When evaluating the factors of demand, it is important to note that there is a slight different between market and individual demands. Individual demand has several causes similar to those of market demand but with a different impact magnitude. In health economics, there are several primary factors influencing demand. The medical care demand is believed to have an uncertain nature. The first factor affecting this type of demand is age. The health stock of a person tends to depreciate with the increase in age. The elderly tend to seek medical attention more often compared to the youth. The second factor involves the rise in income levels. People tend to increase their health expenses in order to balance their increased rate of depreciation in their health stock (Santerre & Neun, 2010).
Additionally, education plays a part in individual demand since people presume that the more educated a person is, the more efficient they are in health production hence require less medical care. An additional factor includes the prices of compliment products (Jacobs & Rapoport, 2004). For example, the increase in the prices of contact lenses would lead to a decrease in the number of optometrist visits. Availability of substitutes may also have an impact on the demand for health care. An example involves the demand for care from either public or private hospitals. People may tend to substitute the private hospital care with the public hospitals.
The principal and the agent play a vital role in assisting the consumers to realize the need for medical attention. The agent and the principal should team up to make a strong medical agency (Arrow, 1968). The principal should come up with plans aimed at notifying the public on the importance of medical checkups. Besides, the agent should ensure effective implementation of the plans laid by the principal. Furthermore, both should work as a team in notifying the consumers on the health advantages of visiting the medical Centre.
Arrow, K. J. (1968). The economics of moral hazard: further comment. The American Economic Review, 537-539.
Jacobs, P., & Rapoport, J. (2004). The economics of health and medical care. Sudbury, MA: Jones and Bartlett Publishers.
Santerre, R. E., & Neun, S. P. (2010). Health economics: Theories, insights, and industry studies.