Read Me First HCA/210
Weeks One and Two
Introduction
The health care industry in the United States is quite unique from other countries. Unlike most developed countries, it is not run by the government where everyone has access to health care (Torrens, 2002). Also, over the years, economics, politics, social issues and technology have influenced today’s health care delivery system. Health care in the United States is part of a free enterprise system. There are a host of drivers to consider when historically reviewing its divergent systems, funding, trends, business practices, demographics, and ethical considerations.
Changing population and demographic composition over time has changed the way health care is delivered today as opposed to 50 years ago. People are living longer today than in previous years. Life expectancy continues to increase. The National Vital Statistics Report (2010) indicated the average life expectancy has risen to 77.9 years. In totality, experts consider population change using three components: births, deaths, and migration (Denver as cited in Shi & Singh, 2001). Basically, “lower death rates, lower birth rates, and greater longevity together indicate an aging population” (Shi & Singh, 2001). Each of these components have manifested over the past 50 years contributing to longer life spans.
Increased access to health care services ultimately has led to increased use and costs. Increased costs have forced the public and private sectors to look at methods of cost containment. In 1965, the U.S. Congress passed Title XVII of the Social Security Act (1935). It created Medicare and Medicaid programs. The entitlement offers health care services for older adults and the poor (Torrens, 2002). “The Medicare program covers medical care for (1) persons 65 years and older, (2) disabled individuals who are entitled to Social Security benefits, and (3) people who have end-stage renal disease, such as permanent kidney failure requiring dialysis or a kidney transplant” (Torrens, 2002, p. 207).
Health care is considered big business in the United States. Health care costs contribute to a growing percentage of the Gross Domestic Product (GDP) of the U. S. economy. Experts report in 2009, health care’s share of the GDP rose to 17.6 percent. This marks a jump of one full percentage point from the previous year (The Commonwealth Fund, 2011). This represents an alarming trend that has consistently grown despite efforts to contain health care spending in the United States.
Health care delivery such as hospital costs and physician or clinical services are the two largest portions of health care spending (Kaiser Family Foundation, 2009). Privatization of health care came about when the government incentivized employers by revising the Internal Revenue Code. By the 1950’s, employers were readily offering major medical insurance coverage. This move was in an effort to reduce employer’s financial risk against prolonged and catastrophic illness or injury (Mayer & Mayer, 1984 as cited in Shi & Singh, 2001). Employer groups typically assume responsibility for selecting health plans and facilitating employment enrollment. The employees have a share of cost typically in the form of payroll deductions. The administrative functions are assumed by the chosen insurance company (Shi & Singh, 2001). Many hospitals and other providers of health care services receive payment for services through such private insurance.
Cost containment initiatives to curtail rising health care costs and better health care for senior citizens and children represent major hallmarks during the past 50 years. One change to better manage rising health care costs is Medicare’s Prospective Payment System. This concept was first introduced during the 1990’s. It consists of diagnostic related groups (DRGs), a classification of 400+ categories of illness that were used as the basis for reimbursement for hospitals. Each patient is assigned to a ccategory of illness
