ABSTRACT
Unlike other sectors of the United States (US) economy, healthcare has a “third party” structure in which most consumers are, in part, sheltered from the cost of the healthcare services they receive and purchase. In the US, healthcare financing is provided primarily by two types of payers or insurers: public payers and private payers. This chapter details the cost of healthcare in the US and the major payers who have the third-party role in covering that cost. Over the years since the inception of Medicare, a number of major initiatives have been taken to reduce the rate of increase in Medicare costs. In an early major initiative, the Health Resources and Development Act of 1974 was enacted establishing State-wide hospital planning and Certificate of Need programs in an attempt to control capital expenditures. Medicaid provides healthcare coverage to persons who are indigent and who are eligible for coverage based on specific criteria related to their income level.
