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Providers’ Impact on Demand for Care

Physicians have been regarded as having two main roles: One, to act in an advisory capacity and inform patients of their level of health and the activities and treatments that might improve their health, and two, to undertake the treatments their patients have decided upon. When introducing physicians into the demand analysis, the framework is widened because the patient’s demand is also dependent on the interaction and recommendations of the physician. Physicians can conceivably change the patient’s demand for medical care with the information they provide.

Using your textbook, the Argosy University online library resources, and the Internet, research the impact healthcare providers have on consumer demand for care. Based on your findings, respond to the following questions:

• What types of situations might encourage physicians to provide more services to patients than what might be necessary?
• What is information asymmetry and how is it related to supplier-induced demand?

Write your response to each question in 1 to 2 paragraphs.