A supply-demand model of health care financing with an by Ricardo A. Bitran

By Ricardo A. Bitran

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Extra resources for A supply-demand model of health care financing with an application to Zaire: a training tool

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The absence of supply constraints implies that, for each individual provider, demand is always equal to utilization. Utilization is the health system's output and is a proxy for the system's health outcome that consists of the deaths and illnesses averted or cured. The focus facility's financial performance is measured by its revenue from cost recovery, its costs, and the associated net income (or profit), which is the difference between total revenue and costs. The model has three additional limitations.

Pn*) that satisfies the condition NI = 0.  . ,Pn*)s, for s = 1 to S. To illustrate the practical relevance of this discussion, consider the example of a facility that chooses to price preventive services slightly below average cost to promote consumption of preventive care (because of positive externalities or misinformation about consumption benefits) and that, to compensate for this subsidy while breaking even, it prices curative services above average cost. This same facility could also break even by providing preventive services at no charge while charging prices much higher than average cost for curative care.

I have implemented the model in Lotus 1-2-3 using that program's macrolanguage. While testing the model, several programming bugs have surfaced. Although the current version appears to be problem-free, it is possible that some defects still remain. If so, please contact me and I will try to correct them. RICARDO BITRAN Page xi Acknowledgments The development of this model has been made possible thanks to the financial support of the Resources for Child Health Project (REACH), the Zaire-based Basic Rural Health Project (SANRU), and the Economic Development Institute (EDI) of the World Bank.

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