How much will the quantity of emergency care fall if user fees are increased?

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Background

In Hong Kong, there is a high demand for the accident and emergency services that are provided by the Hospital Authority and the Emergency Ambulatory services. Despite the measures that have been adopted by the HA to address the demand of these services, and limit them to only the urgent needs, there has been an increase of semi-urgent and non-urgent demand for these services. In addition to that, the population of the senior population in Hong Kong is expected to increase from 13% in 2011 to 30% by 2041⁶. This is also expected to occur in the Mainland China region. An increase in the number of the ageing population will increase the burden on the healthcare services, especially in terms of the Accident and Emergency services (AES). There is the need to assess if an increase in the emergency services fees will contribute to a reduction in the demand of the emergency services in Hong Kong.

Economic Analysis

Supply of Accident and Emergency Healthcare Services

Supply entails the willingness and the ability to sell a product at a given price, and over a specific duration. This means that in an ideal situation, a company is able to measure its overall cost in the production, and determine its ability to produce to a specific number of clients¹. However, the complexity of the relationship between health care services and health care needs indicates that it can be difficult to specify how an output will be impacted as a result of the changes in the inputs³. It may be difficult to determine, if an increase in the health care staff and emergency and accident casualty rooms will improve the access of these services to patients as health care is not considered a direct benefit to the consumer.

In actual sense, in the determination of the capability of a health care facility to provide the required emergency and accident services, the facility has to take into consideration the influences on the supply⁴. It is imperative for the organization to take into consideration the overall costs that the hospital will incur. An organization had to take into consideration its goals of increasing the supply of the accident and emergency services⁵. The health care facility located in an area where there is a high likelihood of accident victims, and how will the increase of these services improve the quality of the services that they are provided with.

Demand for the Accident and Emergency Services

Demand of a product is important in terms of understanding the consumption patterns, specifically, the overall relationship between the price of a product, and the overall quantity that will be demanded. In the event that the price of the accident and emergency services is increased, it will contribute to a decrease in the overall demand of this service. A majority of people will only use these services when it is essential, for instance, during life threatening situations¹. At this point the value of an individual will be considered to be higher than the prices that are charged to access this service. To put it into perspective, for these services, a change in price will result in a smaller percentage change in the overall demand of this product, which is an indication that this will be an inelastic demand. Even in the newspaper article, it indicated that, it is expected that a 120% price hike will result into a 10% decrease in demand. The change in demand, is considered less significant, in comparison to the changes in the overall prices of the product³. Emergency and accident health care services are a necessity for a patient who has either been involved in an accident, or is experiencing a high risk situation. This means that if they do not get access to the required services, then it is highly probable that they may die, or their health situation will become worse.

Policy Recommendation

Based on the analysis of the two economic models, it highly unlikely that a price hike will reduce the demand of the accident and emergency services in Hong Kong. The demand of the AES in Hong Kong is attributed to conveniene and accessibility. Other factors that have contributed to the increase in the demand of the AES are shortage of out-patient services, and lack of primary healthcare services. Policy recommendations have to deal with these issues. There is the need to have an increase in out-patient services. There is the need to improve the availability of medical practitioners for consultation services. This will ensure that the needs of the semi-urgent and non-urgent patient health care services are met, and addressed. If this is achieved, it will contribute to a reduction of the demand for AES.

Evaluation

Conducting randomised controlled trials on health institutions whereby there has been a price hike of the accident and emergency services can help in determining the supply of the service in relation to its demand⁵. Researchers can conduct interviews, or use questionnaires to collect data from them, which will be subjected to data analysis and the researchers will determine the actual impact of price hike of these health services on the overall demand.

Summary

The focus of this paper was to evaluate the impact of price hike on the demand of emergency and accident services in the Hong Kong hospitals. Using the Demand and Supply economic models, it was determined that it will result in an inelastic demand, because this is an essential service. To reduce the demand from semi-urgent and non-urgent patients, there is the need to improve the consultation, and out-patient services in Hong Kong.

Reference List

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