History and Evolution of Healthcare Economics

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Running Head: WHAT PLAGUES THE SYSTEM History and Evolution of Healthcare Economics Introduction Health care costs and coverage are prime considerations in most everyone's life (Wasley, 1993) in the last seven decades. Workers weigh the costs of health coverage when changing jobs. The struggle between the patient and the doctor keeps getting tighter. In the meantime, costs keep increasing. Despite attempts at reforms, today's health care has not provided the targeted most cost-effective care. Rather, it incurs volumes of medical errors and waste. Before proceeding to address the situation more rationally, a keener review of the evolution of the industry in the US should be made to discover what has been making it sick and chaotic. At once, one can see how much regulation and government control and those from interest groups are behind and create the trouble (Wasley). Healthcare Economics The medical profession was established and health insurance was introduced at the start of the 20th century (Wasley, 1993; PBS, 2012). The Great Depression in the 30s slowed down the expansion of health care services, which were then booming. Hospitals could not put up with financially burdened patients because of higher fixed costs. Hospitals then resorted to insurance plans to assure a steady cash flow. Baylor University Hospital in Dallas, Texas introduced the first plan in 1929. Groups of non-profit hospitals in many cities put up their own hospital insurance plans, which
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