Price Elasticity in Healthcare Services

Price elasticity in healthcare services measures how sensitive patients are to changes in the cost of care. If a service is price elastic, a small increase in price could significantly reduce the number of patients seeking that service. Conversely, if it is price inelastic, patients will still seek care despite price increases, often because the service is essential, like emergency care or life-saving treatments. Understanding price elasticity helps healthcare providers and policymakers make informed decisions about pricing, access, and resource allocation to ensure that necessary services remain available and affordable for patients.