Modelling supply, demand and need: a literature review

Modelling supply, demand and need: a literature review

This is a short review of the literature available on factors to consider when designing a model. It aims to support the modelling process used by the CfWI and its Robust Workforce Planning Framework.

Through an extensive review of the literature, the CfWI reached the following conclusions:

  1. Needs are considered to drive demand but health services utilisation is equal to demand realised.
  2. Needs are strongly influenced by diverse set of factors which are broadly accepted even though there are still controversies about the results.
  3. From personal health needs, there are other conditions that make the demand realised: enablers. Thus, the existence of heavy tails with many zeros and service utilisation concentrated in a small set of the population makes it difficult to model behaviour from a general population perspective. However, this problem can be solved through modelling population or chronic disease segments.
  4. Supply is an endogenous factor in healthcare but it has not been adequately computed yet.
  5. Only the area of operational research (OR) can separate need/demand from supply.
  6. The implications for not meeting demand/need are computed in different terms depending on the field: waiting lists or time (for OR) or mortality rate (for health policy and economics).
  7. Models in health economics or health policy don’t make endogenous the effect of reducing demand by poor outcome, e.g. waiting lists, but they acknowledge it may exist and influence.
  8. The effect between service effectiveness, e.g. how good is the service, and additional service demand conditional to non-need enablers, e.g. education and income, is discussed in health economics. Some results from cross-sectional data show there is an impact on demand from how individuals are satisfied with current service utilisation.


The findings of the literature review are being applied to the demand and supply models that the CfWI is using for its ongoing projects across the organisation.

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