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

By Ricardo A. Bitran

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For example, to compute monthly nurse costs associated with deliveries, the model proceeds as follows. First, it computes the daily demand for deliveries. Second, based on the amount of time spent by a nurse per delivery, it computes the total number of nurse-minutes required daily to satisfy demand. Third, based on the number of hours worked daily by a nurse, it computes the number of nurses required daily to satisfy demand. 4 nurses are required the model assumes that 5 nurses are needed). Finally, by multiplying the results times the monthly salary of a nurse, the model obtains the monthly nurse labor costs for deliveries.

Page 6 The model's main relationship can thus be represented through the following reduced-form expression: or Expression 2-4 allows one to understand the main forces underlying the model. The next section is a discussion of possible pricing strategies for the focus health facility; it is followed by a discussion about strategies for and feasibility of breaking-even. The next section comments on the size of the facility's loss, if any, and external subsidization; we then briefly discuss the model's comparative statics.

The complete menu structures of the health center and hospital components of the model can be found in Appendix C. The full set of tables contained in the health center component can be found in Appendix D, and the hospital components of the model are contained in Appendix E. Finally, a user's manual for the model is in Appendix F. 2) of the health center's reduced menu. 2 follows exhibit 4-1. Simulations The Base Scenario Exhibit 4-1 constitutes the base scenario. 1, the base consists of a market of 10,000 people, with 60 percent living within 2 kilometers of the health center.

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