History and Evolution of Health Care Economics Essay

According to jhsph.edu, “health economics is an applied field of study that allows for the systemic and rigorous examination of the problems faced in promoting health for all. And health economics aims to understand the behavior of individuals, health care providers, public and private organizations, and governments in decision making” (Howard, n.d.). Overall, health care economics are important to patient care in the aspect of becoming a completely satisfaction based institution. For example, some hospitals receive additional funding from Medicate if the hospital has a high patient satisfaction rating. It also blows my mind that of most countries, the U.S. spends the most money on healthcare, and still has a very high rate of infant mortality

There have been many studies performed focusing on the rising costs of health care and some of the findings state that the rising cost of healthcare premiums is a worldwide problem. However, I believe they are higher in the U.S. In 2015, U.S. health care costs were $3.2 trillion. That makes healthcare one of the largest U.S. industries, equaling 17.8 % of the Gross Domestic Product (GDP) in comparison to the late 1960s; where healthcare costs were only $27 billion, or 5% of the GDP, which averaged $9,990 per person each year. The main reason for the rising cost of healthcare is a combination of government policies and lifestyles changes. Examples included lack of coverage or costly coverage, lack of available coverage for

One of the basic tools that economists use is elasticity and how the concept relates to health care funding. Generally elasticity can show the similarities and differences in a demand for a good or service. Elasticity provides a way to measure how sensitive supply and demand are the change in price. Economists can use this tool to predict what will happen to health care spending when prices shift.

Costs have escalated for a host of reasons. Americans’ health needs increased as their for example. Coverage grew to include catastrophic illnesses, not just common ailments. Ma added retiree health benefits. Medical techniques and technology became more sophisticate prescription drugs acquired an expanding role in disease management and illness preventio medical inflation had become a serious business issue; by some yardsticks, costs rose at a f decade than in the 1990s.

A key question from policymakers is why spending on health care consistently rises more rapidly than spending on other goods and services. One of the studies3 concluded that approximately 63% of the rise in real per capita

If we compare the health care financing of past and that of recent times, there exists a dramatic shift in the trends of the issue. In the past times, the

“The amount people pay for health insurance increased 30 percent from 2001 to 2005, while income for the same period of time only increased 3 percent.” (Source: Robert Wood Johnson Foundation). The rising cost of healthcare is a huge problem in America today. In this paper I will analyze the different issues and causes for the increase in cost.

There are many factors that have influenced the changes of health care economics. Money and technology has definitely been the reason for the change of health care economics over the years. Money is want makes the economy evolve. There will be advancement in technology and there needs to be people are managing these to keep up with the changes. The U.S. has definitely progressed as far as influencing factors to change in new advancement of technology and medical care. Having a good financial manager in your organization will prepare for these upcoming advancements and changes. Money drives these advancements in

The rise of the cost of healthcare has been a hotbutton political issue in the United States in recent years, especially with the passage of the Patient Protection and Affordable Care Act, commonly known as Obamacare. In 1995, the United States spent a little over 13 percent of its GDP on healthcare. By 2013, spending on healthcare had increased to around 17 percent of GDP (World Bank). This trend is projected to continue; healthcare spending will reach some 34 percent of GDP by 2040, with state and federal Medicare and Medicaid spending reaching 15 percent of GDP (Council of Economic Advisors). For comparison, the entire US federal government spent only 20.7 percent of GDP in 2015 (Office of Management and Budget 163) What is driving this

Healthcare in America is a very complex system. It is very different from what it used to be. It is moving from what was considered an indemnity type of care plan into a more managed care plan. There are a lot of factors that has influenced the fast growing system. Factors that are considered a contributing to this is the growth in the US population, people are living longer than before. An increase in technology, easier access to information. There is an alarming growth rate in the allied healthcare professionals. The cost and dependence on drugs and the pharmaceutical cost has increased. The rising cost of individual and family healthcare insurance. Because of the rising cost of malpractice insurance, case settlement and jury awards.

There are 10 key economic concepts of health care. Each of the economic concepts is important when evaluating the different issues related to health care such as the increasing cost of health care. Henderson (2015), list the 10 concepts as follows: scarcity and choice, opportunity cost, marginal analysis, self-interest, markets and pricing, supply and demand, competition, efficiency, market failure, and comparative, advantage. The concept scarcity and choice address the issues related to the limited supply resources and the need to economize (Henderson, 2015). An illustration of the importance of the scarcity and choice concept is when there is a low quantity of available resources to meet the demand of individuals and rationing occurs. Opportunity cost emphasizes

One of the issues that is widely discussed and debated concerning the United States economy is the healthcare system. Unlike in the majority of developed and developing countries, the healthcare system in the United States is not public, meaning that the state does not provide free or cheap healthcare services. This paper addresses many of the factors contributing to the rising cost of healthcare.

Grossman’s model states that a person utility is based on health (H) and other non-health related goods (Z) that the person consumes. The production possibility frontier for Grossman model shows the tradeoff between home good production (Z) and health (H). Unlike usual production possibility frontiers, an individual needs an optimal level of H to maximize consumption of Z goods.

1A. Market failure is a situation in which the allocation of goods and services is not efficient. In any given market, the quantity of a product demanded by consumers does not equate to the quantity supplied by suppliers. This is a direct result of a lack of certain economically ideal factors, which prevents equilibrium.

Healthcare didn’t always exist in the United States. Before the 1920’s, most people didn’t have health coverage. Most people were treated at home and hardly anyone, except a few large employers offered healthcare. Everyone else paid out of pocket. As the population shifted from rural areas to urban centers, families lived in smaller homes with less room to care for sick family members (Faulkner 1960, p. 509). Increasing requirements for licensing and accreditation, in addition to a rising demand for medical care, eventually led to rising costs. By the end of 1920s, there was an increased demand for medical care and the costs of medical care increased.