Healthcare system in U.S evolved from simple system to complex system of home remedies and travel doctors with little training to complex, scientific, technological and bureaucratic system. Through this evolution based on complexity, there was acceptance of the germ theory as there was rise with technological advancement in the treatment of diseases, the professionalization of doctors, rise of medical training and healing and advent of medical insurance.
Based on these facts it is clear that the healthcare system has seen the growth of the corporation whose businesses have focused on profit making purposes. (Biddle 1991). This is where earlier efforts of the doctors created a unified professional organization in the mid-1800s and 1846 that lead to an emergence of American Medical Association (AMA) which had great influence in political and medical practice.
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Fee for service (FFS) basically refers to a payment model where services are unbundled and paid for separately that is doctors and hospitals gets paid for each service they perform. While on the other hand, under the managed healthcare (capitation) the health care providers (physicians) are basically paid a set of amount for each enrolled person assigned to that physician or group of physicians whether that person seeks care per period of time. (Unknown, 2017).
It is therefore clear that fee for service and the managed healthcare models have greatly contributed for to the high cost of insurance premiums to employers and individuals in the context that the fee charged by the private insurers and hospitals are too high for the poor through Medicaid thus no treatment was offered at low costs. That’s when managed health care gained its tight grip in 1990s premiums for private health sector crept up. (Frontline,