Demand For Health Care

Index - Major Sections
Home

_______________

Index - Same Level Subject

Index - Child Subjects

Introduction

Healthcare: The easiest Service to Market and the hardest to Manage

Facts

Consumers are better educated about everything, including healthcare
Consumers belief that healthcare is a "right"
Consumers want more and they want to pay less
Consumers have more money to spend

Demand for healthcare services is on an upward track partly because consumers know more about healthcare. Better education systems that includes healthcare as part of their curriculum, increased direct-to-consumer advertising, television, and the Internet have all displayed the "good life."

Many people believe that health care is a right of every human being and that, in order to ensure that this right is exercised by all, health care should be "free." Free health care and government involvement in the financing and delivery of health services thus appear to respond to a fundamental concern for equity. (Bitran and McInnes, 1993)

As nations become wealthier, consumers spend more on healthcare; not only in absolute terms but also as a relative percent of Gross Domestic Product.

Yet, just because it is free, does not guarantee that those people in the target population groups in need of health care will go to government facilities that provide these services. It does not guarantee that the health care provided is of sufficient quality.

As health care costs continue to increase as a percentage of the countries GNP and the populations continue to age, countries are now looking for ways to satisfy this demand while maintaining costs.

Concepts

The basic concepts associated with the general notion of health care demand are

Perception
Need
Demand
Utilization

Perception

Perception is the concept that the individual thinks that there is a health care problem. There are two possible perspectives regarding the individual's health care problem (1) the individual thinks that he has a health care problem, and (2) the health care professional thinks that the individual has a health care problem. The matching of perceptions between the individual and the health care professional since it may lead to

compliance on the part of the individual in the health care treatment
better health for the individual
timely treatment when care is require
more effective use of health care recourses

The concept may be seen when the individual client arrives at the clinic. The client may be asked "how severe do you think is your illness?" A comparison can then be made between what the individual thinks and the health care professional (HCP) thinks. If there is a difference between the two, then the client needs health care education.

In the InHCc System, this information is taken by triage on admission.

If the perception by the client and the perception by the triage personal is not the same, then there needs to be "patient education".

The hypochondriacs and others with minor problems compete for scarce medical resources with other individuals who do have a health problem requiring care.

Cases that are the most serious are those where an individual has a medical problem but dos not perceive it (for example hypertension or diabetics). Thus, the person does not seek care, a decision which may jeopardize his or her health.

Since InHCc management records triage (vital signs) on every client that visits the clinic (and in many cases, the clients of the clinic represents over 90% of the population), it is possible to identify those individuals that needs additional health care and provide education. The InHCc system can be used to "sort out" and target these individuals. This groups can then be educated in peer to peer classes which increases compliance and reduces costs of the education. There is no need for "mass education programs" which are not specific and increases costs.

Examples of factors that may influence the individual's perception of a health care problem are:

Health education
Religious Beliefs
Age
Gender
Their own and their peers previous health experiences
Psychological factors
Their environment
Their cultural factors

Needs

Perceptions translate into need. If the client thinks that he has a health care problem, then he or she will "perceive" that he "needs" health care. Prior to seeing a provider, it is the individual's perception of health care need that drives his or her demand for a visit to the HCP. After the first contact with the HCP, however, it is both the individual's and the professional's notions of need that drive demand for additional care such as exams, pharmaceutical products, return visits, etc...and the education about health that he or she receives from the health care staff. A better informed client, is more likely to make the right chooses in both the perception of their need and the treatment that the professional wants them to undertake.

Here it is important to distinguish between the perception that there is a health care problem and the perception that there is a need for health care services. It has been stated that over 95% of the people that are treated in a health care unit will get better even if they do not go to the health care professional. It was found by InHCc that many of the older patients coming into the client just wanted someone to talk to. Our societies are developing the attitude that if they go to the physician they will receive a "pill" that will make all their problems go away. Studies have shown that clients rate physicians very highly if they are given drugs and very low if the physician does not give drugs in their treatment. It has been made even worst be so call "health care financial experts" advising health care organizations to charge for drugs (other services being free) to pay for the cost of operating the health care unit. There is now a build in incentive to over-prescribe...and we will not even talk about the for profit health care organizations.

Why is this important? Traditionally, planning for the supply of health services has been based on medically defined need. Unfortunately this approach often leads to poor resource allocation, since what health experts believe the population should consume seldom coincides with what it demands. (Bitran and McInnes, 1993)

In many cases, instead of deploying more medical resources, it may be more important to educate the population...and cheaper. And again, it is not "mass education campaigns" that are needed but rather very specific targeted campaigns. We want to education the people that need it the most with the education that they are most likely to understand.

Demand

Demand for a particular type of health care service produced by a given provider is determined by many factors, such as:

Education (what is the problem and what do we do about it)
Severity of illness as perceived by the client
Income/Price
Age (patents tend to over-treat their children)
Location
Facilities
Ease of use of the system
Insurance (who is paying)
Quality

Careful attention must be given to measuring the "demand curve for services." Academic regularly attempt to create demand curves for "a services" without much success. What they attempt to measure (and it is useful if it can be done) is how much the change in demand for services will change if the price for those services change. Rarely is the "service" the same across providers or for that matter within the same provide...and there is always the option of the client to seek alternative services. There are always "similar substitutes" for a particular medical service. It is InHCc experience, that if prices are increased at one clinic...the clients do not forgive the services but rather just substitute that service for some other...or go to another clinic. A true demand curve calculation requires that there be no substitutes.

The InHCc System provides the ability to capture the "previous encounter" information of the client. The HCP records the history of the client's illness if they went to an external health care organization (if the client used the InHCc clinic, the history would already be available), the organization, the external health care professional, and the reason that the client visited.

Recently, a clinic that uses the InHCc System raised their prices substantially...and a substantial drop in the number of clients occurred almost immediately. However, within a month most of these clients started returning. This provided an opportunity to determine why they behave the way they did.

A demand curve (function) also has the additional stipulation that it reflects "rational" individual behavior. While it is true that individuals prefer to pay less rather than more for the same service...when it comes to health care, individuals may act totally irrational. Their baby is sick...they need health care at no matter what the cost or how they get it.

Demand vs. Price also assumes that the client knows what the prices are before they come to the clinic. This is rarely the case. While, indeed, the client may know what the consultant charge may be (they are usually posted), it is impossible for him to know what the total charges for all services may be. Since drugs sales represent greater than 50% of the income of a clinic (most clinics), this may be a very real cost to the client not accounted for in normal demand/price functions. Each organization has a "mix" of charges. Yes, the charges for the consultant may be low...but the organization more than makes up for it by charging higher prices on drugs and tests.

Again education is the best treatment.

Utilization

Utilization is using resources. If there are more health care resources (doctors, equipment, buildings) than the demand for them, then there is excess supply (or maybe we can say under-demand) and if there is more demand for health care resources than there are resources available then there is excess demand (or maybe we can say under-supplied). In either case, it don't mean that what is demanded is the "correct amount demanded" or that it is the "correct supply that is available...it just means that they are not equal. Calculating the excess supply or the excess demand may mean very little in health care. It is first important to know what should be the correct "demand" (medically defined), calculate the resources needed, and then create means to supply just the correct quantity of resources needed.

Determinants of Quality of Services

Definition

Quality of Services has been discussed extensively in another section of this web site, but the statement that needs to be made here is that consumers of health care generally do not know the quality of care that they receive. Consumers generally will rate of high quality those health care professionals that prescribe drugs, take time to talk to them, and the staff is "nice" to them. Even in the US, there is no real quality of care definition that is used to rate the health care organizations. Several procedures have been implemented but they all include "Client Satisfaction Surveys" or have set up a set of "standards" that the health care organization must come up to such as the number of patients tested for diabetics or hypertension...very little that tells about the actual quality of the treatment.

Factors influencing Quality perception

Education (both the client and the Healthcare professional)
Resources used to obtain service (transportation, waiting time, price of service)
Time spend with Healthcare professional
Communication skills of Healthcare professional
Cultural and Ethnicity tolerance
How easy it is (both the system and the treatment)
Equipment and Facilities (clean, modern)
Outcome
Advertisement
Perceived "Disinterest" or Corruption in the system
What others are doing

Price structure

The price structures of health care organizations may be any of the following are a combination of the following:

Free
Minimum admissions fee
Insurance without co-payments
Insurance with co-payments
Private full pay

Discussion

The role of health planners is to build health systems that can meet the medically defined health care needs of the population. For this purpose, knowledge of epidemiological information is critical (Bitran and McInnes, 1993). However, until recently, this data just was not available. There was not enough detail information being collected to determine target populations much less what health care services the population were receiving. Today, it is possible to capture all the data that is required to be able to make objective informed decisions.

Back to Top