Economic History and Evolution of Healthcare Economics
During the course of history, health care economics has changed. It also has a lot to do with evolutionary changes that the U.S. went since inception. Which was the major factor that changed health care economics, in medical care and technology? We have to understand the importance of health care economics, and the cash flow system. This information will help management prepare for the future of the organization. Remember what drives health care economics is money, where the money is will help health care organizations to reach success.
The evolution of the health care system between the years 1750 and 2000, evolved from a simple home remedies and with doctors with very little training to a complex scientific, technologies, and bureaucratic system called “medical industrial complex”. (Randolph, 2009). In 1940’s the timeline of health care was revolving. This is when” Penicillin comes into use, prepared group health care begins, during WWII, wages and price controls are placed on American employers. The compete for workers, companies begin to offer health benefits, giving rise to the employers based system in place today, President Roosevelt asks congress for “Economic bill of rights”, including the right to adequate care, President Truman offers national health programs plan, proposing a single system that would include all of American Society and Truman’s plan is denounced by the American Medical Association ( AMA) and is called a communist plot by a house subcommittee.(www.pbs/healthcarecrisi/history.htm.).
The US government started doing research on the National Institute of Health and the Center of Disease Control. In the 1960’s social programs, such as Medicare, which is for the elderly and the disable, and Medicaid, which is for the poor. Prior to these programs the U.S. government founded another health care program which was the “Indian Health Services, the Public Health Services, the Food and Drug Administration, and established and executive cabinet-level agency, the department of Health and Human Services.” (Randolph, 2009).
As the years go by Americans needed more care, people were getting sicker and sicker with obesity, diabetes, and high blood pressure supply and demand was getting larger. Which economics taught us that demand for this care would be great. Health care costs continue to grow and supply demand relationship is now even wider. Where manage care plans removes patients from making decisions on their own medical financial matters, where they are now made by the insurance carrier and health organization. The discrepancies between supply and demand gap, that term used is “elasticity” which is defined as ‘the responsiveness of a dependent economic variable to change in influencing factors.” (Getzen & Moore, 2007). Increase demand as the result of s decrease in price. Where inelasticity is inresponsive to change, and demands fails to increase in proportion to a decrease in price. In order to reduce demand of care services you must reduce obesity, diabetes, hypertension, and stay healthy by exercise and eating right. If stay that way unhealthy the demand for health services will be more needed and this will drive the cost higher. So the demand for health care services than the supply will increase the cost of health care.
In the past 100 years, health care economics have changed. Technological advances and medicine advances affects the supply and demand in health care economics, when people are looking for medical care. In past years medical doctors were considered traders, they would trade product for services. Patient would have to pay for services in full for their medical services, but changes in policies and evolutionary progression of the U.S.