Economics plays an important role in the healthcare industry in the US. The relationship between different organizations and individuals involved in the production and consumption of health goods and services in the US is a complex one. The economic need of an individual in terms of healthcare is main idea behind the consumption while organizations provide the above needed services.
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The healthcare industry is subject to all the economic trends through production of goods and services which in this case are the drugs, equipment and the services rendered by medical professionals. Additionally, it’s also shaped by the forces of demand and supply; demand in this case denoting the willingness and capacity of consumers to pay for the healthcare products on offer.
Supply on the other hand denotes the presence centers that provide medical services and the ability for the manufacturers of these products avail the products to the consumers. Besides the forces of demand and supply, there are economic variables including time, accessibility of drugs and services and user charges as applied in the industry.
The discussion will focus on the above principles of economics as they apply to the healthcare industry in the US. Precisely, the discussion will focus on the supply and demand of endocrinology services in the US. There will also be a discussion on the economic relationship between the availability of these services in the US and the economic variables involved especially cost and access.
Endocrinologists help in the treatment of endocrine disorders associated with diabetes conditions. Besides cancer and heart disease, diabetes is ranked as the other major disease among the American population.
The rise in the cases of diabetes, has led to a rise in demand of endocrinology services in the US. On the other hand however, the number of endocrinologists entering the market in the US has reduced considerably. The situation has therefore created a supply demand mismatch in the availability of these services.
According to Stewart (2008, p. 1), private clinics, publicly run institutions, academic medical centers and the pharmaceutical industry have seen their needs for endocrinologists increase. According to him, the demand for endocrinology services is going to rise further considering the fact that over 44 million people in the US need their services. Additionally, over 50% of the US population being obese means that endocrinologists will be needed more in the coming years.
The above demand is against a supply of slightly above 5000 endocrinologists available in the US according to a 2006 survey. Over 1500 of these are not primary care providers, leaving an average of 4000 endocrinologists in active practice. The above scenario clearly shows demand outstripping supply.
According to Mercer (2009, p. 1), the demand for endocrinology services is likely to rise further as many of the professionals reach retirement age in this decade. The above demand – supply mismatch has had its consequences felt by the consumers of these services in the US.
Basic economics dictate that the most likely effect when demand outstrips supply is the rise in price of goods and services. Sometimes, it may also affect the quality of the service being delivered and how it’s being delivered. Mercer (2009, p. 1) asserts that the disparity in the demand and supply of endocrinologists in the US has resulted in the failure to treat endocrinology patients in the traditional office model.
Stewart concurs in his analysis when he says that the shortage of endocrinologists negatively impacted access to care by patients with diabetes, obesity, adrenal disease and thyroid cancer. This shortage of endocrinologist has led to limited access and care of endocrinology patients. There are verified reports of patients waiting up to 6 months to gain access to an endocrinologist. As expected, the costs associated with accessing the services have risen.
This is partly because of the negative consequences of the failure to treat the condition appropriately due to waiting time and largely because of the economical factor of less supply. Instead they have adopted the volume solution to resolve the problem. Additionally, the industry has adopted an approach of engaging primary care physicians to handle endocrinology patients. This primarily aims at availing wide access to the services to the people who need them.
Rizza et al (2003, p. 1985) asserts that the demand for endocrinologists will exceed supply for the next two decades at least up to the year 2020. According to a supply model developed by the Rizza, the difference between the demand and supply of these services will reduce in the first decade of the 21st century as new professionals enter the field.
However, expected retirement of many endocrinologists who will be above 50 years during the decade will widen the demand and supply mismatch. There is sufficient reason to believe that improved supply of endocrinologists to the market in the US will eliminate most of the problems brought by the shortage.
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There is need to prop up the supply of endocrinologists in the US through the implementation of measures influenced by the factors of supply. First, it’s important that the trends in residence fellowships be improved so that the number of endocrinologists who complete the fellowships every year increases.
Secondly, there is need to raise the retirement age of medical practitioners but the raise should mainly target the endocrinology profession. That way the rate of attrition from the profession will be stemmed and effectively improving supply of the professionals. The above factors are expected to boost supply of the professionals to the market to end the bridge the gap between their demand supply deficits.
The above analysis represents the integration of the principles of economics especially demand and supply in the healthcare industry. Medical services in this case endocrinology are treated like any other commodity that I available in the market for the highest bidder. Like in pure economics, the economic variables of cost and access to good and services are affected by demand and supply.
A rational analysis on the number of professionals in the field of endocrinology in the US and the demand that is currently available easily suggests a deficit in supply. The mismatch between the forces of demand and supply therefore has led to the rise n the costs associated with endocrinology services.
Additionally, access to the services has also been affected. Increasing the supply of this service will weigh down on demand and an equilibrium position will be achieved. The measures suggested in the last part of the discussion are meant to increase the supply through the supply chain which in this case is the training institutions.
Mercer, A. (2009). Supply and Demand. Diabetes Health. Retrieved from https://www.diabeteshealth.com/
Rizza, A.R. et al. (2003). A model to determine workforce needs for endocrinologists in the US 2020*. Journal of Clinical Endocrinology & Metabolism 88(5).1970- 1987.
Stewart, A. (2008).The United States Endocrinology Workforce: A Supply-Demand Mismatch. The Journal of Clinical Endocrinology & Metabolism April 1, 2008 vol. 93 no. 4 1164-1166.