slides9 - Supplier Induced Demand Small Area Variation...

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Unformatted text preview: Supplier Induced Demand Small Area Variation Medical Malpractice Supply of health care Labor 2 Angela Fertig Spring 2010 Angela Fertig Supply of health care Labor 2 Supplier Induced Demand Small Area Variation Medical Malpractice Labor Topics Last time, we discussed the first 3. Now, we are moving to the last 3 topics. I Physician productivity I Shortages I Physician price discrimination I Supplier induced demand I Small area variation I Malpractice Angela Fertig Supply of health care Labor 2 Supplier Induced Demand Small Area Variation Medical Malpractice Supplier Induced Demand Physicians (supplier) use the fact that patients dont know what treatments they need and increase demand for their own services. Example: I If supply of doctors increased, we should see more health care at cheaper prices I However, physicians, who are losing earnings, increase the demand for their own services (SID) I The new price can be lower or higher than the original price ( P ). I But the total spent on health care is higher with SID. Angela Fertig Supply of health care Labor 2 Supplier Induced Demand Small Area Variation Medical Malpractice SID Graph Angela Fertig Supply of health care Labor 2 Supplier Induced Demand Small Area Variation Medical Malpractice SID Is it good or bad? Similar to advertising theory: I Supplier tells customer how great this product is I Wants them to buy it and buy it from them I Costs the supplier something to advertise (time, money, reputation) I Can be misleading and wasteful (buy something you dont need or that is harmful)...
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slides9 - Supplier Induced Demand Small Area Variation...

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