Hen 368 lecture 7 the demand for medical care

557 views

Published on

Published in: Health & Medicine, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
557
On SlideShare
0
From Embeds
0
Number of Embeds
265
Actions
Shares
0
Downloads
23
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Hen 368 lecture 7 the demand for medical care

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

×