BHA-FPX4112 The Supply and Demand of Health Care
The Supply and Demand of Health Care
The healthcare sector is unique since its impacts the lives of more people compared to other industries such as automobiles. The law of demand is similar in the health care sector and other markets such as automobiles. In this case, an increase in process reduces demand for services. However, consumers have an incentive to purchase more health care services due to incentives provided by insurance firms. The demand for health care services is also relatively inelastic, considering that patients purchase services at almost any rates when sick (Stadhoudersa et al., 2019).
Thus, patients and their families may avoid spending on other products to access the medical care they need. Comparing the supply and demand of health services to scenarios in the automobile sector highlights unique differences between the health care and other sectors. This paper discusses determinants of demand and supply in the health care sector and compares with scenarios in the automobile industry. The discussion provides insights into the uniqueness of the health care industry, where demand for services is simultaneously an investment for everyone aiming to maintain a healthier and productive life.
Demand of Health Care Services with the Demand of an Automobile
The United States healthcare system is experiencing significant reforms triggered by an increasing demand for health services. A high population and the growing number of elderly patients with multiple chronic conditions explains changes in the industry (Adaskou et al., 2021). The challenges trigger uncertainties about the future of the American healthcare system. Nonetheless, health remains an investment for millions of people across the world. Everyone desires to remain healthy, hence the decision to make health a simultaneous investment. In this case, consumers in the health care sector may choose to spend more on their current health to achieve significant benefits in the future (Rodriguez et al., 2021).
The demand for health care aligns with individual desire to remain productive and in good health (Adaskou et al., 2021). The various determinants of demand for health services include a patient’s income, accessibility of services, and health policies at local, state, and national levels. The common factors are cost and accessibility, which motivate individuals to engage primary care providers and specialists. Costs include expenses for therapies, medication, and medical procedures (Adaskou et al., 2021). Increase in cost of care triggers negative health-seeking behaviors, consequently lowering demand. More patients avoid the burden of paying more for primary, urgent, emergency care, and other essential services. In this case, patients are likely to skip appointments and other treatments that influence quality of care.
For automobile, the demand depends on fuel prices, income, and prevailing economic conditions. More people buy cars to enable them move from one place to another. As the prices of a car increases, the law of demand indicates that the quantity demanded of the care will decrease (Saidahrolovich et al., 2022). In this regard, individuals may delay purchasing a new car, prefer an affordable alternative, and choose to use an alternative mode of transportation. Since a car is an asset, a household considers consumption and saving aspects before making the decision to purchase a car. A household considers current and expected future income. Knowledge of increased benefits in the future convinces individuals to purchase a car.
Fuel prices are a primary determinant of motivation to purchase automobiles. The higher the fuel prices, the lower the demand for cars. As the price of fuel increases, buying and operating automobiles become more expensive for more people (Saidahrolovich et al., 2022). Similarly, consumers may prefer low mileage per liter in response to a rapid increase in the price of fuel. As fuel prices increase, users choose competing means of transportation such as bicycles, buses, or walking. Additionally, individuals buy vehicles for various reasons beside the cost of fuel. Inflation is among the causes of declining demand due to the high cost of living that convince people to consider alternatives such as using public transport. On the other hand, rising incomes motivate individuals to purchase cars due to desire to embrace a higher lifestyle (Saidahrolovich et al., 2022). A thriving economy increase purchasing power and makes vehicles affordable to middle and high-income earners. Demand in the healthcare and automobile sectors depends on individuals’ desire to live fulfilling lives. Demand in both industries also aligns with consumer income. A higher income triggers positive health-seeking behaviors and attitude. Individuals are also willing to buy cars when their income rises.