ABSTRACT
This chapter is based upon a speech delivered before a conference on "The Planning Process: Physician-Consumer Involvement" sponsored by the California Medical Education and Research Foundation, San Francisco, California, July 18-20, 1968. Historically, medical services generally have been produced in a relatively small scale of medical practice or, one could say, a medical firm, to make the business analogy even stronger. The demand for medical services intended to alleviate acute problems that are not life-threatening has been growing rapidly as the result of numerous factors. The effect of income on the demand for medical services to treat serious illnesses falls along a spectrum ranging from high to low. Market transactions are also inadequate for the purchase of police and fire protection and a number of other goods or services. Government acts as a major consumer in the sense that it specifically purchases services for some population groups under both Medicare and Medicaid legislation.
