Health Care System

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There was a time when organized medicine did not exist. With the creation of the American Medical Association in the early 1900s, the United States started the evolution of the health care system we currently utilize. In these early days, formal insurance coverage offering preventative or general health care coverage did not exist. However, workers in dangerous jobs may have been offered accident or sickness settlements. Throughout the decades, economics has played a role in developing the health care system by evaluating social problems and changing the course of government regulation (Johns Hopkins, n.d.). In order to continue the evolution and improvements in the health care system, it is important to understand the history of health …show more content…
However, this campaign was short-lived as the needs of World War II diverted the attention of the United States. In 1929, prepaid insurance was instituted Baylor University Hospital in Dallas, Texas for school teachers. This prepaid insurance was the predecessor to what is known now as Blue Cross. It wasn’t until the early 1940s that states such as California developed an insurance plan that helped cover physician visits. After World War II, the U.S. Congress passed the Wage Stabilization Act, which offered more generous health care benefits. President Harry S. Truman tried to establish a government-sponsored health care plan, but this was quickly dismissed as an attempt to jeopardize the freedom of Americans. In 1965, Medicare and Medicaid was added to the Social Security Act of 1935 to help those 65 and older or low-income and physically challenged populations. Again in the 1970s, due to rising health care costs, there was an effort to make a national health care plan. In the early 2000s, President George W. Bush helped form Medicare part D to help subsidize prescription drugs for the elderly. The Affordable Care Act and the creation of health insurance marketplaces were formed in 2010 to make help more Americans afford insurance. (Knightlab.com, …show more content…
Health economics is described as the “applied field of study that allows for the systematic and rigorous examination of problems faced in promoting health for all” (Johns Hopkins, n.d.). An important factor that economists consider when looking at the economy is the gross domestic product (GDP). The GDP is the “primary indicator used to gauge the health of the country’s economy” (Investopedia, 2015). Economists utilize the GDP when studying microeconomics and macroeconomics of health care. Microeconomics studies health care markets and how it affects “consumer behavior, individual labor markets, and the theory of firms” and macroeconomics studies the economy as a whole (Pettinger, 2013). One aspect that microeconomics focuses on is the current supply and demand of the market. Supply is defined as services that health care can provide to the public (Getzen, 2013, p 23). When analyzing health care supply, economists look at resource utilization, costs, and outputs. In addition, microeconomics looks into consumer demand. Demand evaluates the need for health services (Getzen, 2013, p 23). While the demands for good health may not be something enjoyable, improved health is a universal goal (Parkin, 2009). When further evaluating demand, economists look at the market’s elasticity and inelasticity demand of price

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