Supplier-induced demand is created by:

Patients are the consumers of healthcare services and cannot induce their own demand in the supplier-induced sense; they rely on providers for clinical guidance and lack the information to generate artificial demand themselves.

Supplier-induced demand is a phenomenon rooted in the principal-agent problem within healthcare, where the provider (agent) possesses significantly more clinical knowledge than the patient (principal). This information asymmetry allows providers to recommend additional tests, procedures, or visits that may not be medically necessary, effectively creating demand that would not exist if the patient were fully informed - making providers the source of induced demand.

Health insurance companies may influence utilization through coverage structures, but supplier-induced demand specifically refers to provider behavior in exploiting information asymmetry with patients, not insurer behavior.

The government can influence healthcare demand through policy and coverage mandates, but supplier-induced demand is a microeconomic concept specifically describing provider-patient information asymmetry, not government-driven demand.