Demand-based models and market failure in health care: projecting shortages and surpluses in doctors and nurses

Models for projecting the demand for and supply of health care workers are generally based on objectives of meeting demands for health care and assumptions of status quo in all but the demographic characteristics of populations. These models fail to recognise that public intervention in health care systems arises from market failure in health care and the absence of an independent demand for health care. Hence projections of demand perpetuate inefficiencies in the form of overutilisation of services on the one hand and unmet needs for care on the other. In this paper the problems with basing workforce policy on projected demand are identified and the consequences for health care system sustainability explored. Integrated needs-based models are offered as alternative approaches that relate directly to the goals of publicly funded health care systems and represent an important element of promoting sustainability in those systems.