The demand for healthcare services is driven by both consumption and investment motives. As consumption goods, healthcare makes people feel better, and as investment goods, better health increases productivity. Patients rely on healthcare professionals to evaluate their needs and make decisions. Demand is influenced by income, price, education, marital status, age, gender, access to facilities, household size, and insurance coverage. Higher incomes, education, prices, and insurance increase demand, while single and older individuals also tend to use more services.

1. The Demand for
Healthcare
(Medical Care) Services

2. Healthcare goods and services
are both:
• Consumption goods
(people consume it because it makes them feel
good), and
• Investment goods
(people consume health because better health
makes them more productive) People who
consume healthcare goods often do not have
perfect knowledge about their condition and
therefore will often rely on health
professionals for decision-making. End
consumers may not be the decision-makers.

3. Ordinary Commodities
Consumers
EVALUATE to
buy a product
Consumers
DECIDE to buy
or not
Consumers PAY

4. Healthcare Goods and Services
MD s Patients
evaluate consume
which goods
and services
Patient patients
need.
seeks
medical
attention
Patients
pay

5. Economic Variables (Feldstein)
• Income
Higher income = higher expenditures for
health; demand more modern and
expensive healthcare; percentage spent
on health declines as income increases.
• Price of commodity
Lower priced goods or providers will
have higher probability of being used.

6. Cultural-Demographic Factors
(Feldstein)
• Education
Higher education: more open to medical
care; increase in preventive methods,
decrease in medical care for acute illness.
• Marital Status
Single people will have a greater tendency
to use more medical care.

7. Determinants of
Health-seeking Behavior
• Age and Gender
- Sickness reported more often during young
childhood and later stage of adult life.
- Higher probability of adults NOT to report
sickness - self-medication
a. Early stage of life - nutritional and
infectious
b. Later stage of life - chronic and
degenerative
- Females live longer and demand more.

8. • Locality/Access to Health Facilities
- Better access to health facilities >
less time consumed to access
healthcare > increased demand for
healthcare
• Locality/Access to Health Facilities
- Better access to health facilities >
less time consumed to access
healthcare > increased demand for
healthcare

9. • Household Size
- Generally, the greater the household size the
greater the demand but is offset by the effects of
income > determining factor = per capita income
of household
• Insurance Effect
- Health Insurance makes the health
commodity “cheaper” for the one utilizing
healthcare. It affects the demand for
healthcare in two ways:
• Lower effective rates > increases the
use rates.
• It increases the utilization of more
expensive services.