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American Economics and Healthcare


This document intends to discuss how America has gone an extra mile in using or controlling its economic resources to give its citizens good health care. America has one of the largest national economies in the world. This is because it respects private investors. It has done this by allowing the Private investors to make most of the economic decisions. The American economy is also characterized by low levels of unemployment. This means that most of the citizens are either employed by public or private investors. It has an estimated GDP of about 15 trillion dollars (Kongstvedt, 2001). This is almost a quarter of the whole global GDP, which is the global domestic product. According to an economist by the name of Joseph Stiglitz, he defines economics is the study of how individuals, government, firms, and other organizations within the society make choices and how these choices determine how the resources of the society are used. It is therefore important for the government to come up with the plans or strategies of how these economic resources are going to be used in a way that will reduce the cost of providing health care services and at the same time improve the quality of such services. This ensures that every citizen gets access to these services which are very crucial for any state. In a nutshell, the programs that have seen the success of providing these services will be discussed in this document so that it can be understood how America carries out such activities.

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To ensure that every citizen gets access to good healthy care.The following programs or strategies have been put in to place as there are going to be discussed here. The main focus is to ensure cost sharing of the health benefits. They also ensure that those who can afford private insurance and also those who cannot afford can equally have access to these crucial services. For instance, public health care coverage in United States includes Medicare insurance which is a program meant for all those who depend on elderly workers, elderly workers themselves, citizens who are permanently and totally disabled are included in this type of public insurance. It is a good option since it provides beneficially with more choices. State Children Health Insurance Program is also under public coverage. This type of insurance is provided for those children in families who don’t have the capability to afford private insurance though they earn a lot of money and they qualify for Medicaid (It is more of a social protection program for those whore are extremely poor). They are separate from health programs for children; hence they are independent. Other public insurance are Military Health Benefits which are meant for service members and their dependents, Small employer group coverage and Federal employees’ health benefits plan.

On the other hand private insurance plans or programs are acquired through groups such as firms. Most people acquire them through employer sponsored based insurance which is the most popular among the private benefits programs. In this type of insurance the government plans the content of this kind of insurance and it requires definite kinds of health services. It is paid by the firms or organization to their employees. What happens here is that most of the premiums are paid for by the employer which about 85% while the rest is paid by the beneficially. The fraction that is paid by the employee is very small compared to that which is paid by the employer. Small employer group coverage is another type of insurance under private insurance.This is mainly offered by small firms employers to their employees. The numbers of those small organizations offering this type of insurance is reducing day by day due to the cost.

Managed care means the plans put in place for financing health services. The aim is to provide high quality health services while at the same time ensuring that the cost of the services are significantly reduced. Health Maintenance Organization (MHO) stimulated the endorsement of managed care in the United States (Gina, 2009). This organization has a contract with the parties that fulfill its mandate and they include doctors, hospitals and other providers. In terms of cost savings, MHO programs do not realize any savings like non-HMO programs. It is beneficial in the fact that the consumer’s costs are significantly reduced. These programs hardly affect insurer’s payment and the total expenditure. There is also another program in American insurance which is called Preferred Provider Organization. The concept is that there are organizations of doctors and health care professions who have entered into a contract to provide health care services at reduced rates to its clients. It allows members subscribed to this arrangement to receive a discount below what is paid by non members.


America has gone an extra mile to ensure that all its citizen receive health services of the highest quality while at the same time reducing the cost of acquiring the services. Strategies have been put which have proofed to be effective in providing managed care. It is through such programs that makes citizens of United States feel appreciated and also ensure that the tax paid by the common people are being put in to proper use.


Gina, K. York (2009) Survey Finds High Fees Common in Medical Care, The New York Times.

Kongstvedt, P. (2001). The Managed Health Care Handbook; 4th edition, Aspen Publishers.

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