Demand in Health Care Services

Demand in Health Care Services

• Population Demographics:
  • Ageing populations require more healthcare services due to age-related illnesses and chronic conditions
  • Changes in population size, growth rates, and urbanization impact demand
• Socioeconomic Factors:
  • Income levels, employment status, education, and access to health insurance influence demand
  • Higher income and better insurance coverage often correlate with increased demand
• Disease Prevalence:
  • The prevalence of diseases and health conditions in a population directly affects demand for related healthcare services.
  • An increase in chronic diseases like diabetes, heart disease, and cancer leads to higher demand for specialized care and treatments.
• Technological Advancements:
  • Advancements in medical technology lead to new treatments, procedures, and medical devices, increasing demand for specialized services
  • However, these advancements can also increase costs, affecting accessibility and affordability for certain populations
• Government Policies and Regulations:
  • Healthcare policies, like universal health coverage, Medicaid expansion, or changes in reimbursement rates, significantly impact demand for healthcare services
• Cultural and Social Factors:
  • Cultural beliefs, attitudes toward health and wellness, and social norms influence individuals' health-seeking behaviors and preferences for specific healthcare services.
• Healthcare Infrastructure:
  • The availability and accessibility of healthcare facilities, providers, and services within a community or region affect demand.
  • Areas with limited access to healthcare may experience higher demand compared to areas with well-developed healthcare infrastructure.
• Public Health Emergencies and Pandemics:
  • Outbreaks of infectious diseases or public health emergencies can lead to sudden spikes in demand for healthcare services, overwhelming healthcare systems and resources.

Supply of Health Care Services

• Supply: Refers to the quantity of a commodity available to consumers at a particular price and time.
• Quantity Offered for Sale: Higher price, larger supply; lower price, smaller supply - a positive relationship exists between price and the quantity of a commodity supplied.
• Supply in Health Care Services: Refers to the availability of healthcare resources, including facilities, healthcare professionals, medical equipment, pharmaceuticals, and other necessary resources to meet the demands for healthcare services.
• Market Power of Health Care Suppliers: Some suppliers have significant market power; this complicates the use of supply and demand reasoning when comparing healthcare prices across countries.
• Government-Controlled or Not-For-Profit Hospitals: These institutions may not have profit maximization as their primary goal, making standard economic approaches more difficult to apply.
• Production Function in Health Care: Output is produced using a production function with labor, capital, and intermediate inputs (Q = f (X, Y), Where Q = Output, X = Labour, Y = Capital).
• Production Function of a Hospital: Includes labor (doctors, surgeons, orderlies, technicians, nurses, administrative staff) and capital (hospital buildings).
• Health Care Capital: Includes pharmaceutical production facilities and companies that produce medical equipment like MRIs.
• Technological Progress in Health Care: Comprises product and process innovations.
  • Product Innovations: Include the vast array of drugs available due to research and development at pharmaceutical companies and publically funded research, and advanced machinery used in modern healthcare facilities.
  • Process Innovations: Refer to how techniques are implemented, like advancements in surgical procedures
• Government Influence on Supply: Governments may set rates for certain procedures or negotiate with pharmaceutical companies.
• Insurance Companies: Provide additional revenue sources to hospitals and doctors through reimbursement for patient care, which is determined by the patient's insurance policy.

Factors Influencing Supply in Health Care Services

• Healthcare Workforce: The availability of healthcare professionals (doctors, nurses, pharmacists, technicians, support staff) is crucial for delivering healthcare services. Factors influencing workforce supply include healthcare graduates, immigration policies, professional licensing requirements, and working conditions.
• Healthcare Facilities: The number and distribution of hospitals, clinics, primary care centers, and specialized healthcare facilities determine the supply of healthcare services. Factors influencing facility supply include construction and infrastructure development.

Models of Service Utilization

• PRECEDE-PROCEED Model: A comprehensive structure for assessing health needs, designing, implementing, and evaluating health promotion and public health programs.
  • PRECEDE: Focuses on planning and includes the following steps:
    • Social Assessment: Determines social problems and needs of a population and identifies desired results.
    • Epidemiological Assessment: Identifies health determinants of the problems, sets priorities, and establishes goals.
    • Ecological Assessment: Analyzes behavioral and environmental determinants that influence behaviors and lifestyles.
    • Administrative and Policy Assessment: Identifies factors that influence implementation and matches appropriate interventions to encourage changes.
  • PROCEED: Focuses on implementation and evaluation, encompassing the following steps:
    • Implementation: Designs interventions, assesses resource availability, and implements the program.
    • Process Evaluation: Determines if the program reaches the targeted population and achieves its goals.
    • Impact Evaluation: Evaluates the change in behavior.
    • Outcome Evaluation: Identifies a decrease in the incidence or prevalence of negative behavior or an increase in positive behavior.
• Knippenberg and Andersen Models: Other models used for service utilization assessment.