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Monday, December 20, 2010

The Law of Supply and Demand

The law of supply and demand in health economics is simple and yet very complicated. It simply means that the demand of certain good should be met with the supply in order for goods to be at an equilibrium price, that is, there will be no increase in the price. The other scenario is for the supply to be more than the demand so that the price will decrease. When the demand is exactly met by the supply, then a state of equilibrium exists.

In health economics, this concerns four general aspects: personnel, land, technology and cost.

Personnel problems concern sufficient number of doctors, nurses, nursing aides, med. Techs, pharmacists and physical therapists. For economics to be successful concerning health personnel, ways and means should be adapted to maximize whatever number of personnel available. The budget for continuing education of health personnel could be maximized through a cost utility method. That is one personnel attends and then, “echoes” the seminar, lecture or updates to his colleagues.
Alternative but effective methods of therapy could also be utilized to come up with maximization of resources. Each land area should be used effectively and to its optimum.

Technology should be used for all patients and not only for a selected few. Health economics means the appropriation of limited resources effectively and optimally. The resource should be appropriated where it is most needed. If there is an excessive supply in one health branch, this should be given to another branch that needs it more.

Health economics does not only look into the financial aspects of the health community but also into then other aspects like technology, personnel and land. For cost to be properly appropriated there should be proper planning and implementation.

Technology should only be purchased if that particular area needs them. Machines and technology should be relevant to the needs of that area; it would be wasted money if the technology bought will only gather dust and become rusty.

An example is when the area has more cardiovascular patients, then an ECG would definitely be needed; if the area has more lung diseases, then a chest x-ray should be bought. These are all examples to optimize the scarce resources available areas or states.

The law of supply and demand in health economics is a vital issue that health officers should look into. It is microeconomics, which contributes towards macroeconomics. A thriving national economy depends upon these various microeconomics.