HEALTH ECONOMICS AND PHYSIOTHERAPY: APPLYING CONCEPTS OF GLOBAL PRICE ELASTICITY
M Landry1, N Almasri2, S Dieye3, M Locke4, J Capo-Chichi5
1Duke Global Health Institute, Durham, United States, 2University of Jordan, Department of Physiotherapy, Amman, Jordan, 3World Confederation for Physical Therapy, London, United Kingdom, 4Movement Solutions Physiotherapy , Brisbane, Australia, 5Centre de Dépistage et de Traitement de l’Ulcère de Buruli d’Allada, Allada, Benin
Learning objectives:
- To develop a basic appreciation of the principles of health economics, specifically from a neo-classical interpretation of supply and demand, and price elasticity.
- To deconstruct and apply the concept of price elasticity for physiotherapy services across high, upper-middle, lower-middle and low-income countries, and critique the economic trade-offs that individuals, institutions, and governments make in financial and operational decision making,
- To prioritize solutions that will move physiotherapy from elastic to inelastic markets, meaning transitioning from a service perceived as optional (elastic supply) towards one of perceived high-value necessity (inelasticity supply).
Description: In neo-classical health economics, the fluctuation of 'price' is a dynamic function of the interplay of 'supply' (services and providers that are available) and 'demand' (services and providers that individuals or governments seek). Although there is some debate, the concept of supply and demand, and how price signals the amount of demand sought, are not fully or easily transportable in all domains of health where services and products may not be regarded as market-based commodities due to factors such as information asymmetry, or under conditions when services sought have lifesaving outcomes rather than luxury consumables [1]. In the context health, Price Elasticity of Demand (PED) is an outcome used to measure responsiveness in the amount of service or product that a patient (or their intermediary) will demand after a price change [2,3]. For instance, if there is little change in demand following a price change for a service, the market is defined as 'inelastic'; however if a large change in demand results from a price change, then the market is defined as 'elastic.' While the literature is scant, health interventions such as lifesaving medical or acute hospital care are regarded to be inelastic, meaning that price fluctuation has little effect on the demand [4]. Conversely, services such as prevention, promotion, and even physiotherapy are reported to be elastic, meaning that even small changes in price can exert large changes in the amount demanded [4,5]. These concepts of elastic and inelastic financial properties of health services also apply at the level of institutions and governments as they make financing decisions of services they will fund.
In this symposium, we will explore the concepts of supply, demand and PED as it applies to physiotherapy services. Given that the context in which physiotherapy is provided differs around the world [6,7], we will have case exposés from low (Joseph CapoChiChi from Benin), lower-middle (Sidy Dieye from Senegal), upper-middle (Dr. Nihad Almasri from Jordan) and high (Melissa Locke from Australia) income countries, and across practice settings and patient demographics, in order to discuss and debate key factors that have contributed to physiotherapy's elastic market configurations. Once uncovered, factors and determinants that have led to the prevailing financial market dynamics for physiotherapy, in different settings, will be discussed and placed into the context of rapidly increasing demand for physiotherapy services [8, 9].
If we accept that physiotherapy operates mostly in 'elastic' markets, it follows that physiotherapists will continue to be vulnerable to economic changes that are well beyond its control or sphere of influence. From an advocacy and activism perspective, it may be more advantageous in the long term for physiotherapy services and providers to shift perceptions of their services from a mostly elastic market, towards one of greater inelasticity properties where price and policy changes would have lesser effects. Doing so may create greater insulation against the suppression of current and future physiotherapy financing. The key question is how to begin such a process. Given the experience of the presenters and the expertise within the audience, we will propose a series of possible solutions during the symposium and will ask the audience to add and then rank order the list of possibilities using a live online voting app using their smartphones.
In this symposium, we will explore the concepts of supply, demand and PED as it applies to physiotherapy services. Given that the context in which physiotherapy is provided differs around the world [6,7], we will have case exposés from low (Joseph CapoChiChi from Benin), lower-middle (Sidy Dieye from Senegal), upper-middle (Dr. Nihad Almasri from Jordan) and high (Melissa Locke from Australia) income countries, and across practice settings and patient demographics, in order to discuss and debate key factors that have contributed to physiotherapy's elastic market configurations. Once uncovered, factors and determinants that have led to the prevailing financial market dynamics for physiotherapy, in different settings, will be discussed and placed into the context of rapidly increasing demand for physiotherapy services [8, 9].
If we accept that physiotherapy operates mostly in 'elastic' markets, it follows that physiotherapists will continue to be vulnerable to economic changes that are well beyond its control or sphere of influence. From an advocacy and activism perspective, it may be more advantageous in the long term for physiotherapy services and providers to shift perceptions of their services from a mostly elastic market, towards one of greater inelasticity properties where price and policy changes would have lesser effects. Doing so may create greater insulation against the suppression of current and future physiotherapy financing. The key question is how to begin such a process. Given the experience of the presenters and the expertise within the audience, we will propose a series of possible solutions during the symposium and will ask the audience to add and then rank order the list of possibilities using a live online voting app using their smartphones.
Implications/conclusions: On the one hand, physiotherapy stakeholders, including clinicians, researchers, and patient advocacy groups, are increasingly clear about the value derived from effective and timely physiotherapy services. However, physiotherapy services are largely regarded as elastic from a health economic perspective and are thus more exposed to market-forces that often limit access for patients. Global estimates for demand are increasing across countries of all levels of development [10], and thus there is a need to transition the interpretation and perception of physiotherapy to inelastic markets. Without making this switch, or at the minimum moving in this direction, physiotherapy risk substitution from other services and professions that are increasingly well-positioned in the inelastic category.
References:
[1] Sommers E, Porter K. Price elasticities for three types of CAM services: Experiences of a Boston Public Health Clinic. J Altern Complement Med. 2006;12(1):85–90.
[2] Alfonso YN, Ding G, Bishai D. Income Elasticity of Vaccines Spending versus General Healthcare Spending. Health Econ. 2016;25(7):860–872.
[3] Duarte F. Price elasticity of expenditure across health care services. J Health Econ. 2012;31(6):824–841.
[4] Van Vliet RCJA. Deductibles and Health Care expenditures: Empirical Estimates of Price Sensitivity Based on Administrative Data. International Journal of Health Care Finance and Economics 2004; 4(4):283-305.
[5] Landry MD, Deber RB, Jaglal S, Laporte A, Holyoke P, Devitt R, Cott C. Assessing the consequences of delisting publiclyfunded community-based physical therapy on self-reported Health in Ontario, Canada: a prospective cohort study. International Journal of Rehabilitation Research 2006; 29(4): 303-307.
[6] Esan O. Price elasticity of demand for psychiatric consultation in a Nigerian psychiatric service. Afr Health Sci. 2016;16(4):1018–1022.
[7] Roquebert Q, Tenand M. Pay less, consume more? The price elasticity of home care for the disabled elderly in France. Health Econ. 2017;26(9):1162–1174.
[8] McClellan C, Fingar KR, Ali MM, Olesiuk WJ, Mutter R, Gibson TB. Price elasticity of demand for buprenorphine/naloxone prescriptions. Journal of Substance Abuse Treatment 2019; 106-11.
[9] Pendzialek JB, Simic D, Stock S. Differences in price elasticities of demand for health insurance: a systematic review. Eur J Health Econ. 2016;17(1):5–21.
[10] Jesus TS, Landry MD, Hoenig H. Global Need for Physical Rehabilitation: Systematic Analysis from the Global Burden of Disease Study 2017. International Journal of Environmental Research and Public Health. 2019; 16:980.
[2] Alfonso YN, Ding G, Bishai D. Income Elasticity of Vaccines Spending versus General Healthcare Spending. Health Econ. 2016;25(7):860–872.
[3] Duarte F. Price elasticity of expenditure across health care services. J Health Econ. 2012;31(6):824–841.
[4] Van Vliet RCJA. Deductibles and Health Care expenditures: Empirical Estimates of Price Sensitivity Based on Administrative Data. International Journal of Health Care Finance and Economics 2004; 4(4):283-305.
[5] Landry MD, Deber RB, Jaglal S, Laporte A, Holyoke P, Devitt R, Cott C. Assessing the consequences of delisting publiclyfunded community-based physical therapy on self-reported Health in Ontario, Canada: a prospective cohort study. International Journal of Rehabilitation Research 2006; 29(4): 303-307.
[6] Esan O. Price elasticity of demand for psychiatric consultation in a Nigerian psychiatric service. Afr Health Sci. 2016;16(4):1018–1022.
[7] Roquebert Q, Tenand M. Pay less, consume more? The price elasticity of home care for the disabled elderly in France. Health Econ. 2017;26(9):1162–1174.
[8] McClellan C, Fingar KR, Ali MM, Olesiuk WJ, Mutter R, Gibson TB. Price elasticity of demand for buprenorphine/naloxone prescriptions. Journal of Substance Abuse Treatment 2019; 106-11.
[9] Pendzialek JB, Simic D, Stock S. Differences in price elasticities of demand for health insurance: a systematic review. Eur J Health Econ. 2016;17(1):5–21.
[10] Jesus TS, Landry MD, Hoenig H. Global Need for Physical Rehabilitation: Systematic Analysis from the Global Burden of Disease Study 2017. International Journal of Environmental Research and Public Health. 2019; 16:980.
Key-words: 1. Health Economics 2. Price Elasticity 3. Decision Making
Funding acknowledgements: No Funding
All authors, affiliations and abstracts have been published as submitted.
All authors, affiliations and abstracts have been published as submitted.
