Financing and Structuring Health Care

Financing and Structuring Health Care

Henry Avery

Professor Wanda Allen

Health Services Organization-HSA500

October 10, 2010

Financing and Structuring Health Care

Identify and describe the three main types of health insurances in the U. S.

The first of the three main types of health insurances in the U. S. as discussed in this assignment is voluntary health insurance. Voluntary or private health insurance in the United States can be divided into three distinct categories namely: (1) Blue Cross and Blue Shield, (2) private or commercial insurance companies, and (3) health maintenance organizations.

In spite of active opposition from the American Medical Association to any type of health insurance from 1920 onward, in 1929, however, a group of Dallas-based teachers formed a partnership with an area hospital to provide a set amount of sickness and hospitalization days in exchange for a fixed, prepaid fee. Prepaid hospital service increased during the Depression, proving mutually beneficial during a difficult economy times. The American Hospital Association (AHA) encouraged hospitals to develop similar plans, which provided a steady source of income, particularly to prevent financial embarrassment in emergencies. Individual hospitals and community care organizations began competing with one another for such plans so, to provide better community coverage, hospitals joined together with the help of the AHA under the name of Blue Cross.

To maintain some autonomy and a closer physician-patient relationship, physicians organized their own prepaid plans. Blue Shield was developed not only to compete with Blue Cross, but to offer another choice. Physicians were concerned that the contemporary social security legislation would lead to compulsory health insurance that would be heavily regulated and devastate patient choice and their relationship with physicians. With voluntary health insurance and the benefits of Blue Shield, doctors...