Healthcare Marketplace Two 1

Healthcare Marketplace Two

The best solution to this problem is by inducing demand for the 40 empty beds. Inducing demand means finding ways in which more veterans can be able to occupy these beds even though they might not be in dire need of them, as our facility will benefit more and the more the beds occupied the higher the rate of cost sharing (Feldstein, 2003). This might mean that we provide recommendations to the veterans, which they would not choose if they had the same knowledge and information that we have. This can be done by the physicians as the veterans put their trust in their diagnosis and most of the times do not question treatment options. At the end of the day as studies show, that it does not mean  we will give them inferior services but it means that we will be able to minimize the costs facing us and end up getting some profits. We are not going to compromise the dignity of our facility through this though, so it means that we have to provide exceptional treatment and services to the veterans as they have served this country well for a long time.

I came up with different ways in which we can initiate the demand inducement and this does not mean you do not have a say in it, I am just presenting them to you for you to have time to analyze, then you can put fourth your recommendations and we can review them before implementing them. The first incentive is by increasing the physician density (Phelps, 1992). You might ask how that is going to help.  When the number of physicians is high then it means there is a threat to their pay especially if they are on contract basis thus they will come up with ways of increasing demand for our services. This will enable to increase the number of beds occupied in our facility thus this increases the revenue we get therefore helping to reduce the costs of maintaining beds that are not occupied. The physicians will be happy because there is no cut in their pay and the facility will also benefit and the veterans occupying those beds will also be able to get high-class treatment and all will be happy.

The second incentive is in the form of providing price incentives to the veterans (Scheffler, 1984). This can be done in such a way that if a person has been admitted in the facility and is occupying a bed, they will be able to access all our services and medication at a subsidized rate. For example if the cost of medicine is, 100% if you are an outpatient then it means that if you are admitted in the facility you will get the same medication at the rate of 70% that is 30%less than if you were not admitted (Scheffler, 1984). This will attract many veterans to occupy the beds and our objective of increasing the bed occupation capacity will be met at a lower cost. We might have to loose a little where the price of medication is concerned, but when we look at the bigger picture we will still gain a lot because there will be other costs on the veteran who is occupying the bed so he will end up paying more than he thought. Our facility will t gain more revenue thus we will be able to cut on our expenses  reducing our costs as compared to the profits leading to, no need for outside help in finances.

The third incentive is by the recommendation of more visits to the hospital as opposed to fewer ones if the veteran is admitted in the facility (Feldstein, 2003). This is where the physicians will ensure that the type of treatment they provide to the veterans will involve a high number of visits to the hospital if they are not admitted. The alternative option to this is being admitted meaning that the veteran will be able to be seen by the doctor at any time thus cutting on his transport costs, physician fees and costs for medication that he needs every time. The veteran will prefer the second option thus this will help the facility be able to fill in the beds that were empty leading to ensuring high level of cost sharing thus helping to cut on both direct and indirect costs facing the facility. When the bed capacity is full then we can be able to concentrate on other ways that we can use to cut costs  for example there may be some equipment that if we get rid of might help us cut the cost of maintaining and the proceeds from the sale will  increase our revenue base.

The third incentive is by provision of personalized care for those admitted (Phelps, 1992). If a veteran is admitted, he will be able to  have access to a personal nurse who will be there at call to take care of all his personal needs thus he wont have to always wait to be attended to. They will have access to their own personal doctors who will not be changed all the time thus the person feels he is getting personalized care. As opposed to those who come to the facility daily who will have to queue to access the same services that will only be able to see the doctor who is in call who might not be the same doctor that they saw previously thus they might not be able to have the feeling of getting personalized care. The veterans will end up asking to be admitted because they will feel that they are getting maximum satisfaction for the services they are paying for. Thus, our bed capacity-filling objective will be achieved (Phelps, 1992).

The fourth incentive is by improving the quality of treatment (Feldstein, 2003). The level of treatment for those admitted will be higher than for those who are not; this is where those occupying the beds will have access to different types of medications as opposed to the others not occupying the beds. For example, the ones occupying the beds will be able to have access to the right diet to compliment their medication they can be able to have access to new medication immediately it is accessible in the market. They can be able to access better exercising facilities in the facility, as at times, what they need is a good diet exercise and a bit of medication. Those who come and leave may not be able to access all those facilities thus the will be attracted to occupying the beds to get maximum treatment. This will enable the facility to reduce their costs of paying many staff that are taking care of very few people whose services are not being fully exploited.

The fifth incentive as studies show is by encouraging the veterans that if they are in admitted they would be able to have the company of other veterans because when they are at home they might feel neglected (Feldstein, 2003). As the highest part of the active population is so busy looking for ways to sustain themselves some end up working two or more jobs, thus they do not have the time to take care of the elderly. The veterans may not have any one to talk to and thus end up being depressed and feeling as a burden and feel there is no need to continue living thus contemplating suicide. If they are admitted, they will have other veterans to talk to reducing loneliness and encouraging a happy and contented life. This will enable to fill in the empty beds in the facility thus reducing the chances of the closure of the facility ensuring our job security because otherwise it would have led to job loss for all of us (Phelps, 1992).

The sixth incentive is by ensuring that the veterans who are occupying the beds are involved in activities that will ensure they are able to do something back for the community even though their service days are over (Phelps, 1992). They can visit other hospitals together to interact with the other patients, they can visit children’s homes and be able to interact with the small children this will ensure that they feel worthy though they cannot be able to serve their country as they used to in their youth. We cannot be able to round up other veterans from different places to involve them in such activities thus they will feel discarded because they are of no use anymore. This will encourage the veterans to come to occupy the beds in the facility because they have more benefits as compared to the costs.  As a facility, we will gain bountifully from this, as this will enable us to cut costs, as this will balance the forces of demand and supply thus we will be able to attain the market equilibrium.

These incentives might have some effects in the end but if we manage the well, the effects can be counteracted. The common effects that may come from these incentives might be guilt, this is where we will feel that we have cheated the veterans to ensure that they occupy the beds but  we can deal with it by ensuring that we provide the best treatment they have ever been given thus they will get maximum satisfaction from our services. Sometimes we might get negative responses from the veterans who feel we are not giving them quality treatment; we just want to benefit from them especially those who have a medical background. The best way to counteract this is by relaying to them the superior benefits they will get from the facility which are more than the costs and ensuring they understand the benefits fully this will minimize the resistance (Scheffler, 1984). We might loose some of the veterans to incitement by others not in the program but we should work harder to gain more veterans to occupy the vacant beds.

We might get outside scrutiny on the ways that we are using to ensure fully capacity of vacant beds, but what we can do is ensuring that all the benefits that the veterans are assured as they occupy the beds are well met at all times. All the incentives above are subject to review that is why I compiled them for you first so that you can have my full recommendation in this case, but it does not mean that if you have your own incentives you cannot add. If you feel that there is an incentive listed above that may not work to our advantage you are free to critic it based on your study and knowledge then come up with a better incentive that will ensure we get maximum advantage. Some may not understand how some of the incentives work, you are free  to ask questions or  confer with each other and if you still cant understand then come to me and ask and you will get the explanation to the best of my knowledge.






Feldstein, P.J. (2003). Health policy issues: an economic perspective Charlottesville, VA:  Health Administration Press Original from the University of Virginia.

Phelps, C.E. (1992). Health economics London, UK: HarperCollins Publishers

Scheffler, R.M. (1984). Advances in Health Economics and Health Services Research Surrey, UK: Elsevier Science Ltd.


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