Managed Care & Effect on Supply & Demand
The managed care has had a considerable impact on the supply and demand from the viewpoint of both patients and health care organizations.Managed Care & Effect on Supply & Demand
From the patient perspective, the managed care implies the reduction of health care costs due to the prevention of health care problems and more effective delivery of health care services. The prevention of health care problems implies that patients spend less on health care services and, what is more, the demand on health care services declines too (Hill, 2006). The decline of the demand occurs due to the effective preventive programs and at-home treatment of patients. At the same time, patients expect that the supply of health care services remains at the same level or even grows slightly because the growth of the supply occurs to meet needs of patients. Patients naturally expect that they will have access to all the services they have been accustomed to before the introduction of the managed care. Their health care needs may not change after the introduction of the managed care. This is why they expect that the supply of health care services increases since preventive health care services and outpatient treatment need more health care services than they used to receive before the managed care.Managed Care & Effect on Supply & Demand
As for the health care organization perspective, the trends in the supply and demand are quite different. To put it more precisely, health care organizations expect the improvement of the health care environment and the public health due to the higher effectiveness of the preventive health care. As many health care problems may be prevented, then the demand on health care services will drop (Thornton, 2002). Naturally, as the demand drops, health care organizations plan to reduce the supply because there will be no need in so much health care services as they have been delivered before the managed care.
Hence, patients and health care organizations have quite different perspectives on the managed care and supply and demand balance.
References:
Hill, J.E. (2006). The coming revolution in healthcare. Vital Speeches of the Day, 72(26), 774-777.
Thornton, J. (2002). Estimating a health production function for the US: Some new evidence, Applied Economics, 34, 59-62.Managed Care & Effect on Supply & Demand