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THE DEMAND FOR HEALTH CARE

  1. 1. The Demand for Healthcare (Medical Care) Services
  2. 2. Healthcare goods and services are both: • Consumption goods (people consume it because it makes them feel good), and • Investment goods (people consume health because better health makes them more productive) People who consume healthcare goods often do not have perfect knowledge about their condition and therefore will often rely on health professionals for decision-making. End consumers may not be the decision-makers.
  3. 3. Ordinary Commodities Consumers EVALUATE to buy a product Consumers DECIDE to buy or not Consumers PAY
  4. 4. Healthcare Goods and Services MD s Patients evaluate consume which goods and services Patient patients need. seeks medical attention Patients pay
  5. 5. Economic Variables (Feldstein) • Income Higher income = higher expenditures for health; demand more modern and expensive healthcare; percentage spent on health declines as income increases. • Price of commodity Lower priced goods or providers will have higher probability of being used.
  6. 6. Cultural-Demographic Factors (Feldstein) • Education Higher education: more open to medical care; increase in preventive methods, decrease in medical care for acute illness. • Marital Status Single people will have a greater tendency to use more medical care.
  7. 7. Determinants of Health-seeking Behavior • Age and Gender - Sickness reported more often during young childhood and later stage of adult life. - Higher probability of adults NOT to report sickness - self-medication a. Early stage of life - nutritional and infectious b. Later stage of life - chronic and degenerative - Females live longer and demand more.
  8. 8. • Locality/Access to Health Facilities - Better access to health facilities > less time consumed to access healthcare > increased demand for healthcare • Locality/Access to Health Facilities - Better access to health facilities > less time consumed to access healthcare > increased demand for healthcare
  9. 9. • Household Size - Generally, the greater the household size the greater the demand but is offset by the effects of income > determining factor = per capita income of household • Insurance Effect - Health Insurance makes the health commodity “cheaper” for the one utilizing healthcare. It affects the demand for healthcare in two ways: • Lower effective rates > increases the use rates. • It increases the utilization of more expensive services.

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