What does "elasticity" measure in healthcare services?

Elasticity in healthcare services specifically measures how sensitive the demand for a particular service is to changes in price. When the price of healthcare services rises or falls, elasticity helps determine whether the quantity demanded will increase or decrease as a result. If demand is elastic, significant price changes will lead to proportionally larger changes in the quantity demanded. Conversely, if demand is inelastic, changes in price will result in smaller changes in demand. Understanding elasticity is crucial for policymakers and healthcare providers as it influences pricing strategies, insurance coverage decisions, and overall accessibility of healthcare services.