Economic Terms and Health Care History
HCS/440 - ECONOMICS: THE FINANCING OF HEALTH CARE
June 6, 2011
In the health care field the economics is rapidly changing over the course of the history in the United States. The major contributing factor of the changes to health care economics is due to advances in technology and medical care even though some of the changes are because of evolutionary reasons. Many things within a health care system change including the payment ways, organizational policies and procedures, management structures and most important the rules and regulations the state wants the facility. The changes are often referred to as ...view middle of the document...
As the economy changes the supply and demand of the facility will change as well. Some other terms used in economics in the health care field are elasticity and inelasticity. Elasticity is the ratio of the percentage of change in one specific variable to the percentage of change of another variable. In other words, it is a way to measure the responsiveness to a change that is made such as an increase in demand as a result of a decrease in price. On the other hand, inelasticity describes a variable that does not change much in response to other changes. So inelasticity is unresponsive to changes within the facility. Then the total market value of all the goods and services produced within a certain period of time is known as the Gross Domestic Product. These terms are ways to describe the way a facility is managed financially.
Many areas of a health care facility depend on the economic history of the facility.
In the 1900’s, the American Medical Association (AMA) was created and by 1901 the AMA becomes a national organization with the beginning of organized medicine. In 1910, American hospitals are required to value antiseptics and cleanliness and use medications for the relief of pain. Another organization is created known as the American Association for Labor Legislation (AALL), which organizes the first conference on social insurance. In 1920, the discovery of Penicillin is made but it will not be used to treat infections for many years. In 1930, the depression happens and changes the priorities of the facility with emphasis on unemployment benefits. By the 1940s Penicillin is now being used to treat illnesses and during this time the World War II happened. During the war wages and price controls were placed on American employers and employers began offering health benefits to their employers. In the 1960’s, the cost of hospital care...