Hospital Demand

Hospital Demand


Hospitals should provide high quality care notwithstanding the ageing populations, budgetary restraints and diminishing resources. However, there is a set of predictors that affect the demand for in-patient services and this can also influence the quality of facilities offered. Similarly, the law of demand is applicable to the realm of health care because an increase in price of health care means that individuals will require less of it. The paper will lay emphasis on the factors that determine the demand for health care and how this relates to the price.

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Determinants for Hospital Care Demand

The demand for health care can be attributed to the consumer’s desires of achieving a larger stock of health capital. Besides, nursing attendance helps in producing health, which generates utility. Subsequently, utility can be specified as a function of the quantity of medical care (Duru & Paelinck, 2012). In this regard, the demand for healthcare can be determined by income. However, this is premised on the assumption that in-patient service is a good one. Furthermore, this implies that an increase in remuneration will offset an expansion in hospital services. The correlation stems from the fact that consumers have a higher purchasing power and are willing to pay more for each medical act of assistance (Morris, 2014). In fact, the decrease in income leads to a shift (left) of the demand curve and this  results in the reduction of clinic services required by clients. However, it is imperative to acknowledge inferior goods, which experience a reduction in demand despite the considerable revenue (Feldstein, 2012). An example is hospital out-patient services because due to the increased remuneration, consumers will prefer to consult a private physician.

The demand for nursing care can also be determined by the price of other types of complementary medical facilities. The relationship between obstetric and paediatric services is the case. An increase in fees for the latter influences the demand for the former. The demand for health care can also depend on substitute goods or services. For instance, the services of a private physician and hospital out-patient ones are substitute goods because they satisfy the same wants (Morris, 2014). Therefore, substantial fees for physician assistance will compel consumers to resort to hospital out-patient services where they can pay less for receiving the same medical attendance. Moreover, the demand for nursing care is determined by time costs, which encapsulate the opportunity value of time and the monetary expenses of travel (Feldstein, 2012).

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In addition, the demand for hospital services is affected by non-economic factors, for instance, the state of health. This can be attributed to the fact that sicker people require more careful medical attention. Subsequently, this increases their reliance on health center amenities in their quest of augmenting the overall stock of health. The other aspect includes tastes and preferences where personal factors and characteristics can influence the demand for in-patient care. In this regard, education, marital status and lifestyle play a major role in determining the healthcare services that an individual might prefer (Duru & Paelinck, 2012). For instance, married people might demand less medical aid especially when their spouses care for them. As far as the way of life is concerned, heavy smokers will have a higher necessity in hospital treatment compared to non-smokers. Similarly, those with chronic diseases will also exhibit the growing demand for nursing services.

How the Determinants for Hospital Care Relate to Price

The increase or decrease in price for in-patient care can be attributed to the factors that affect the demand for medical services. In fact, the stronger the demand is the higher is the price while a limited demand implies lower prices (Feldstein, 2012). For example, one of the aforementioned determinants of medical attendance is lifestyle where those with chronic diseases have the greater need for hospital care. Therefore, such individuals will incur an additional healthcare spending thus translating to escalation of prices for nursing assistance (Duru & Paelinck, 2012). Moreover, as for the personal factors, educated people with higher incomes prefer facilities with more advanced medical technologies.

They also demand the newest treatments, which cost more that the products they replace. Therefore, for such a bracket, the price of clinic services will be escalated due to their medical preferences. An increase in revenue leads to an expansion of hospital services. Additionally, this affects the price of in-patient services in the sense that when consumers have higher earnings they will seek for the best clinic facilities, which are bound to be expensive (Morris, 2014). For this reason, the price of nursing amenities will be inflated. However, the health care sector is a competitive market and the fee for medical attendance is settled at the equilibrium point where quantity of demand equates the quantity of supplies.

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A closer scrutiny on the demand of health care is useful because the health sector has been inflationary in recent years. The careful examination encapsulates an analysis of the price and demand of hospital services. Some of the determinants for in-patient care demand include remuneration, personal preferences and lifestyle among others. Similarly, the factors can also have an impact on how they relate to price. For instance, consumers with higher revenues pay more for nursing services compared to middle income ones. The bottom line is that an increase in demand leads to an escalated price while a decrease in demand leads to a lower price. However, the medical care market is competitive and price determination is a function of the interaction between the forces of demand and supply.

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