1- explain the concept of supplier-induced demand in medical
markets?
2- explain methods that can be...
1- explain the concept of supplier-induced demand in medical
markets?
2- explain methods that can be used to reduce it in
healthcare.
Solutions
Expert Solution
Answer)
Supplier induced demand means the unnecessary demand created by
supplier owing to asymmetrical or incomplete information,when we
talk about medical markets,we have to know that lot of patients
depend on their doctors for advice,now doctors may advice them a
particular medicine owing to their own cost benefits(a new medicine
so discount for orders or company running promotional programs),now
patient is not aware and is not having complete information for
them a medicine recommended by doctors is fine,for doctors they are
okay if its same chemiclas while for medical representatives it is
a way to increase demand which we know as supplier induced
demand.
Following are the methods in which it can be reduced in
healthcare
A board which can keep a check on such practises.
Knowledge portal for patients can help reduce this incomplete
and imperfect information which is the main cause of such induced
demands.
Quota being setup for a particular medicine being recommended
or continuos checks beyond a pre defined quota can help the
cause.
Focus on keeping in check the marketing promotions being done
to induce such demands.
COLLAPSE Supplier-induced demand (SID) hypothesis states that
physicians abuse their role as medical advisors to advance their
own economic self interests. Theses self-interest actions include
prescribing medical care beyond what is needed, and it can include
unnecessary follow-up visit and unnecessary surgery (SANTERRE).
Patients depend on physician to give them the right advice and the
right treatment but some feel that physicians are out for their own
economic interests. Some feel that physicians, when faced with a
decrease to their...
How can you estimate the magnitude of “supplier induced demand”?
(Please describe the empirical data you propose to use, and the
specification of the regression). What is the identification
challenge? How would you address the identification issue?
Describe the theory of
physician induced demand for medical services.
Explain how the dual nature of
the physician’s role as both advisor and provider support the
induced demand theory.
Identify and explain what
implications physician induced demand have for healthcare
policy.
Discuss how health insurance
reinforces physician induced demand.
Discuss what the natural
limits to the alleged problem of physician induced demand are.
The structure of the physicians service market has resulted in
the development of the supplier-induced demand hypothesis to
explain conduct in the market. In at least a 250 word posting,
discuss the theoretical and empirical issues surrounding the
supplier-induced demand hypothesis. After reading the postings of
other students select the one that you found most interesting to
respond to. Your response should be at least 75 words and include
why you found this posting interesting.
The structure of the physician's service market has resulted in
the development of the supplier-induced demand hypothesis to
explain conduct in the market. In at least a 250 word posting,
discuss the theoretical and empirical issues surrounding the
supplier-induced demand hypothesis.
Question 5 (5 marks)
Describe what is meant by supplier-induced demand? (use asupply
and demand diagram to help you explain your answer)
Why would economists be concerned about the presence of
supply-induced demand?
1.Explain the concept of rationality in respect to financial
markets.
2.Explain how, according to Shleifer (2000), supporters of EMH
reconcile irrationality with efficient markets in the case of:
i)Uncorrelated trading strategies
ii)Correlated trading strategies
3.According to neoclassical theories, prices are always set
according to asset risk (The CAPM). What are the behavioural
implications of this assertion?
When would supplier
induced demand increase? When will it decrease? Please provide
examples! If doctors are presented a bonus for every patient they
see that day would supplier induced demand increase or
decrease?