How can insurance be used to decrease healthcare costs and increase quality of care - Essay Example

The quality of the treatment is another problem that needs consideration. Most of the uninsured and low-income groups are not in a position to get good quality healthcare. The present essay is intended to study a brief history of healthcare industry and to analyze problems and reasons for the high costs associated. The proposals that are put forward for the reformation of current state of healthcare system also would be analyzed so as to reach a conclusion on the best strategy to be adopted so as to decrease the costs of healthcare and to increase the quality of the healthcare.

The health insurance plans began in United States of America during the civil war that took place during 1861 to 1865 (Murray, 2007). At that time only accidents that was caused during transport and that too through either rail or steamboat had any coverage for insurance. Since then more and more plans, which provided coverage for most of the illness were added and in the year 1847, Massachusetts Health Insurance of Boston offered the first group policy with a lot of benefits. Individual disability and illness policies were issued by 1890.

Arguments or cry for modern group health insurance plan was started in United States only in 1920s and by that time it was far behind many of the European countries. But there was no political pressure for such a law. Reformers started to ask the cost of medical care instead of wages lost due to sickness mainly because the former was much higher than the latter in as early as 1920s. During this period itself the health care available to poor people in the country was quite inadequate. The first company to offer health insurance coverage for all its employees was General Motors (Murray, 2007).

The depression that gulped the country in 1930's resulted in more insurance coverage for unemployed and aged people. There was no priority for healthcare insurance at that time. Blue cross, which is a non-profit organization, began to offer health insurance in a number of states during this period. In Blues every one irrespective of age or sex or their disease conditions were charged the same premium. Since the Blues were created by hospitals, potential patients were encouraged to sign up (Noah, 2007).

It was in 1940's that the present practice of employer-based system of health insurance was first offered (Noah, 2007). This was in an effort to combat the wage and price controls during the Second World War. The labor unions urged for better benefits and tax-free employer sponsored health insurance. The employers had to attract their employees and so they offered whatever that was asked for. Prepaid group healthcare was started at this time. President Truman was a proponent of national health program plan in which the government would be the payer of the whole of the American society.

At that time it was opposed by American Medical Association and the law or bill could