Price attainment in the community would imply a

Price
elasticity of demand refers to the changes in demand of a product as a result
of a change in price at a specific period of time ceteris paribus. It is computed
by dividing the percentage change in the quantity demanded of a product by the
percentage change in price i.e. (% change in quantity/% change in price). Economists
use the midpoint method of elasticity to calculate price elasticity of demand.
%change in quantity= Q2-Q1 divided by (Q2+Q1)/2 then multiplied by 100 while
%change in price=P2-P1 divided by (P2+P1)/2 then multiplied by 100. Elastic demand
refers to a case where elasticity is greater that one implying a product’s demand
is significantly affected by changes in price. An inelastic demand is one in
which elasticity is less than one signifying that demand for the product was
little affected by price change. Unitary elasticity of demand signifies proportional
change in demand in relation to price change.  

There
is high likelihood of the price elasticity of demand for healthcare to vary
with health status since it will depend on the services being sought by a
patient. In general, it has been demonstrated that demand for healthcare is inelastic.
For instance, in a case of a patient with life threatening conditions or whose
health is deteriorating, the patient will largely be insensitive to the cost of
care. Nonetheless, the presence of substitutes influence price elasticity because
substitutes more alternatives to the patient. If a patient can access more substitutes
that can improve his or her health status, an increase in price will lead to
patients seeking an alternative that would equally enhance their health status.
Health status can be improved by seeking inpatient or outpatient services that
have no substitutes thus healthcare demand is inelastic. However, preventive
care and pharmaceutical products have several substitutes that patients can use
to improve their health status; thus, their price elasticity is elastic. As prices
of preventive care and pharmaceutical products increase, patients will opt for substitutes
that are less costly.

An
improvement in educational attainment in the community would imply a decrease
in the demand for health care. The inverse relationship between level of
education and demand for healthcare has also been proved in a number of
studies. People who attain high level of education tend to be healthier thus
decreased demand for health care. Education increases exposure therefore an
individual with a high level of education is more adroit at identifying developing
illnesses at an early stage. Consequently, they will either receive early treatment
or even adopt a different lifestyle thus avoiding the ailment. Furthermore, it
has been established that people with higher levels of education tend to smoke
less, avoid taking alcohol or exercise restraint in drinking and exercise more
often. They also tend to eat healthier food and balanced diet. As a result,
there is less demand for health care.

The
macroeconomic data indicating higher income elasticity for health care implies
health care is a superior good. A superior product is a good or service that
records increased demand when there is an increase in income. The income
elasticity of demand for such a product is positive and greater than 1. On the
converse, a normal good has an income elasticity of demand equal to or less
than one but greater than zero. When there is an increase in income, there is
increased demand for both superior and normal goods i.e. the demand curve
shifts to the right. The main difference is that superior goods have an income elasticity
of demand greater than one i.e. an increase in income leads to considerable increase
in the amount of superior goods demanded compared to the increase in demand for
a normal good as depicted by higher income elasticity for health care. People desire
to be happier and healthier thus an increase in income leads to higher demand
for healthcare for regular.

Time
costs in health care encompasses time taken traveling to see a doctor, waiting
time before seeing a doctor, time spent during tests and treatment, taking
medication, seeking medical care for other people as well as settling medical
bills. The above factors are collectively referred to as opportunity costs of
time. Opportunity cost is defined as the foregone value of an alternative when a
choice is made. For instance, when visiting a physician, one foregoes the
hourly wages that would have been earned if you were working. Conversely,
promise for a longer better life after the doctor’s visit compensate for the earnings
that were lost.

Time
is indeed more costly for patients with higher wage rates. This arises from the
higher opportunity cost of time that higher wage earners experience. For instance,
if there are two patients, one earning 35 dollars per hour and the other earning
15 dollars per hour, and both are seeking healthcare, they cost of time is higher
for the patient with a higher hourly wage. For every minute spent seeking
healthcare, the patient with the higher wage loses 0.58 dollars which is more
than double compared to time cost for the patient earning the relatively lower
wage.   

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