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UBC Theses and Dissertations

An episodic approach to the demand for medical care Stoddart, Gregory Lloyd

Abstract

The thesis is an analytic and empirical investigation of factors Influencing the demand for medical care. It proceeds from the premise that the utilization process is best conceptualized as consisting of two stages, a patient-initiated stage and a physician-generated stage. Furthermore, due to the nature of medical care itself, the economic concept of "demand" can only meaningfully be applied to the former stage while the term "utilization" encompasses both stages. It is then demonstrated that previous demand models, which postulated autonomous consumer decision-making and were tested upon utilization data rather than indices of demand, have been both analytic and empirical misspecifications. Consequently a measure of patient-initiated utilization (i.e. demand), labelled "the episode of medical service", is defined, developed and employed in regression analysis of demand for and utilization of medical care by a sample of Vancouver families. The major thrusts of the empirical portion of the thesis, both of which are supported by the results, are first that an episodic approach should prove more appropriate for explanation of demand differentials than utilization differentials, and second that the conventional micro-economic model of demand must be re-interpreted with respect to a medical marketplace characterized by public medical insurance. The main empirical findings are the existence of a consistent, inverse, and approximately linear income-demand relationship, the existence of a non-linear education-demand relationship (positive at lower education levels but levelling off after high school), and the insignificance of indirect price effects.

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