**2.3 Derived demand for healthcare**

Grossman used human capital theory to explain the demand for healthcare. According to human capital theory, people invest in themselves through education and health to increase their income. Grossman proposed an approach in which many important aspects of the demand for health services differ from the traditional demand approach:


*Demand for Health and Healthcare DOI: http://dx.doi.org/10.5772/intechopen.98915*

**Figure 3.** *Investing in health.*

health capital, using different amounts of time or health goods and services. **Figure 3** shows how the ultimate goal of "healthy days" guides consumer decisions about the amount, time, and cost of investing in health storage. We will see that the prices of healthcare, the rate of wages of individuals, and their productivity in the production of health determine how resources are allocated between health capital and other goods and services that people buy. Consider a consumer who buys market inputs (e.g., medical care, food, clothing) and combines them with his or her own time to generate a health capital reserve that increases his or her utility [2].
