Health System Factors May Affect The Supply And Quality Of Health Services?

Open up access peer-reviewed chapter

Demand for Health and Healthcare

Submitted: June 3rd, 2021 Reviewed: June 15th, 2021 Published: July 20th, 2021

DOI: 10.5772/intechopen.98915

Abstruse

Healthy human beings are the center of sustainable development, and human beings have long sought to maintain and ameliorate their wellness past increasing their health reserves. In full general, the use of services or the demand for medical services has a vital role in improving the level of health of each person. The demand for healthcare is a demand derived from the demand for wellness and is influenced by several factors, including price, income, population, etc.

Keywords

Healthcare Services
Demand
Demand Curve
Toll
Health Economics

Alireza Ghorbani*
- Wellness Economics, Sabzevar University of Medical Sciences, Sabzevar, Islamic republic of iran

*Accost all correspondence to: ghorbania1474@yahoo.com

1. Introduction

When people are asked why health is important, many are unable to answer information technology. The reason for this may exist due to their lack of sensation of the importance of health and the consequent lack of proper self-intendance. Health can generally be considered an essential ground of life, merely many people still practise things that show that health is not a priority in their lives. They spend a lot of time on the opportunities they find but do not spend time learning what is proficient for them to practice or stay healthy; they spend their upkeep on Nonsignificant things. Only for a more nutritious diet, they pay less.

According to the Globe Health Organization'southward definition, wellness is a state of complete physical, mental and social well-beingness and not simply the absence of disease or infirmity. This definition of health has been given more attention since 1978 at the UN Summit in Almaty. Due to the considerable differences in the level of wellness in different countries of the globe, the members of this arrangement were required to provide Primary Health Care past providing an essential package aimed at reducing the health gap between dissimilar countries and with the goal of Health for All past the yr 2000. Undoubtedly, one of the nigh critical concerns and challenges that different countries have faced in providing primary health care to their population has been the lack of resources in the face of the growing need to receive this care during all these years.

So from the perspective of wellness economists, health is a durable good, or type of capital, that provides services. The menses of services produced from the stock of health capital is consumed continuously over an individual's lifetime. Each person is assumed to exist endowed with a given stock of wellness at the birth time, such as a year. Over the period, the stock of health depreciates with historic period and perchance promoted by investments in Wellness services. Expiry occurs when an private'south stock of health falls below a critical minimum level.

2. Demand

To request a product or service, you must ask for it, afford it, and accept a specific plan for purchasing it. Desires are, in fact, the unlimited desires and inclinations that people have for goods and services. Imagine beingness able to afford something if you could afford it or it was not so expensive. When we make choices, scarcity guarantees that many of our desires will never be met. Need reflects our plan and vision for the demands that will exist met. The amount of goods and services that the consumer plans to buy depends on many factors: commodity prices, related commodity prices, personal income, expected time to come prices, population, advert, and preferences.

We must first discuss the relationship between the need for a good or service and the price. All other factors influencing demand must be kept abiding to study this human relationship chosen the Citrus Paribus principle. The need for a good or service is inversely related to its price; as the price increases, the need for it decreases, and vice versa. Of form, the rate of demand response to price changes is not the same for all goods, which will be discussed in the topic of elasticity [1].

2.one Demand curve

The need curve is a geometric location of points where the dependent variable is the charge per unit of apply of a good, and the independent variable is the cost of that expert; in general, the demand curve shows the maximum demand for a good at dissimilar prices and as well stand for the ultimate cost for a certain amount of a good. Usually, the price variable is shown on the y axis and the amount of appurtenances or services on the x-axis (Effigy ane).

This shows the maximum corporeality someone is willing to pay for a modest increment in consumption rate. Care should exist taken in using the "demand" to mean the corporeality of consumption of a detail good or service at a specific price and to use information technology to mean a range of corresponding values in the toll range (for example, i signal on the demand bend versus the whole Points on the curve). The demand for a proficient or service is a office of its relative cost and buyers' income. The demand curve is a two-dimensional representation of this process. Responding to price changes is moving along the need curve and responding to changes in acquirement every bit the entire demand curve changes and shifts (Figure 2). Some of the characteristics of the demand side that should always be kept in mind when using the need curve in healthcare, especially when making normative statements nigh well-being, are: Uncertainty on the function of the consumer about the likelihood of futurity illness; Side effects, the effectiveness of treatment methods and their possible cost. When sick, people feel anxiety, disability, suffering, and hurting that may not be considered in the theory of desirability; It is also important to notation that there may exist an external demand for care and treatment of a person in improver to their need; And the fact that the price at which the applicant responds to the service or goods may in no way be an accurate reflection of the final cost of providing that product or service to the service provider.

We can also consider the demand curve every bit a payment power curve that measures the ultimate do good. This bend shows the highest price a person is willing and able to pay for the final unit purchased. If there are fewer appurtenances available, the highest price that a person is willing and able to pay for a larger unit will be loftier. But as the quantity of available goods increases, the ultimate do good of each additional unit of measurement decreases, and the highest price offered on the demand curve decreases.

In addition to the toll of the production in question, which is inversely related to the demand for that product, nosotros can examine the human relationship betwixt the need for a product and other factors in the space of the demand curve.

Prices of other goods: The amount of appurtenances or services that consumers plan to buy depends in part on the prices of other goods and services. In this case, there are two types of appurtenances: substitute goods and complementary goods. Two substitute goods can exist used instead of each other, and if the price of one of them increases, the demand for that production will decrease, and people volition be more likely to demand a substitute product. For example, if beef and craven are ii substitutes, as the price of beef increases, so makes the need for chicken.

A complementary good is a skilful that is used with another commodity, and if the price of one of these commodities increases, in addition to the demand for that commodity, the demand for the other commodity also decreases.

Income : Assuming other factors are constant when people's incomes increase, they purchase more than appurtenances and services, and vice versa. Demand increases every bit income increases are normal goods, and goods for which demand decreases as income increases are called inferior goods. But in general, it tin can be said that the demand for health goods and services has little to practice with income. Because medical goods and services provide their health reserves, and as a result, people'due south income cannot have a meaning touch on demand for these goods. However, rising incomes will increase the need for luxury medical services.

Population : Demand also depends on the size and historic period structure of the population. If the population increases, the demand for all goods and services increases, and the population subtract. The need for goods and services decreases. At the same time, as other factors remain constant, equally the population in a particular age group increases, and then makes the demand for appurtenances and services used by that age group.

Consumer's Preferences : Need also depends on consumer preferences. Preferences are people'due south tastes and attitudes towards different goods and services. Preferences are formed based on previous experiences, genetic factors, propaganda, religious beliefs, and other cultural and social factors [2, 3].

2.2 Medical appurtenances

Medical intendance consists of countless appurtenances and services that maintain, improve, or restore a person'southward health. For case, a young man may have wrist surgery to repair a torn tendon and then he can return to work, an older adult female may have cataract surgery to improve her vision, or a parent may have to Bring their child to a healthcare heart for an almanac dental checkup to prevent futurity problems. Prescription drugs, prescription glasses, and dentures are examples of medical supplies, while surgeries, periodic concrete examinations, and visits to medical professionals are examples of medical services. Preventive and medical intendance are heterogeneous, making it hard to mensurate and quantify medical care units accurately. Medical intendance services have iv characteristics that distinguish these from other goods and services: intangibility, inseparability, inventory, and inconsistency.

Intangibility means that the five senses are incapable of evaluating medical services. Different new shoes, a vegetable salad dinner, or a new cell phone, the consumer cannot see, taste, or bear upon medical services. Indivisibility also means that the production and consumption of a medical service accept place simultaneously. For example, when you see an ophthalmologist for an examination, you lot use ophthalmic services correct at the time of production. In addition, a patient is oftentimes seen equally both a producer and a consumer. Inventory is straight related to inseparability. Considering the product and consumption of a medical service occur simultaneously, healthcare providers cannot store or maintain medical services. For instance, a physiotherapist cannot provide a list of different physiotherapy services to see need during busy times. Finally, inconsistency ways that the diverseness, composition, and quality of medical services are very different. Although dissimilar people may run into a dr. simultaneously, there are various reasons for visiting a medico. One person may meet a doctor because of a typical physical problem, while another may see a doctor considering of a heart assault. The combination of prescribed medical care or the frequency of its apply can vary significantly from person to person and at different times [iv, v].

Need for healthcare: Demand requires people to seek a service they can afford and are willing to pay for it. The need for healthcare is the care that doctors believe is essential for a person to stay healthy or healthy. Sometimes, patients retrieve they need healthcare, just doctors believe they cannot benefit from such care. Sometimes the doctor believes that there is a medical need, but the patient does not consult his doctor because he prefers not to receive treatment or that he has not recognized the need. Even if patients have equally much knowledge as doctors, their demands may be different from their needs.

The following factors touch the demand for healthcare:

Needs (based on patient perception)
Patient preferences
Price or cost of use
Income
transportation cost
waiting fourth dimension
Quality of care (based on patient perception)

The employ of healthcare depends on demand and availability. If planners allocate resources based on demand rather than need, they may notice themselves in a situation where some services are underused, and some services are overused.

Just equally the healthcare market is different from other commodities, and then is the demand for healthcare different from the elementary need model. 1 of the differences is that healthcare is not demanded considering it is cocky-satisfying. After all, healthcare itself does non pb to satisfaction. Instead, healthcare is in need because people are satisfied with their activities when they are healthy. And then the need for healthcare is a derived demand.

Patients' perceptions of their need and capacity to do good from healthcare are strongly influenced by physicians and healthcare providers. Although in economics, it is assumed that consumers can make informed decisions about their consumption patterns, healthcare consumers delegate this controlling power to healthcare workers who are more aware of them. This phenomenon is due to information asymmetry between healthcare providers and patients, which carries the risk of induced demand by providers to increment revenue. Another complication stems from the fact that healthcare is highly heterogeneous. Each patient has a relatively different combination of hurting and symptoms. Therefore each patient needs to purchase a fairly different bundle of care that both the patient and the physician have dubiousness virtually its effectiveness in meeting the need.

Some other critical difference is that many health services are paid for by 3rd parties. Payments past 3rd parties or insurance companies Although they significantly increase people's purchasing power for healthcare, information technology is also important to note that they can lead to ethical risks and increase demand for services that patients may not demand.

Demand for healthcare depends on the level of consumption of an individual in case of disease; the amount of consumption can differ co-ordinate to the factors affecting the demand, such as income, service price, education, norms, social traditions, and quality. A person's decision to apply or apply services is related to his or her illness/injury condition rather than healthcare. Developing countries are focused on promoting healthcare as an essential policy to ameliorate health outcomes and fulfill international obligations and universal coverage of health services. Notwithstanding, many policies have focused more on improving physical access than on the demand-side healthcare needs pattern. In low-income countries, allocating scarce fiscal resources is based on articulate criteria for the touch of investment in the wellness sector on service demand.

In these countries, due to the lack or weakness of social security systems, the occurrence of the disease leads to increased health costs and reduced labor productivity and leads to a loss of household welfare. In developed countries, due to insurance, many wellness services are used with minimal consumer participation in the payment; however, in developing countries, concerns about less use of wellness services, to the extent of supply. Or poor access is associated. However, even in health services, due to various barriers on the demand side, related to the cost of treatment, travel costs, and quality of services, the rate of exploitation is depression. Also, the importance of a person'south health condition in a clinical context is related to the assay and social evaluation of a person's health and social environment. Studies have shown that the risk of death is related to people'southward perception of the wellness importance of maintaining information technology. Since ane of the priorities of health policymakers is to better people's health, various factors that directly and indirectly affect the demand for health services should be examined more advisedly. Identifying the factors influencing individuals' decision to asking healthcare services and choosing from dissimilar providers. Therefore, evaluating the determinants of demand for health services will introduce and implement appropriate incentive schemes to encourage better health services. Because wellness is one of the essential components of homo capital letter and healthy man beings are the center of sustainable development, health can significantly increment the ability of individuals to perform various activities, including productive activities. As a issue, people are looking for health. At the individual level, health is mainly influenced by multiple factors such as biological factors, lifestyle, purchased non-medical services, purchased medical services and goods, and different socio-economic characteristics. People's understanding and expectation of healthcare quality are essential because the perceived quality of health services often affects health services' beliefs and consumption patterns [half-dozen].

2.3 Derived need for healthcare

Grossman used homo majuscule theory to explicate the need for healthcare. According to human upper-case letter theory, people invest in themselves through educational activity and health to increase their income. Grossman proposed an approach in which many important aspects of the demand for health services differ from the traditional demand approach:

That consumers are looking for health and need health services to accomplish it.
To attain health, consumers buy wellness services from the market and combine them with their efforts to meliorate health, such equally diet and exercise.
The wellness gained lasts more than a period and is non immediately depreciated to be analyzed as a capital good.
Near notably, wellness tin can be considered as both a consumer good and a capital skillful. From the people's point of view, health is a consumer product considering information technology makes them feel better. Every bit a capital practiced, information technology is too suitable for people'southward health because it increases the number of healthy days of life to work and earn money. Figure 3 provides a simple diagram that explains the concept of health capital. Just every bit one thinks that cars or laptops are majuscule appurtenances that use the flow of their services over time, one can besides understand the savings of one'due south wellness majuscule, the outcome of which is "salubrious days". Outflow may be considered as one dimension of healthy days or measured in several dimensions of physical, mental wellness, and express action. People swallow a range of wellness inputs, including healthcare inputs, diet, exercise, and time, so they invest in health savings. These investments assist maintain or improve consumers' wellness reserves, providing them with salubrious days. Over time, health reserves may either grow, remain constant, or decrease with historic period due to illness or injury. As mentioned in Box iii, many technologies may generate health uppercase, using different amounts of time or health goods and services. Figure 3 shows how the ultimate goal of "healthy days" guides consumer decisions about the corporeality, time, and cost of investing in health storage. Nosotros will see that the prices of healthcare, the charge per unit of wages of individuals, and their productivity in the production of health make up one's mind how resource are allocated between wellness capital and other appurtenances and services that people buy. Consider a consumer who buys market inputs (e.yard., medical care, nutrient, wearable) and combines them with his or her own time to generate a health capital reserve that increases his or her utility [2].

ii.4 Price elasticity of demand

Every bit an economic principle, the toll of a good and the demand for that good are inversely related. That is, the college the price of a commodity, the less demand at that place is for that commodity, and the lower the price of a good, the greater the demand for it. Price elasticity of need shows that a 1 percentage change in a good toll causes a few percent changes in the demand. For example, if the price of a car rises by one percent, the demand for information technology volition fall by a few percent, and vice versa, if the price of a vehicle falls by one percentage, the need volition increment by a few percent.

Three things can happen when we calculate the price elasticity for a article:

When a ane pct modify in the price of a commodity occurs, the demand for that commodity changes by more than one percent. These types of goods are very price sensitive.
When a one percent change in a good cost causes the demand for that good to change by less than one percent, this type of product is called inelastic. Demand for this type of goods shows a mild reaction to price changes.
The third example is when a i percent alter in the price of a good causes a one percentage change in the demand for that good.

If there is an inverse human relationship between price and need, demand elasticity will always exist negative because the percentage alter in one face or denominator is a negative fraction. Therefore, after calculating the price elasticity of need, if the event, regardless of the negative sign of the number, becomes more than than one, the commodity with elasticity is less than i, the good without elasticity, and if it is equal to one, the good has a single elasticity.

Although the cost elasticity of a article tin be determined but past collecting price information and calculating, some factors affect this ratio.

2.5 Factors affecting the toll elasticity of demand

Alternative goods: The more alternative goods there are, the higher the price elasticity of that production. That is, when the cost changes, the demand for that product changes more than drastically. Besides, price changes in a product cause a shift in the demand for alternative goods. In the healthcare sector, there are unremarkably few alternatives to a health or medical intervention.

Complementary goods: When a production has a supplement, a change in the toll of a complementary production causes a change in the demand for another product. Maternal and child care can exist mentioned as complementary appurtenances in the field of health (Figure four).

Commodity prices: In general, if the price of a commodity is very low, the amount of demand does non react to price changes. Only loftier-priced products are attractive. On the other mitt, different results are obtained depending on the price at which the need elasticity is calculated. As mentioned initially, the price of a product has an inverse relationship with the corporeality of demand. When the price is precisely in the center of the demand curve of a commodity, the article has a single elasticity. Also, if the toll is less than the midpoint, the product in that range is unattractive. If the price is above the midpoint, the product volition exist pulled. Yous tin can run across this in the chart beneath.

Marginal modes in need elasticity : At that place are besides two cases in which the product is completely rubberband or completely non-elastic. If the practiced is fully elastic, the demand for that proficient will exist nil if there is a slight change in the toll of the good. Maybe this is the case for a salesperson in a highly competitive market place. If the good is completely inelastic, need is a stock-still figure, regardless of the price range. You can run across these modes in Figure five.

Effigy 5.

Marginal modes in need elasticity.

References

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v. Wellay, T., Gebreslassie, M., Mesele, G., Gebretinsae, H., Ayele, B., Tewelde, A., & Zewedie, Y. (2018). Demand for health care service and associated factors among patients in the community of Tsegedie District, northern Ethiopia. BMC Health Services Research,18(1), 697. doi:ten.1186/s12913-018-3490-ii
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Written By

Alireza Ghorbani

Submitted: June third, 2021 Reviewed: June 15th, 2021 Published: July 20th, 2021

© 2021 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Artistic Eatables Attribution 3.0 License, which permits unrestricted apply, distribution, and reproduction in whatever medium, provided the original work is properly cited.