Health Care History Essay

1304 Words Aug 23rd, 2011 6 Pages
Running Header: Economic Terms & Health care History Paper

Economic Terms & Health care History Paper

Dina Mayo-Jones

HCS/440/ Economics: The Financing of Health care

Tina Rivenbark, B.S., M.H.A.

August 1, 2011

The economics of health care has been experiencing transformations throughout the course of our country’s history. The catalyst in the world of health care economics is money, . In 2010, health care costs were roughly 17.68% of the country’s gross domestic product (GDP) with a projected growth to 19.8% by 2020 (Cummins, 2011). Spurs in higher utilization, advancements in medical care, and the ever increasing population are the major contributing factors influencing such a change. This paper will look at the birth
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Born from two individual, yet similar health care economic systems, the BlueCross BlueShield Association is the parent company to nearly 40 different health care insurance programs throughout the United States. Almost every state in the country has some form of a BlueCross BlueShield product.

The BlueCross portion of the organization began at the Baylor University Hospital in Dallas, Texas during the 1920s. Hospital administrator, Justin Ford Kimball, created a prepayment plan to help aid schoolteachers receive hospital care during and after the Great Depression (BlueCross BlueShield Association, N.A). In the early days of BlueCross, the company was essentially a nonprofit health insurance carrier; where everyone was charged the same premium (Noah, 2007). Tax breaks enable the company to keep their premiums low. Age, gender, or pre-existing conditions were not considered during the birth of the company. With hospitals serving as the main participant, the goal was shifted to the signing of potential hospital patients.

In comparison to hospital care, BlueShield was born from the California’s Physician Service during late 1930s (Blue of California, N.A). Believed to be a similar model, BlueShield was developed within the lumber and mining camps found in the Pacific Northwest. The nature of these professions created an environment full of injury and

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