Health care in the United States has started evolving in the last century and till now it’s growing every day. Now Americans have been enjoying the best and largest health care system in the world and it is supported by the fact that this country spent 17.9% of its GDP on health care in 2011. It not only comprises of medical care facilities but pharmacies, medical suppliers, pharmaceutical companies, medical equipment manufacturers are also involved in healthcare system. Fortunately, qualified professionals in every section who ensure well-being of their countrymen are always active for smooth functioning of this system.
Do you want to understand how the American healthcare system works today? You should look far back at the beginning of the twentieth century when the system was born. It was simple but unique at that time since it was something in relation with the job of the inhabitants. The industry started its journey as a technique for companies to catch the attention of employees. Healthcare system in the United States was not tied to the Government to resolve their health issues but to the employers. Let us have a closer look at the history of the United States healthcare to find out why most of the people in United States get health benefits from their employers.
The Original American Healthcare System
In the beginning of the twentieth century, US medical care was medieval. The average cost of healthcare at that time was about $5 a year. There was no health insurance at that time since such a trivial cost did not need any insurance. With the advent of modern medicine, healthcare became more effective and expensive. Slowly, the hospitals were able to give happy outcomes. People were willing to pay for healthcare but it wasn’t quite common for people to go to hospitals for minor illnesses. At this time, the Baylor hospital devised a way in which people could pay for their health care as they paid for the cosmetics – a tiny bit at a time. Eventually, this method got a name – The Blue Cross.
The Modern American Healthcare System
After World War I, the economic condition of Germany was ruined due to post war inflation. Seeing this, government leaders and economists were worried about post war inflation during World War II. To avoid this, US Congress and President Roosevelt established wage and price controls and intended to maintain it after the war as well. In 1943, the Internal Revenue Service stated that employer based healthcare should be tax free. In 1945, to give labor a concession without violating wage and price controls, the government exempted employer paid health benefits from wage controls. This compensation resulted in huge tax benefit for employer sponsored group health benefits.
Thus, employer based health insurance which started with Blue cross and spread due to government price controls, became the system. Today, the employers provide their employees with group health benefits wherein employers pay 60% – 100% of the total cost for the participating employees.