Price Elasticity: % Change In The Quantity Demanded/ % Change In The Price Report Examples
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Adopting a career in medical education is undoubtedly a noble decision to serve the society, however, on a personal part too, we should think of the cost involved and if the private practice will be an optimal decision for us. The evaluation process involves an in-depth study of the demand-supply factors and also the cost involved. Below discussed are such factors in detail that will help us on achieving a rational decision:
Part 1: Demand Determinant
i)Price of medical education:
Other factors remaining constant, higher will be the cost of medical education; less will be the demand for it. For Instance, a 4 year MBBS education that cost more than $50000 is also a major factor of reduced number of students going for medical education. Thus, higher the cost of medical education less will be the enrollment in the medical programmes and subsequently, lower will be the physicians in the market.
ii) Population density of the practicing area:
Population of the native area where you are willing to begin your practice after you complete our education is also a major determinant of the demand for your medical services. For Instance, success probability of opening the clinic near midtown area is much higher than a far-flung suburb area as the former is densely populated and you can expect more patients to visit your clinic in comparison to the clinic being situated in a low densely populated area.
iii) Preference to a new technology:
If the consumers of medical services are awaiting new medical technology for a disease that is common in the area, you can expect that your medical services will be in high demand. For Instance, establishing the clinic with latest FUE technology for hair transplant is likely to attract more patients for a Trichologist.
Having stated that the cost of medical education has a direct relationship with its quantity demand, commenting on the price elasticity will help us in achieving in an in-depth view as how elastic will be the demand by the medical professionals to the total cost of medical program. Important to note, price elasticity refers to as a % change in the quantity demanded in response to % change in the price of the good or service being offered. The same is calculated as follows:
Part 2: Supply Determinant
The supply of physicians in the market will also depend upon the assistance by the federal or state agencies. In a recent report, the amount of physicians in the market in the market will be 90000 less than the required number without increase in residency training and required assistance by the federal government to cover up this demand supply gap.
ii)Conditions for the medical professionals:
A recent report has claimed that fewer medical professionals are moving from their existing jobs as now they are least motivated by factors such as better caseloads or better community, etc. as they are uncertain for the afterlife in the event of growing economic uncertainty. Such factors can also be demotivating for the new generation to adopt the medical profession as their career, thus, lowering the supply of the medical professionals.
iii)Variable costs associated with medical clinic:
As said in the beginning, in order to ensure a good clientage, you will need to have an office near mid-town where both the population and audacity to pay for medical services shall be good. However, the supply of your medical services will also be dependent on the proportion of your variable cost. In other words, higher the variable cost (clinic rent, salaries, etc.) for you, lesser will your supply of medical services to the patients. For instance, if the rent goes higher, you may reduce the appointment time being offered at the same price before.
Noted from the above discussion and the figures used, i can conclude that the demand for the medical professionals is extremely high than the demand the gap will keep on widening. Thus, I believe that despite of high cost of tuition, there is a good potential for you to start your practice and it is most likely that you will earn normal profits in the beginning which followed by mouth publicity by your clients.
Fewer physicians move, a sign of career caution. (2011, June 6). Retrieved January 28, 2015, from http://www.medicalwebtimes.com/read/fewer_physicians_move_a_sign_of_career_caution/
Physician Shortages to Worsen Without. (n.d.). Retrieved January 28, 2015, from https://www.aamc.org/download/153160/data/physician_shortages_to_worsen_without_increases_in_residency_tr.pdf
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