Business Proposal Economic Analysis

The United States health care system relies heavily on private health insurance, which is the main source of coverage for most Americans. According to the Center of Disease Control, approximately 58% of Americans have private health insurance. The primary public programs are Medicare, a federal social insurance program for seniors and certain disabled individuals and Medicaid, also referred to as Medical. These two are funded jointly by the federal government and states but managed at the state level, which covers certain very low income children and their families. Health advocacy companies initiated to become visible to assist patients muddle through the complexities of the healthcare system (Wikipedia, 2014). In 2010 President Obama signed into law the Patient Protection and Affordable Care Act. This Act includes individual mandate that every American must have medical insurance or pay a fine at tax time (Obama Care Facts, 2014). Before the enhancement of medical expense insurance, patients were presumed to pay health care costs out of their own pockets, which is known as the fee-for-service professional standard. Hospital and medical expense policies were introduced during the first half of the 20th century. During the 1920s, individual hospitals began offering services to individuals on a pre-paid base, eventually leading to the development of Blue Cross organizations. The predecessors of today's Health Maintenance Organizations (HMOs) originated beginning in 1929, through the 1930s and on during World War II and beyond (Thinking Healthy History, 2014).

Market Structure

An oligopoly is a market structure in which a few firms overshadow. When a market is communally jointed between a few firms, it is said to be highly competitive. Although only a few firms dominate, it is possible that many small firms may also exist in the market. For example, major health care insurances like Etna and Blue Cross operate their plans with only a few close competitors, but

References: Dunn, Abe (2010). The Value of Coverage in the Medicare Advantage Insurance Market. Retrieved from https://www.bea.gov/papers/pdf/medicarepaperWorkingPaper9_2_10.pdf Economics Online. (2010 - 2014). Oligopoly, Defining and measuring oligopoly. Retrieved from http://www.economicsonline.co.uk/Business_economics/Oligopoly.html Enthoven, A.C. (1993). Why Managed Care Has Failed To Contain Health Costs. Health Affairs, 12, no.3 (1993):27-43 doi: 10.1377/hlthaff.12.3.27. Retrieved from http://content.healthaffairs.org/content/12/3/27.full.pdf Investopedia (2014). Marginal Revenue. Retrieved from http://www.investopedia.com/terms/m/marginal-revenue-mr.asp Obama Care Facts. (2014). Dispelling the myths. Retrieved from http://obamacarefacts.com/obamacare-facts.php Thinking Healthy History. (2014). Our History. Retrieved from http://share.kaiserpermanente.org/article/history-of-kaiser-permanente/#sthash.GFGsSwtk.dpuf Wikopedia (2014). Health Insurance. Retrieved from http://en.wikipedia.org/wiki/Health_insurance