Healthcare in United States

Healthcare in United States

Introduction

Many health services researchers study the function and nature of insurance, the various types of insurance plans, and the impact of insurance on healthcare. They also study the use of health services and the outcomes of care of the insured compared with the uninsured. Researchers use this knowledge to develop more effective, efficient, and equitable health polices.

Health insurance plays a vital role in the U.S. healthcare system. Health insurance protects individuals and their families from the high and unexpected costs of injury and illness. It provides the insured with a measure of financial security. Health insurance may cover physician fees, hospital bills, prescription drugs, medical equipment, and long-term care expenses, as well as lost wages. Without health insurance, the costs of a serious injury or major illness could easily cause financial ruin for most individuals and families. In fact, medical debt is one of the leading causes of bankruptcy in the United States.

Health insurance is an important determinant of access to care. It enables the insured to have access to preventive healthcare services and to the early treatment of injury and illness. An overwhelming body of evidence shows that the uninsured get less medical care, get it later when it is of less value and usually more urgent, incur greater morbidity, and die younger than those with health insurance.

Health insurance is the largest source of revenue for nearly all healthcare providers in the nation. It enables healthcare providers to maintain high-quality care. Revenue from health insurance allows the providers to maintain their practices and organizations, and it enables them to purchase new advanced medical technology.

Function and Nature of Insurance

There are many definitions of insurance. Most of the definitions include such terms as risk, pooling of risk, potential losses, and protection against losses. For this entry, insurance is broadly defined as a form of risk management that transfers or shifts financial risk from an individual to a group such as a private insurance organization or a government agency, where losses are pooled and spread across the group. Not all risks are insurable. A number of prerequisites are necessary for insurance to successfully work.

First, there must be a sufficiently large number of similar exposure units to make the losses reasonably predictable. Insurance is based on the law of large numbers. For example, it may be  impossible to predict with any certainty whether a specific individual will develop a rare disease or not, but by looking at a large population of individuals it may be possible to statistically predict the total number of individuals who will develop the rare disease.

The losses produced by the risk must be measurable in terms of its cause, time and place of occurrence, and its monetary value. The monetary value for most material things can be relatively easily determined. However, the monetary value of the loss of human life is much more difficult to estimate.

The losses must be fortuitous or accidental, and not intentional.

The losses must not be ...