Chnages in Health Care Essay

This essay has a total of 1499 words and 8 pages.

Chnages in Health Care

In today's society, public perception of the U.S. health care system is widespread. Many
people are satisfied with the advancements that we have made in the medical community.
Less than one hundred years ago, health care was non-existent. Today, it is one of the
leading industries in our country and worldwide. However, many people criticize where
health care is going. They believe that doctors are giving up quality care and replacing
it with the quantity served. This paper will describe the changes that have occurred and
are occurring in the US health care system. Beginning with the health care environment,
we will see that although we are downsizing some subdivisions, at the same time we are
increasing access to health care by providing a variety of different services. Next, the
rapid increase in medical insurance since the mid-1900s will be discussed. Medicare and
Medicaid were created under the Social Security Act. Since then, medical care to elderly
and to the poor in our community has improved drastically. Finally we will discuss why
the public perception of a growing medical community is sometimes negative. There are
steps that need to be taken to keep the pace of change in our health care system to match
the changing needs of our community.

Health Care Environment
Although the American public and Congress resisted the health care reforms proposed by
President Clinton in the failed Health Security Act of 1993, market forces continue to
alter the health care environment with remarkable rapidity. With consumers, employers,
government, and commercial payers intensifying their demands for lower costs, higher
quality, better access, and more information about outcomes, most hospitals have
undertaken a series of competitive efforts to retain and, if possible, improve their
market positions. Many have engaged in mergers and consolidations intended to effect
economies of scale and place them in a better position to negotiate with managed care
organizations and other payers. Others, in communities with excess hospital capacity,
have either closed or been converted to other uses, such as ambulatory or long-term care

Between 1980 and 1993, approximately 1,000 hospitals closed in the United States, and
hospital admissions declined by 11 percent. Although this may seem strange with an
increasing population base, major hospitals are now being supplemented by smaller
ambulatory and nursing facilities. The decline in hospital admissions is a blessing to
many who have become accustomed to waiting long periods of time for medical care.
Furthermore, with an increasing number of medical services occurring in ambulatory
settings, hospitals are facing the need to reduce inpatient capacity and refocus their
service efforts on intensive care and other inpatient essentials. The major reformation
of the hospital industry has been a formidable challenge to traditionally conservative
hospital executives, boards of trustees, and medical staffs steeped in their long-standing
institutional cultures. Many find it difficult to comprehend the inevitability of health
care system shifts and the magnitude of the organizational changes that will be required
for institutional survival.

Health Insurance
The transformation of hospitals from simple, charitable institutions to complex, technical
organizations was accompanied by a parallel growth of private hospital insurance. The
percentage of the United States population with hospital insurance grew from 9 percent in
1940 to over 74 percent in 1986 (Stevens, 324). This change is outstanding. Medical
insurance should be made available by most employers, and in today's job market it is
becoming a commonplace. By the 1960s, billions of dollars were flowing into hospitals
from insurance companies, such as Blue Cross/Blue Shield, medical society plans, and
others sponsored by unions, industry, physicians, and cooperatives. The availability of
hospital insurance removed an important cost constraint from hospital charges. The
availability of insurers to cope with ever-rising hospital costs by distributing
relatively small premium increases over large numbers of subscribers opened the floodgates
to hospital admissions. Expanding hospital services and relatively unrestrained
reimbusrment rates created an inflationary spiral that was to persist for decades.

In addition, medical advances and medical specialization encouraged hospitalization, and
the hospital industry expanded to meet the demand. Following World War II, the American
Hospital Association convinced Senators Lister Hill and Harold Burtons to sponsor
legislation that provided federal monies to the states to survey hospitals and other
health care facilities and to plan and assist construction of additional facilities and to
plan and assist construction of additional facilities. The Hill-Burton Act was signed as
Public Law 79-75 in 1946 and became a major influence in the expansion of the hospital
industry (Stevens, 399).

Medicare and Medicaid
In 1966, the hospital industry was the recipient of another major legislative contribution
to its fiscal well-being by the passage of Medicare, Title VIII of the Social Security
Act. The legislation provided the growing population of American over age 65 with
significant hospital and medical benefits. In one decisive legislative action, the large
population of elderly, the age group most likely to need hospitalization, were assured of
hospital care, and the hospitals were assured that they would be reimbursed on the basis
of "reasonable costs." The companion program, Medicaid, Title IX of the Social Security
Act, was established at the same time to support medical and hospital care for persons
classified as medically indigent. Unlike Medicare, Medicaid required states to establish
joint federal-state programs that covered persons receiving public assistance and, if they
wished, others of low income. Because the states had broad discretion over eligibility,
benefits, and reimbursement rates, the programs developed differed widely among the 50

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