Demand and Supply

Topics: Health care, Health economics, Supply and demand Pages: 6 (1817 words) Published: July 14, 2013
Demand Versus Supply
The Unites States economy shapes so many multifaceted interactions amidst health care employment, costs, health care coverage, as well as economic access to health outcomes and health care. In this paper, the student will select a service, such as health information technology, and discuss the effects on consumer demand on health information technology versus the economic variables of cost, access, and supply. In addition, the student will support her perspective and rationale for the continued provision of health information technology based on supply chain models. Demand and Supply

One cannot think about demand without supply and vice versa. Supply and demand relationships practically balance each other out (Johnson, 2013). Demand is the quantity of goods a buyer needs. There does have to be a distinction between quantity demanded and demand. The quantity demanded is the explicit quantity of a product buyers will pay for at a certain price. Supply is the total amount of a service or product in which a market will offer. As with demand, there is a quantity supplied. Quantity supplied is the sum of a service or product that suppliers are prepared to give at a certain price. As with almost everything else to do with some type of math, supply and demand has laws that each abides by (Johnson, 2013). The law of demand is when all factors stay constant, if a good has a higher price, individuals will not demand it as much. Opposite of that is that when the price of the good drops, the demand of the good will increase, and more people will want the product. The supply law is converse to the demand law. The supply law notes that when prices rise for certain services or products, dealers will be willing to provide more of the product. When a supplier provides more of a product or service, the more profits will be made. As revenue increases with the higher demand, the supply of products and services will increase. Supply and demand for health services and products continue to be in increased demand as more and more products and services are created and advanced. Service

According to the 2009 Deloitte Survey of Health Care Consumers, “Consumer appetite for electronic health records, online tools and services continues to grow” (Monegain, 2009, p. 1). Health information technology’s (HIT) main purpose is to understand, exchange, and gather health information from patients for health care professionals and health care payers (Gee & Newman, 2013). Some examples of HIT are electronic health records, clinical and administrative applications, and mobile applications which help engage the patient easier. HIT has brought innovations to many more consumers mobile devices and online. Users are progressively accepting advances that enhance convenience, self-care, control, and personalization of personal health information (PHI) (Monnegain, 2009). According to HealthcareIT News, individuals are wanting more of a say in his or her health care assessments and the demand for HIT and its impact has never been as favorable as it is right now. Cost

Technology progression has a significant impact on outcomes of health and health care spending (Baltagi, Moscone, & Tosetti, 2012). Technology advances permit people who could not be treated in the past to be treated or cured in the present. Progressive technology reduces treatment cost in some cases. For instance, technology is less insidious, reduces hospital stays, health costs, and rehabilitation length. However, according to the National Center of Biotechnology Information (NCBI), it is a challenge to analyze the cost of HIT as a whole system, because the system process has been developing over a long period of time (Shekelle, Morton, and Keeler, 2006). According to the article in the American Journal of Medicine, regarding HIT cost, two classes exist (Wang, Prosser, Bardon, Spurr, Carchidi, Kittler, Goldszer, Fairchild, and Sussman, 2003). The two cost...

References: Anderson, D., Britt, F., and Favre, D. (1997). The seven principles of supply chain management.
Baltagi, B. H., Moscone, F., & Tosetti, E. (2012). Medical technology and the production of
health care. Empirical Economics,42(2), 395-411
Gee, R. and Newman, J. (2013). Health information technology. Obstetrics & Gynecology,
121(6), p
Johnson, M. (2013). Economic basics: Supply and demand. Retrieved from:
http://www.sophia.org/economic-basics-supply-and-demand-tutorial
Monegain, B. (2009). Consumer demand for healthcare IT ‘never stronger’, survey shows.
Retrieved from: http://www.healthcareitnews.com/news/consumer-demand-healthcare-it-never-stronger-survey-shows
Ridjic, O., Ridjic, G., & Gineo, W. (2011). The contributions of eight cost drivers to the total
national health care cost. Acta Informatica Medica, 19(1), 4
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