The Many Faces of Supplier Induced Demand in Health Care

Abstract

Health economists look towards health care sector as a market whereby there is a distinct demand and supply phenomenon exists. Dearth of regulation of the doctors' practices lead to inappropriate and unjustifiable demand for health care among the patients. In developing and under-developed countries, this adverse practice may push a poor family into a vicious circle of poverty and illness, especially where out of pocket expenditure on health is too high. Unnecessary prescriptions, pro­longed treatments and unjustified user fee grossly deprive the patient's family financially. In developed countries, the flourishing health care technology and sophisticated laboratory diagnostics could incur significant expenditure which is sometimes even not covered under the insurance. State is the custodian of health care in any country; therefore, vigilant regulation of the health care providers may curb the supplier induced demand through strict laws and policies.