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health law: an overview

Improvements in technology and medical care have increased life expectancy by a considerable amount.  Alongside these improvements, health care costs have risen dramatically.  Because the health of the people in a nation reflects the health of the nation itself, health care law is vital for the stability of the Unites States.

Preserving public health is a primary duty of the state. Health regulations and laws are therefore almost all state based. Many states delegate authority tosubordinate govermental agencies such as boards of health. These boards are created by legislative acts.

Federal health law focuses on the activity of the Department of Health and Human Services (HHS). It administers a wide variety of agencies and programs, like providing financial assistance to needy individuals; conducting medical and scientific research; providing health care and advocacy services; and enforcing laws and regulations related to human services.   An important branch of the HHS is the Health Care Financing Administration (HCFA), which oversees the Medicare and Medicaid Programs.  Their goal is to ensure that elderly and needy individuals receive proper medical care.

Private health insurance originated with the Blue Cross system in 1929.  The underlying principle was to spread the risk of high hospitalization bills between all individuals.  Whether sick or healthy, all schoolteachers and hospital employees in the Dallas area had to join, ensuring that the risk was spread through a large number of individuals.  Blue Shield was later developed under the same principle. 

Today, many people receive health care through health maintenance organizations (HMO's).  Managed care essentially creates a triangle relationship between physician, patient, and payer.  Physicians are paid a flat per-member per-month fee for basic health care services, regardless of whether the patient seeks those services.  The risk that a patient is going to require significant treatment shifts from the insurance company to the physicians under this model.  Because of the importance of the industry, HMO's are heavily regulated.  On the federal level the Health Maintenance Organization Act of 1973 governs.


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