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Economic Terms and Health Care History

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Economic Terms and Health Care History
HCS/440
March 03, 2013
Michele Burka

Economic Terms and Health Care History
Over the years healthcare economics have changed tremendously. These changes have everything to do with the evolutionary changes that have occurred in the United States which have influenced this dramatic change in the economics medical technology. The main key that moves all things or drives that are through health care economics is the money and money helps keeps an organization established and is the key to success. The cash flow system is something that the organization uses to help run the business and make decisions for the future and learning the health care economics are important. “Economics is the science that deals with the production, distribution, and consumption of goods and services or the material welfare of human kind.”
We can’t use the ways of approach to health care services as we have done before with the depression or World Wars. The United States technology had to change because of the supply and demand and a new system have to be continuously be made to help United States population. A long time ago the person that needed services paid for their services that was needed with private funds, now today we have insurance companies assisting us with the cost, also third parties that cover the majority of payments, then if need be we pay a small portion with the private money. Who do you think is paying for this upcoming change that continues to happen every day? Before our time people did a lot of trading for things they couldn’t afford or if they didn’t have any money. Physicians would trade medical treatment for things such as livestock, jewelry, cotton and grain as the patient form of payment if the patient did not have any money.
Now during this stressful time we would like for the insurance companies to make the cost affordable to help meet the needs of the people and more of people would have insurance if this could be done. When the physicians decided to join the American Medical Association, this help the physicians receive payment for services that rendered to patient. Blue Cross Blue Shield came up with the private insurance for hospitalization and this seems to be the reason why the price increased significantly for medical care. This was the first eye opener for payer to try and increase the price because now there is a demand. They have created an insurance that assist retire, disabled, or lower income families with insurance which are Medicare and Medicaid but there are countless other insurance plans offered to other individuals.
The laws of the microeconomics of health care are changing frequently too; this is because of the inflation in the cost of health care. There is a competitive market and sometimes the demand declines, prices drop and this causes the providers to compete with such intense for their business. The providers giving service struggle with trying to take a role in helping controlling cost. It is important that the macroeconomists are aware of issues in health economy and also know the issue of their health policy. There has been research to prove that millions of people in the United States households are impoverished every year by health expenditures, poverty alleviation and investment in health can effect on the development. “The price elasticity of expenditures for medical care felt to be by patient to be not fair and insensitive, even to the changes in the price for health care prices.” Some people are in denial of the changes and this inelasticity demand the people will no longer have money to keep their health needs up which will not be good for them.
Money plays a major role in the business of health care and there are so many people in the world that are in need of health care. The health care that the some of the people need requires the newest technology, treatments, to give the best of the quality of care. Unfortunately there is always new equipment coming out every year and this causes cost for services to go up. As long as there are sick people the need will continue to grow which requires the newest of the new to help the demand of the people and this continues to change the economics and there are motivating forces that are behind health care economics.
Reference
Health Economics, and Health Policy. Health reform and Timeline. Retrieved from http://www.nlm.nih.gov/hsrinfo/health_economics.html
EH.Net.(2010). The Rising Cost of Medical Care. Retrieved from http://eh.net/encyclopedia/article/thomasson.insurance.health.us
US Health Care System. (2012). US Health Care Funding Reform. Retrieved from http://www.historycommons.org/timeline.jsp?timeline=us_health_care_tmln&us_health_care_tmln_us_health_care_reform_2009

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