Question:
Write an essay on Analyzing demand in healthcare.
Analyzing demand in healthcare from the economist perspective starts with the different primary key terms in health economics these are ordered which refers to the services in healthcare that amounts to consumer desires at given price and income. Health care need relates to the measure and type of duty that efficiently and effectively improves health. Utilization is the number of different services that are consumed.
I agree with the statement that doctors have generated demand in healthcare, essentially termed as a doctor’s driven demand. The reason for this is if the physician creates the demand for his services at his own will, he could face a drop in the market of the consumer-physician ratio simply due to the increase of utilization of his services without lowering the cost. Increasing the number of the doctors density could result in the growth of the healthcare expenditure with no benefit to the patient. The governments have put in place measure in the supply of medical manpower or control on utilization as a counting strategy.
If the price-output decisions of the doctor were affected by other external factors to determine demand, then increase in usage could be achieved by lowering the costs. In that way, the idea would be value by the patient but this cannot be economically viable it would also result in high health care expenditure.
Physicians manipulate the patient’s demand for services. Doctors always deny the existent that kind of power in exploiting for all personal gain.
The doctors can actually manage the demand for their services. It has been observed that when the fee charges in hospitals are reduced and depressed, the per capital service utilization of the physicians tends to rise in partial or whole compensation of the lowered price. The per capita usage also tends to grow more with the increase in the physician-population ratio.
Determinants of the demand and supply of healthcare
Ill-health
Ill- health is the primary determinant as the request for healthcare comes as a result of the need for health services. The medical care is irregular and cannot be predicted, and that makes medical claim different from all other commodities. The supply for the healthcare demand is met when there is the availability of the medical personnel or physicians; these situations make the health care application dependent on the doctors. The demand for the particular type of service produced by a given supplier affects the quantity of that service will to people for treatment purposes.
Economic determinants
These are the variables either direct or indirect cost that is incurred in the process of therapy. The total cost includes the pricing of the service to the consumer, the travel expenses, all the income lost during the period receiving the service, and the non-money cost which is the time required for the services.
The price of treatment is an important determinant of the demand for healthcare services. This includes the direct cost of therapy such as the consultancy services given by the physicians, services delivered all which are aimed at utilization of health services. The price of health services can have resulted either in reducing at least on the goods which are the consumption of healthcare or choose to the other commodities or both the products. The change in the price of healthcare or medical services does not affect the demand. However in the shift to high price elasticity of demand for the medical services, there is a drop in the request of the medical service.
The physical availability of the healthcare providers has an effect on the utilization of the medical services. The implication is that the consumer of the health services gives value to the time spent on the event of visiting the health facilities. The waiting time for the customer to get the medical services. It is viewed as the availability of the physicians and the efficiency of the health practitioner in this case. It is referred to as the opportunity cost of waiting time of the consumer to the supplier in the medical intensive care.
The perception of need determinants
This is concerned about the attitude of the individual consumer, the values and the taste of the services. The usefulness of the modern health treatment is one of the areas where the patient would focus on, the perceived severity of the illness, and the quality of health caregivers. At the physician provision of services, quality is taken as a key determinant as to the choice of the health care provider. The individual consumer perceives the quality, and the health professional has a different view on the same, which is essentially defined by the number of the medical staff, the presence of adequate drugs, a functional unit laboratory, the availability of power or electricity. These factors have a substantial positive impact on the demand for the medical services and all influences the choice of the medical health service provider. Regarding how useful medical treatment are efficient, all these depend on on with the individual cultural and psychological information towards a physician. Also, the level of education plays a part in the decision making of a patient on how the services in healthcare are to be delivered. This is evident in the practice of the patient-centered treatment in major hospital, this mode of treatment is only useful when the health professionals are offering their best quality services.
The quality of health services can vary from an individual to another; this is because it has numerous views, including the direct effectiveness of the treatment to the patient, the cost imposed on the patient in the occasional visits. The side effects of the services given, the politeness of the healthcare provider that significantly affects the customer satisfaction, also the opening hours of the healthcare facilities and the time one waits to be served in the customers turn over. So going to the doctor demand must be driven by the kind of services enjoyed by the consumer which to them take as a medical necessity.
The physicians make some quality improvements which reduces the demand for health care. For example in the high-quality care reduces the occasional visit hence the request for care reduces as that of quality increases.
Individual income
The preference and choice of the healthcare services is a major factor, in the microeconomic theory of consumer behavior. The health seeking behavior of a person is dependent on the income state of the individual. All consumers of health require some income to be able to pay the cost of the healthcare service. The access to the better facility come with extra charges, the increase in income leads to higher demand for health care services. For individuals with particular health status or conditions, the changes in the prices of medical affect the needs of the services.
Health insurance and the demand for healthcare
The insurance aims to reduce the variability in a person’s income and pools risk with a large number of individuals. With this, the population can cater for the cost of healthcare. The doctors induced demand will be high as the people can access the healthcare utilization, and this tends to rise the demand for healthcare. All the money paid to the health insurance can get interested and indeed is paid out to the health services when the consumer gets sick. The health insurance would not be of importance if every person had average needs. The insurance makes it possible to obtain health services without going bankrupt. Due to the results of the uncertainty all health illness and medical expenditures are not predictable, the policies cover for hospitalizations, serious injuries, and other modern treatments that can be very expensive to pay as an individual patient. On the physicians end the demand for healthcare with being in his favor as the gains and benefits will be paid by the insurance companies that covers the patients. The market for health insurance will be affected by various factors which include the probability of occurrence of the illness. Also the intensity of loss about income which is the cost of the disease, and lastly the price or premiums paid to the insurance companies increase in the prices results to fewer individual insure against a given event.
Conclusions
The demand for healthcare can vary considerably and has many dimensions. The major one has to do with the quality of services offered by the healthcare providers. The relate to the productivity of the healthcare service determined by the training of the doctor, the technology in place. So it’s right to suggest that the earlier assumption that the physician the demand for healthcare is doctor driven because if the physicians sufficiently have the adequate requirements, then demand is motivated by the fulfillment of the activities as by medical necessity.
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