Economics of Health Care Essay

927 Words4 Pages
Economics of Health Care United States health care economics has been through multiple renovations. Money is the substance to health care economics and is of vital to economists, policymakers, researchers, and organizational leaders. In health care economics the gross domestic product (GDP) is of paramount importance and in evaluation of, there is a remarkable rise in GDP from 5.2 percent in the 60’s to 16.2 percent in 2008, and an anticipation of 19 percent or more by 2019 (Hartman, Kornfeld, & Catlin, 2010). Spurs in higher utilization, advancements in medical technology and increasing population are the major contributing factors influencing the changes in GDP. This paper will discuss the birth of economics of health care through the evolution of supply and demand to microeconomics and macroeconomics of health care funding. History- The Birth of Economics of Health Care Since the 1800s economics of health care methodologies for funding have continuously been changing. The beginning started in 1847 with the founding of the American Medical Association. At this time hospitals and physicians where just getting off the ground (American Medical Association, 2011). In the beginning physicians would be paid for services by the bartering system. The physicians would make a house call to the patient and where given goods such as flour, eggs, cooked meals. 100 years ago the supply and demand was exactly these goods or other services. Between 1901 and the 1940’s health care became more prominent with advancements. Medicine and hospitals became more developed. However, poverty required the necessity for an operational health care economic system. President Harry Truman proposed a national health care plan, but it was denied. As immigration increased illnesses and poor labor conditions rose, resulting in future medical needs and costs to be a concern. This
Open Document