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Needs
Wants
Deman
ds
as far as possible.
To do so we need to improve the ability of
medical staff to recognize and respond to
actual needs (through training, support,
payment systems etc)
Equally we need to influence wants and
demand so they overlap as much as
possible with needs (by public education
about treatments, like
ensuring that
appropriate treatments are accessible and
affordable.
Healthcare as an Investment
Demand for healthcare is not based solely
Determinants of Demand
Price Factors:
Opportunity Cost
Cash Price
Patient Factors
Health Status
Demographic Characteristics
Economic Standing
Physician Factors
Supplier Induced Demand
Price Factors
Opportunity Cost:
The true cost of good or service is the cost
Cash Price:
In some cultures, healthcare is considered of a low quality if it
Patient Factors
Health status:
An
individuals demand for medical
treatment is usually triggered by the onset
of an illness.
And the desire to remain healthy increases
the demand for preventive care.
Ageing
Chronic Illness
Infectious diseases
Demographic Characteristics:
Growing population
Single parents
Working women
Later marriages
Fewer children per family
Greater mobility
Sex:
In early life cycle, both spend same amount on
medical care.
During child bearing years, women spend 50%
more than men do.
Women get hospitalized more often while if men
get hospitalized, they remain so 50% longer.
Men are able to substitute home healthcare,
having wife at home to take care of them.
Men suffer more frequent health losses due to
lifestyle choices, drinking, smoking and overeating
Economic Standing:
Rise in income is expected to increase the
consumption of healthcare, as the capacity to
purchase increases.
However, income may be spent on unhealthful
consumption
which
tends
to
increase
healthcare needs in longer run.
Also income level are highly correlated with
educational levels, which in turn makes a
person better consumer of medical care.
Education improves a persons ability to
recognize early symptoms, when treatment is
less expensive.
Also
better
education
has
healthier
Physician Factors
Suppose you are a buyer in a market with inadequate
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occurrence.
Way to reduce it is, find somebody who will share your
risk in exchange of some price Genesis of health
insurance.
Its effect on demand for medical care:
o Availability
of insurance increases demand for
healthcare by lowering out-of-pocket payments Moral
Hazard. Hence, health insurers offer Deductibles and
co-insurance to reduce this hazard
o Deductibles: Initial amount the policy holder must pay
before insurance coverage begins paying.
o Co-insurance: Percentage of total spending the policy
holder pays.
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