MBA 664-7A: Healthcare Administration
January 13, 2015
Health Care Delivery System History
As we continue to live out our lives from day to day, the history of this country is continually being written about our health care system. Looking in past at what the U.S. health care system used to be, we can honestly say that it has come a long way. As was seen in 2010, an increase in health care costs reached a staggering 17% of the country’s gross domestic product, it could easily be said that by 2020 health care costs could increase by another 19% (Cummins, 2011). Factors that can be taken onto consideration for such increases include the continuous growth of the country’s population and the increasing demand of medical services throughout the communities. This paper will discuss a brief history of the country’s health care delivery system and how far it has evolved over time.
Background History Back when health care was first introduced in the United States, people did not believe it to be an important aspect of living; it was more of a commodity for those that could afford it. Up until the 1920’s, people turned to self medicating as a solution and did not really look to health care as a necessity. This is mostly due to the lack of employers not offering some form of health care coverage to their employees. Most citizen’s salaries were only enough to take care of their everyday needs and did not stretch any further, so out of pocket medical costs were not acceptable in those times. Urban areas starting to form as years go by and that cause an issue for in home medicating and housing the sick. This is also around the time when the cost of medical care began to increase resulting higher premiums. A mass growth in medicals plans began to form in the country during the era of the Great Depression. In the 1940’s, the country became introduced to health care prepaid groups. By the time World War II took place more and more employers started offering some form of health care coverage to continue to stay competitive within their markets. The introduction of health care coverage can be dated back to the late 1800s, during a time in which the barter system was the country’s sole way in conducting business. “The healthcare delivery systems’ origin can be dated back to the 1890s, when physicians agreed to provide prepaid medical care to lodges, fraternal orders, unions and other associations of workers. These groups already supplied members with social benefits such as life insurance, so paying for health care was a natural extension for them”, (Dranove, 2000). Medical plans back then were solely based on accidents that they had encountered and nothing more. Later in the 1890s, illness based care was introduced into the health care delivery system. Even in the beginning stages of the health care delivery system, the country saw an enormous change in these services and its costly expense to maintain. By the time the 20th century came around the country’s knowledge in medicine had grown. As the country’s poverty rate began to grow, the need for a more governed health care delivery system to fit the needs of its citizens also grew. With the unpredictable and concerns of illnesses continuing to grow, more and more individuals were not being successful in self-treatment and being able to diagnose their medical needs. Health care insurance providers became the most feasible solution.
Introduction to Health Care Coverage Massachusetts Health Insurance, a company out of Boston Massachusetts, announced the first policy that covered travelers amongst railroad and boat accidents in 1847 (Hummer, 2010). Another company that is looked at to be influential within the health care system is BlueCross BlueShield Association. Their introduction into the system has contoured the foundation of the country’s current health care delivery system. Before becoming the association that