Economic Terms and Health Care History
The American Medical Association (AMA) was founded when healthcare was still getting started with doctors and hospitals (American Medical Association, 2011). During the beginning stages doctors would see patients using a bartering system. Doctors would make house calls and patients would pay with goods such as, food, fuel, cooked meals, animals, or anything else that the doctor could be in need of. Supply and demand, the doctor had something the patient needed and in return the patient supplied the doctor with something that he needed.
Between 1901 and 1940 healthcare and medication improved greatly. Hospitals became very important to healthcare. President Truman proposed a national healthcare plan, but it was shot out of the water by both the AMA and Congress (American Medical Association, 2011). In the 30’s the Social Security Act was passed. They omitted health insurance. Blue Cross, Blue Shield started offering private insurance for hospitals in dozens of states. In the past fifty years, health care costs have continued to rise to the point that some low-income families and the elderly are unable to get medical treatment.
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Decentralization of the hospital care system has prompted private companies to enter the health care industry. The 21st Century ushered in the biggest “can of worms” our health care system had ever seen! As time has gone on the economics of health care have changed just as much. The supply and demand of health care and the products that are used in today economics the demand for health care is great. More people are becoming sick and need the treatment from the hospitals and doctors. Health care is accounts for about one-sixth of the entire economy, which is more than any other industry.
In 2009 the health care total spending was around $2. 5 trillion, with the most of that gross domestic product being about 18% – a measure of the value of all goods and services produced in the United States (USA Today, 2009). “At that time it had a high increase of nearly 14% of gross domestic product in 2000 and a 5% increase in 1960, this health spending totaled just about $27. 5 billion- barley a 1% of today’s level, according to the Kaiser Family Foundation, a nonpartisan health policy group” (USA Today, 2009). Today the supply and demand of health care is big ompared to what it might have been back when health care started. We have more people today that have no insurance.
Today there are more than 47 million people without insurance. With this a problem it has caused a big issue for people who need treated for health care and cannot afford the medical care. The problem is that we have such a high demand for the health care that the elasticity for the price is not what everyone needs. The price for health care is so high that it causes people to go get treated and not pay for the treatment that they receive in an emergency visits.
With the prices not decreasing this has caused the inelasticity problem for the changes that are needed to happen in this world today for those people who need the healthcare. Officials have lobbied for years for a nationalized healthcare plan, on March 23, 2010 the Affordable Care Act became law. The idea is to revolutionize the health care industry, cut down on insurance fraud, make sure everyone is able to get medical services and insurance, and bring down health care costs. All this is supposed to be accomplished by 2014 (Healthcare. ov, 2010). With the Affordable Care Act this will help the microeconomics buy fixing the insurance rate problem, giving the demand to those who need the health care and supplying those with the jobs that are needed. With macroeconomics this will help to get the supply and demand of healthcare to other countries that are in need of health care. This has become a big thing for doctors to do are to give their services to countries that need healthcare and do not have any or very little care at all.
The goal is to improve the delivery of medical services, fund innovative and cost-effective medical procedures, cut the costs of health insurance, improve the nation’s health through prevention and better nutrition, and eliminate graft and corruption in the health care industry while raising it to a level that’s consistent with the rest of the world. Economics plays a big part of health care from patient care to hospitals and everything else in between.