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Week 7 Paper

4866 words - 20 pages

HSM 543

Health Services Finance

Spring 2013

Trends Toward the Innovations of Integrated Healthcare Service Systems


The healthcare industry is a large and dynamic sector with many unique characteristics. It includes hospitals, health systems, ambulatory clinics, medical group practices, and other organizations providing health-care services. Business and leaders must be well equipped in traditional management knowledge and practices to manage the unique aspects of the health-services industry. The success of the new Health Care Reform depends on the cost, types of coverage and technological advances. Careful elevation and ...view middle of the document...

In the 1920s, we had great advancements in medical technology. In the 1920s, these advancements spread to civilian hospitals around the country but also led to people struggling to deal with growing medical costs. While the American Medical Association (AMA) opposed any government role in healthcare, physicians started realizing that more and more Americans were unable to meet their medical expenses. “The collapse of the stock market and Great Depression created tremendous new economic challenges and high healthcare costs.” (HNN's History of Healthcare Reform).

Invention of Government Insurance – Blue Cross Blue Shield

The Blue Cross Blue Shield Association is a federation of separate health insurance organizations and companies in the United States. Blue Cross was the name used by an association of health insurance plans throughout the United States. The Blue Shield was used by employers in the Pacific Northwest region to provide medical care by paying monthly fees to medical service bureaus. Slowly, the Blue Cross plans became popular among people and hospitals started offering joint regional plans to reach out to most of people at regional level. It led to the appearance of two distinct models of providing and paying for health care. The first of these were early forms of what we now call a health maintenance organization (HMO). The other was the appearance of the first Blue Cross and Blue Shield (BCBS) plans. “The earliest BC and BS plans thus resembled other early types of prepaid care, except that they relied on providers in independent private practices rather than having dedicated delivery systems. Because they included more than one hospital or one medical group, providers could not each be paid on an equal prepayment basis, so payment was typically based on charged fees.” (Blue Cross and Blue Shield Association, 2011).

Medicare in Healthcare

In 1965, Congress passed both Medicare and Medicaid. Medicare expanded the Social Security mechanism to include health benefits, and Medicaid provided for health assistance to certain categories of low-income Americans. Later, emphasis shifted to reforms involving private enterprise or non-profits. There was also a reform to promote Health Maintenance Organizations (HMOs), which prevented the fee-for-service system by which doctors ordered expensive tests and unnecessary treatments. Health Maintenance Organizations (HMOs) administer the most common types of managed care health insurance plans. Thus, Managed care plans emerged as the main alternative to fee-for-service health insurance arrangement in which employees can go to the hospital or doctor of their choice. Democrats continued to press for expansion of direct government intervention in healthcare. In 1974, Nixon, proposed the Comprehensive Health Insurance Act, a bill that would mandate health insurance by private employers while giving individuals without coverage a federal public option.


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