Individual decisions and efficiency in health care demand

Individual decision-making and the generation of medical demand are crucial subjects in healthcare economics. The following scientific discussion can be classified into these threads. The demand for health care services is typically connected to characteristic imperfections reflecting a bias between an objective and a subjective assessment of a specific demand situation or externally caused frictions. For that reason, the realized demand is not necessarily connected to an efficient allocation of resources. Hence, it is a crucial objective to analyze individual decision-making related on the one hand to specific treatment alternatives and on the other hand to the specified decision framework. This framework is characterized by both the attributes of the individual as well as by the external conditions in which the decision takes place. Theirby, the analysis focuses specifically on potential sources of demand inefficiency and their effectiveness. The following discussion broach the issue of two significant objectives within health economics: 1. Trade in medical care and patient migration, 2. Patient autonomy and education. Both fields find their analytical basis in a micro-economic discussion of individual decision behavior. The first field analyzes the decision between medical provision at home or abroad. This subject is specifically related to a potential efficiency gain due to the existence of cross-border price and quality gradients, usually a source of gains in trade. In the focus of the analysis is the impact of the specific characteristics of these gradients as determinants of cross-border medical demand. The second field discusses the investment decision in measures of patient education and prevention in a framework of a common consultation and self-care as imperfect treatment alternatives due to imperfect competences of self-diagnosis and medical self-supply. This subject is related to the commonly acknowledged positive correlation between health and education. Education is able to improve the quality of health production and, therefore, has a specific impact with respect to increasing autonomous behavior of the individual in issues of health production. The specific environment of these decisions significantly influences the mechanism of decision-making and the final outcome; this must be assessed according to the effect on the allocative efficiency of medical demand. The role of price and quality gradients between alternatives, the differentiation of illnesses, as well as subjective factors, are crucial to the results. Moreover, the individual's ability to appraise his or her own health stock and demand decisions is itself risky. Therefore, the form of the insurance coverage is another important element when analyzing individual decisions. The following discussion will clarify the decision-making mechanisms and their impact on efficient resource allocation. Since the focus is on demand behavior, the interaction with, and therefore the behavior of, the supply side is not explicitly formulated