Supplier-Induced Demand
Friday, 28. March 2008, 00:45:01
Does Supplier-Induced Demand exist in health services in your country?
Assumming that the key point is what we call as “asymmetry information”. So the answer could be either “Yes” or “No”. I think that another important factor is about the morality and behavior of the doctor (health provider).
Considering that there is no supplier-induce demand existing in health care services as long as patients would choose “if they had available the same information and knowledge as the doctor”. It could non-induce demand if the doctor able to give explanation to the patient as well and giving the many option related to treatment, so that the patient could decide whether he or she will take that treatment. For example, at the some private hospital, the doctor or other health provider often explain obviously about patients’ disease; give information about how the appropriate treatment should be taken?; how long the patient should stay in a hospital?; what kind of medicine should be taken or does any other option of medicine?; what will happen if the patient takes one treatment or another treatment? Obviously, if the patient can get clearly information and he or she agree with those circumstances, there is no supplier-induce demand, because patients believe that there is no one had forced them. But, if we look further and further, all kinds of effort to convince the patient is not far from “high profit” intention. There are very often doctor exploits patients because of the patients’ ignorance. Some private hospital often provide a luxury room – instead of hotel --beyond the patient’s ability in order to get as high as possible of profit. So, it will be turned to the moral and behavior of health provider.
On the other hand, because of doctor determining all efforts which need to be conducted for healing the patient, so demand of health is not defined by patient but by doctor. There is no symmetry of information in health care with respect to the supply side and the demand side. These situations often push what we called as supply-induce demand (SID). It means that health service provider (doctor) can force the usage of abundant service, not fit with the appropriate standard, and patient in limitation of understanding surrender at induction usage of abundant and unnecessary health service because it will profitable of economic side to the doctor.
Mostly, health providers tend to exploit patient, even for poor people. For instance, when poor people (without having health card) get illness and go to the hospital, usually they intend to get the third class of hospital room because they do not have too much money to afford for higher class. But, hospital officer often not allow the patient to take that room. A common reason is that all third class of hospital rooms have already fully book. Furthermore, health provider offers the higher class; and the patients have no choice to take the higher class, otherwise they can not get any medical treatment. Also for outpatient, doctor often suggest for up visit (more than one visit), and patients have no more choice, otherwise to come and come again to see the doctor.
Other example, having health insurance could give a chance to the doctors to do moral hazard as a normal person does. In order to get as high as possible of profit, they often do excessive number of medical test, even unnecessary surgery because the patient will not pay anything and all of the costs of health care will be covered by insurance. This moral hazard tends to increase SID.
Assumming that the key point is what we call as “asymmetry information”. So the answer could be either “Yes” or “No”. I think that another important factor is about the morality and behavior of the doctor (health provider).
Considering that there is no supplier-induce demand existing in health care services as long as patients would choose “if they had available the same information and knowledge as the doctor”. It could non-induce demand if the doctor able to give explanation to the patient as well and giving the many option related to treatment, so that the patient could decide whether he or she will take that treatment. For example, at the some private hospital, the doctor or other health provider often explain obviously about patients’ disease; give information about how the appropriate treatment should be taken?; how long the patient should stay in a hospital?; what kind of medicine should be taken or does any other option of medicine?; what will happen if the patient takes one treatment or another treatment? Obviously, if the patient can get clearly information and he or she agree with those circumstances, there is no supplier-induce demand, because patients believe that there is no one had forced them. But, if we look further and further, all kinds of effort to convince the patient is not far from “high profit” intention. There are very often doctor exploits patients because of the patients’ ignorance. Some private hospital often provide a luxury room – instead of hotel --beyond the patient’s ability in order to get as high as possible of profit. So, it will be turned to the moral and behavior of health provider.
On the other hand, because of doctor determining all efforts which need to be conducted for healing the patient, so demand of health is not defined by patient but by doctor. There is no symmetry of information in health care with respect to the supply side and the demand side. These situations often push what we called as supply-induce demand (SID). It means that health service provider (doctor) can force the usage of abundant service, not fit with the appropriate standard, and patient in limitation of understanding surrender at induction usage of abundant and unnecessary health service because it will profitable of economic side to the doctor.
Mostly, health providers tend to exploit patient, even for poor people. For instance, when poor people (without having health card) get illness and go to the hospital, usually they intend to get the third class of hospital room because they do not have too much money to afford for higher class. But, hospital officer often not allow the patient to take that room. A common reason is that all third class of hospital rooms have already fully book. Furthermore, health provider offers the higher class; and the patients have no choice to take the higher class, otherwise they can not get any medical treatment. Also for outpatient, doctor often suggest for up visit (more than one visit), and patients have no more choice, otherwise to come and come again to see the doctor.
Other example, having health insurance could give a chance to the doctors to do moral hazard as a normal person does. In order to get as high as possible of profit, they often do excessive number of medical test, even unnecessary surgery because the patient will not pay anything and all of the costs of health care will be covered by insurance. This moral hazard tends to increase SID.
WIDGETIZE
matroxa # 4. January 2009, 17:24