The History of Health Care EconomicsIn this paper the author will describe the history of health care economics along with the evolution and timeline of health care funding. Gaining insight from economical terms can assist with understanding the history and future changes; terms such as, elasticity, inelasticity, supply and demand. Health care costs are changing over the years and by understanding the history of health care economics will help individuals be prepared for future amendments.
History, evolution and timeline of funding. Economics in the United States (US) health care is experiencing transformations during the course of history. Previously, the economical changes in health care may be due to the evolutionary modifications in the US. The key contributing causes for economic health care changes are the advancement of technology and how medical treatment is offered. In the late 1800’s is when America began to see the formation of medical profession. The education practices for physician became formal and arrangements for hospital structures began (Wasley, 1993). By the early 1900’s America was the largest population to have hospitals. However during this time the U.S. encountered an economic decline that involved a stock market crash; this incident was known as the Great Depression. The outcome of this event made it hard for American citizens to pay for their medical care.
The Economic System of America (US) In the 19th century, the American system of government was dominated by an executive branch staffed by a chief executive. At the founding the U.S. did away with the executive branch of government.[2] In the late 19th century, the U.S. was dominated by an executive branch staffed by a chief executive. In this situation, Congress had to allocate an appropriation (i.e., federal funds) to support the head of the government. However the United Sates Congress passed a resolution to replace the executive branch with the Supreme Court from which the executive branch would be established.
In the late 19th century, the American system of government was dominated by an executive power staffed by a chief executive. At the founding of the U.S. did away with the executive branch of government.In the early 19th century, the U.S. was dominated by an executive power staffed by a chief executive. In this situation, Congress had to allocate an appropriation (i.e., federal funds) to support the head of the government. However the United Sates Congress passed a resolution to replace the executive government with the Supreme Court from which the executive power would be established.By the 19th century, the prosperity of the U.S. remained highly influenced by the economic system of the United States. When the industrial revolution of the 19th century enabled a wide variety of different methods of obtaining the labor force in countries such as Germany and the Netherlands, the economy of the United States became increasingly industrialized. With the industrial revolution of the 19th century empowering large numbers of skilled workers it was the aim of the Great Depression to control the industry of the United States. The federal government was able to purchase labor from foreign companies which were unable to obtain the capital needed to meet industrial needs. The government also sought other means of making these necessary changes in production and distribution, from the labor unions to organized workers to the state to the general government. This trend of expanding industry in the United States resulted in a rapid increase in the industrial productivity of the United States.[3] With the economy growing it became easier for the federal government to use the resources available. In his famous speech, President Johnson said, “Government can do what no other system of government can.” This economic development led to the opening of new avenues for foreign capital to invest in the United States. The first form of investment into the United States by foreign banks was the industrial debt. The United States increased foreign capital by importing goods and services from other nations abroad. With the industrial debt financing it became increasingly difficult to support the production of their own products and to finance their own defense. The United States gradually increased its level of government through increasing the size of the state. The Great Depression was triggered by political turmoil. The United States started to run out of money, leaving behind its own financial institution. The Federal Reserve System of the United States was created in 1913. The federal government raised the interest rate from 2.25% to 4.25%, increasing its control over this government’s reserves from 2.5% to 4.5%. The central bank raised interest rates from the 6% rate of the dollar to 9.25%, expanding its control over the money supply from 14 percent to 18%. The Federal Reserve issued its first note at the end of 1916 and the second at the end of 1919. The United States entered World War I in 1917 and war began in October of that year. The central bank of the United States provided the money supply with more than $5 trillion and it also provided about $10 trillion in federal payments. The United States had the most important banks in
Hospitals with higher fixed cost had less flexibility for patients than doctors who made allowances for financially stricken. The hospital’s decrease in patient payment went from receiving $200 for each patient to $60 per patient. The reduction in funds caused hospitals to seek out insurance plans. The plans would help the hospital have a steady cash flow without having financial problems later (1993). The creation of insurance plans was done in several different cities by nonprofit hospitals. To strengthen the income and increase patient participation, the insurance plan gave subscribers a choice of medical care provides. The multiple hospitals plans help to establish Blue Cross (1993). In the 1960’s, The Social Security Act, employer-provided health insurance and the government had taken responsibility in health insurance. The additions would provide insurance for the elderly and less fortunate; these developing expectations would alter supply and demand (Getzen & Allen, 2007).
Understanding how the flow of funds falls in line with knowing what transactions take place between sellers and buyers. It is best to also understand where the monies