Need and Demand: Two Ends of the Rope
Christina Cruz Dominguez
Staff Writer
Steven Dominguez, MD, MPH
Medical Editor

Today we will define and distinguish the terms, Need and Demand for health services.
Daily we hear from politicians the statement: "The U.S. health care system needs
reform because there is too much need and too much demand."

The definition of Need in the health care services is dependent on the perception and
background of the individual or group, and/or the evaluation of the health
professional or system in relation to the person or group, which would require
intervention to achieve improvement or maintenance of the current state of health.

This dual nature of Need has been researched and defined by numerous health care
professionals.  Dr. Anderson of the UCLA School of Public Health defines Need as an
interaction between the concepts of perceived need and evaluated need in response
to a person or groups' demands for health care intervention or maintenance.  
Perceived need (otherwise known as want) is that quantity of medical services which
people feel they ought to consume to become or remain healthy; whereas, evaluated
need is that quantity of health care services which expert medical opinion believes
ought to be consumed for people to become or remain healthy.  The RAND
Corporation divides the definition of Need into the functional, mental, and social
needs; and the physiologic needs.  Similarly, other health professionals and policy
makers have defined need as the interaction between illness and disease with social
and professional attributable definitions.  

Need is determined by the cumulative effects of lifestyle, genetics, the environment,
and health services usage.  Lifestyle has the greatest influence and health services
usage has the least influence on the determination of Need.  There are also
variations in Need as a function of time.  The overlap of the perceived and evaluated
needs is termed convergence, and needs not perceived or evaluated are termed
unrecognized needs.  Unrecognized needs may become convergence needs as the
determinants of Need, and technology change.  Need exists in a circular relationship
with Demand and Health Status.

Therefore, Need may be defined as that quantity of health services which expert
medical opinion believes ought to be consumed for people to become or remain

Demand is defined as that "quantity of medical services consumed according to the
prices of medical services and other goods and services, financial resources, and
wants."  Therefore, Demand is the quantity of medical services consumed and may be
increased or decreased according to ones' tastes and preferences, price of the
medical service, and the price of other goods and services.

Demand is typically defined as the interaction between the Economic Model of Supply
and Demand, and the Behavioral Model of Health Services Usage.  The total concept
of the Economic Model utilizes perceived need to help calculate the level of the
demand curve, while maintaining evaluated need as an external value in calculating
the specific quantity of medical services demanded.  The terms "market shortage and
excess" refer to demand per given price in relation to supply.  "Normative shortage
and excess" refer to the difference between the curve of evaluated need (a vertical
curve since it assumes no influence from price) and the supply-demand curve; and is
a reflection of the asymmetry in knowledge between the medical provider and

The Behavioral Model of Health Services Usage states that the amounts of health
services people consume is determined by their predisposition to use services,
factors that enable (or impede) their use, and their Need for services.  Predisposing
factors (wants) are categorized as demographic, social, and health beliefs.  The
enabling factors reflect the availability and price of the health services in relation to
the individual and community resources.  Need is again defined as perceived and

The statement "The U.S. health care system needs reform because there is too much
need and too much demand" will be analyzed purely on the definitions of Need and
Demand outlined above.

The statement "The U.S. health care system needs reform because there is too much
need," assumes both an excess in perceived and evaluated need. An excess in
perceived need and evaluated need is not exclusive to any particular segment of  
society.  Inflated perceived and evaluated needs exist in consumers with third party
payers, prepaid health plans (HMO), government (Medicare, Medicaid, and VA), and
local indigent health care recipients.  The inflated perceived and evaluated needs
span the spectrum from preventive  to tertiary health services, from emergent to
chronic disease, and from accepting the initial evaluated need to second and third
opinions.  The inflated evaluated needs range from too frequent, unnecessary
primary, secondary, tertiary, and occupational health care visits and treatments, to
elective invasive procedures on individuals with short or poor life expectancies.  

The statement "The U.S. health care system needs reform because there is too much
demand," assumes an over-consumption of health care services.  The Economics
Model is vital to this assumption since it states that the demand curve for a particular
service will shift depending on the change in price; for example, decreasing the price
will create a greater demand for services.  The Behavioral Model employs
predisposition, enabling factors, and Need as determinants for Demand.  Therefore,
Demand is a reactive (intervention and maintenance) and proactive (unrecognized
need) factor that is self-perpetuating; for example, the creation of new technology
allows for the discovery of new diseases, or an alternative (and usually more
expensive) method of treatment.

The Health Care Reform Debate  recognizes and attempts  to reform the above
assumption by employing a Public Health model to achieve its primary goal of
increasing the access to improve the quality of life throughout all age groups.  This
appears to be the governments' response to the Need and Demand theory which has
become our health care reality through inflated costs (provider and administrative)
and the maldistribution of health care resources (too many physicians in metropolitian
regions and too few in inner-city and rural areas).  Change is forthcoming.
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