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Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
Hen 368 lecture 7 the demand for medical care
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Hen 368 lecture 7 the demand for medical care

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  • 1. Health EconomicsLecture 7The Demand for MedicalCare
  • 2. SPECIALThis week onlyGall Blatter surgery50% percent off
  • 3. Derived DemandGetting health by buyingmedical care
  • 4. NormalMarketMedicalMarketPlanned Yes NoKnow Price Yes NoGuarantee Yes NoEqual Information Yes No
  • 5. HealthMedical CostsLargeGainDiminishing Marginal UtilityHealth and Medical CostsSmallGain
  • 6. The Law of Demand01020304050607080901000 1 2 3 4 5 6 7 8 9 10PriceQuantity
  • 7. The Law of Demand01020304050607080901000 1 2 3 4 5 6 7 8 9 10PriceQuantity
  • 8. Law of DemandWhen price fallsquantity demand increasesWhen price increasesquantity demanded falls.
  • 9. Demand for Medical Careout-of-pocket priceincometime costsprices of substitutes and complimentstastes and preferencesphysical and mental profilestate of healthquality of care
  • 10. Out-of-Pocket PriceAfter insuranceCoinsuranceCopaymentsDeductible
  • 11. IncomeHigher income tends todemand more medical care
  • 12. Time CostsTime to visit medicalprovider and theopportunity costs
  • 13. Prices of Substitutes andComplimentsORAND
  • 14. Tastes and PreferencesMarital Status - lessEducation - ?Lifestyle - risky
  • 15. Physical and Mental ProfileGender - women moreRace/EthnicityAge - older more
  • 16. State of HealthSicker - MoreUnhealthy - More
  • 17. Quality of CareHard to measurenice officeperception is moreimportant than reality
  • 18. Market DemandIntensive MarginDo you buy more or less whenthe price changesExtensive MarginDo more or fewer people buywhen the price changes
  • 19. ElasticityA measure of how muchone economic variablerespondsto changes inanother economic variable
  • 20. ElasticityPercentage Change inQuantity DemandedPercentage Change inPrice
  • 21. Price Elasticity of Demand%%QDPPercentage Change in QuantityDemandedPercentage Change in Price
  • 22. Price Elasticity of Demand1ElasticInelastic<1 >11. Calculate Elasticity2.Take AbsoluteValue3. Compare to benchmark of 1
  • 23. What determinesPrice Elasticity ofDemand?
  • 24. Close SubstitutesPassage of TimeLuxuries vs. NecessitiesDefinition of MarketShare of Budget
  • 25. Close SubstitutesElastic >1Inelastic <1
  • 26. Passage of TimeMore TimeMore Elastic
  • 27. Luxuries vs. NecessitiesElastic Inelastic
  • 28. Share of the BudgetElasticInelasticSmall Large
  • 29. Price Elasticity of Demand% QD% P
  • 30. $0$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.001 2 3 4 5 6 7 8 9 10Gallons - GasolinePrice%QD%P(4-5)÷5(6-3)÷3-20%+100%.2
  • 31. Close SubstitutesPassage of TimeLuxuries vs. NecessitiesDefinition of MarketShare of Budget
  • 32. % QD% IIncome Elasticity of DemandNormal, Inferior, or Luxury?
  • 33. Income Elasticity of Demand0NormalInferior<0 >11Luxury0 to 1

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