Healthcare History

Health Care History The United States health care system is currently getting ready to evolve tremendously through the organization, management structure, and payment structures. The economic component in health care is very important to understand in order to structure it successfully. This papers discusses the evolution of economics in the health care system and the structure of health care funding timeline.
History and Evolution Health care economics presents an information framework were efficiency and equity goals are pursued. Furthermore, economics establishes a framework by maximizing benefits using resources at hand. Kenneth Arrow, the person responsible for mentioning the idea of health economics as a discipline, wrote an article titled “Uncertainty and the Welfare Economies of Medical Care” in 1963. The article discusses how the medical care industry benefits society compared to the “norm”. Furthermore, Mr. Arrow wrote about the significance of supply and demand. Arrow discussed that the average person has the characteristic of only seeking medical care when they are suffering from a critical injury or illness. Its not common for the average person to receive routine medical services on a regular basis. As Mr. Arrows discussed supply condition, he quoted “Entry to the health care profession is controlled by licensing. Licensing manages the supply which consequently increases the cost of medical care”. Medical care was relatively expensive in the 1970’s; in fact, the rates were so extensive that they sometimes overwhelmed living expenses. In 1979, medical care expenses escalated to $2 billion dollars; which accounted for 9% of the GDP at the time. This number is even more significant because it’s a marginal increase from the $7 billion in 1970 which made up 7% of the GDP. Its also important to