HE: MARKET, COMPETITION, AND LAW OF DEMAND

MARKET

• Any set of arrangements which allows consumers and vendors to converse and make an arrangement for an exchange of goods, services and/or resources.

• In economics, it refers to any process of exchange between buyers and sellers or consumer and vendor.

 Health Care Market

• a multidisciplinary area of public health practice.

• This innovative approach draws from traditional marketing theories and principles and adds science-based strategies to prevention, health promotion and health protection.

• framework of theories,

• Strategies, and

• techniques

Healthcare market provides these three:

Health care market

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* It involves creating, communicating, and delivering health information and interventions using customer-centered and science-based strategies to protect and promote the health or diverse populations.
* refers to vendors and sellers who continuously interact to trade healthcare.

• The individual patient

• The care team

• The organization

• The political and economic environment

Four-level Model of the Health Care System as adopted from Ferlie and Shortell (ZUDI)

 care team

It includes professional care providers (e.g. clinicians, pharmacists, and others), the patient, and family members;

organization

 (e.g., hospital, clinic, nursing home, etc.) that supports the development and work of care teams by providing infrastructure and complementary resources

political and economic environment

e.g., regulatory, financial, payment regimes, and markets and the conditions under which organizations, care teams, individual patients, and individual care providers operate.

DEMAN SCHEDULE

• Specifies the units of good or service an individual is willing and able to purchase at alternative prices during a given period of time.

• Relationship between price and quantity demanded is inversely proportional. more units are purchased at lower given prices which correspond to increased income effect.

**Competition**

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 refers to the rivalry between companies selling similar products and services with the goal of achieving revenue, profit, and market-share growth

• Availability of Health Professionals;

• Professional Fee in exchange for services;

• Pricey medical/ laboratory fees

• Complete facilities

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Influence of buyers’ attitude on market price of medical care:

DEMAND

• A list or schedule of alternative (different) quantities of a particular good or service that a buyer would be willing and able to buy at alternative prices.

• The idea of it is to see how the buyer reacts to a change in price and availability of product.

• It reflects both the ability and willingness of the consumer to buy.

• It represents the buyer's choice/decision and not the seller's choice.

SUPPLY

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* It represents how much the market can offer with the given demand. It indicates availability of certain goods/services, and the willingness of the seller/vendor to produce and offer for sale over the range of price and available quantity.
* It is a collective term for the amount of goods and services which is offered for sale at a given price and specific price.

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**The Demand Curve and Demand Schedule**

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* refers to the predictable relationship between price and quantity demanded which allows consumers to define demand formally as the quantity of goods or service that the buyers are willing and able to buy at every conceivable price.

Demand curve

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*  illustrates the relationship between the demand and the price when all the influential factors and constraints are considered.

Demand schedule

a priority list or quantities demanded at each different price when all other influences on buying the commodity remain the same

 sellers

* the part of the market that sells the commodity or performs the services.
* Objective: maximize profit with the available resources

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* seeking to maximize profit leads to provision of healthcare delivery or services at higher prices

How to maximize profits?

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* positive relationship between price ad quantity supplied. If the price changes, there is a movement along the supply curve.

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**What are the options in maximizing profits with the given resources?**

__**Economic principle:**__

People satisfaction = maximization of gain expenditure/investment

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* This means that we all try to gain as much satisfaction as possible from our consumption of goods and/or services.