The Role of Supply and Demand in the Healthcare Economy

The Role of Supply and Demand in the Healthcare Economy

The Concept of Supply and Demand and How It Relates To the Provision of Healthcare

Demand refers to the number of customers who are able and willing to purchase products at different prices during a specific period. Supply is the total amount of a particular service or product available to customers. In the healthcare sector, demand is characterized by the level of a person’s consumption in case of injury or illness. The consumption could differ based on demand factors such as cost of care, income, social norms, education, traditions, and the services’ appropriateness. According to Barker (2013), demand in healthcare is classified as derived demand arising from the primary demand for good health needed for investment and consumption purposes. Supply in healthcare refers to clinical resources in a healthcare facility (Betcheva et al., 2020). The resources include medical supplies and qualified healthcare providers. Demand influences supply by dictating the quantity of resources needed to provide the required health services.

The Pandemic’s Contributions to Major Shortages of Needed Supplies and Equipment

The Covid-19 pandemic had a significant impact on the availability of medical resources. It created disruptions, leading to significant shortages of required equipment and supplies such as Personal Protective Equipment (PPE). The pandemic disrupted the export and import sectors, leading to a need for medical supplies and equipment in countries relying on imports of medical supplies. In the United States, the lack of medical supplies was also caused by government policies implemented to respond to the pandemic. For instance, the Trump administration cut the public health budget to streamline the pandemic response team (Cohen & Rodgers, 2020). The COVID-19 pandemic also led to a shortage of healthcare providers because of the unavailability of PPEs, thus making healthcare providers reluctant to attend to patients due to the fear of getting infected. The lack of medical supplies and resources during the COVID-19 pandemic resulted from increased demand for help and the delay in sourcing them. Additionally, countries like Spain experienced a shortage of mortuary services because of the increased death rate due to the pandemic.

Supply Shortages That a Surgery Center May See In a Similar Scenario In The Future and How to Offset or Avert Them

The significant supply shortages that can occur in a similar scenario in a surgery center are the shortage of PPEs and the shortage of qualified medical personnel. One of the things that can be done to offset the need is partnering with other healthcare facilities to outsource their medical personnel whenever there is a shortage. The second strategy is getting more PPE suppliers from different regions to maintain a supply flow even when disruptions occur. The center should also use variations to include items available in both disposable and nondisposable forms in their inventory. Another technique that can help avert the shortages in medical personnel is exercising contractual agreements with state health agencies.

A Strategy That Healthcare Leaders Can Implement To Avoid Supply Chain Disruption In The Future

Avoiding supply chain disruption in the future requires resilience. Wilding (2021) argues that a resilient supply chain is characterized by the ability to recover from disorders and resist the negative impacts of diseases. Healthcare leaders can achieve resilience through multisourcing, ecosystem partnerships, and nearshoring. The leaders need to understand their supplier networks well and categorize them by spending and revenue impact in case of a disruption. They must ensure that supplies are sourced from many suppliers in different regions. Nearshoring can offer the leaders a chance to have better control over inventory and supplies, thus enabling them to predict disruptions and prepare for shortages. Ecosystem partnership includes collaborating with strategic raw materials suppliers and service partners to improve preparedness for disruptions.

References

Barker, R. (2013). Healthcare demand— insatiable? Oxford Medicine Online. https://doi.org/10.1093/med/9780199600663.003.0003

Betcheva, L., Erhun, F., & Jiang, H. (2020). Healthcare supply chains. The Oxford Handbook of Supply Chain Management, 29-54. https://doi.org/10.1093/oxfordhb/9780190066727.013.13

Cohen, J., & Rodgers, Y. V. (2020). Contributing factors to personal protective equipment shortages during the COVID-19 pandemic. Preventive Medicine, 141, 106263. https://doi.org/10.1016/j.ypmed.2020.106263

Wilding, R. (2021). Supply chain risk management: Creating the resilient supply chain. International Encyclopedia of Transportation, 41-46. https://doi.org/10.1016/b978-0-08-102671-7.10216-7

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During the COVID-19 pandemic, people saw significant disruptions to supply lines throughout the country. Nowhere was this more evident than in the healthcare industry. Among the most significant impacts was the disruption in supply lines related to personal protective equipment (PPE) and patient care needs (e.g., beds, ventilators, and medications). Use your text as a resource to complete the following assignment and another help from the library. Please cite your sources.

The Role of Supply and Demand in the Healthcare Economy

Describe the concept of supply and demand and how it relates to healthcare provision.
Once the concept of supply and demand regarding healthcare has been explained, explain how the pandemic contributed to significant shortages of needed supplies and equipment.
Imagine yourself as a leader of a provider group (e.g., surgery center, orthopedic group, general practitioners). Indicate some of the supply shortages that your group may see in a similar scenario in the future. How can these be offset or averted?
Determine a strategy that healthcare leaders can implement to avoid supply chain disruption in the future.
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