Quality and cost in health care choice in developing countries.

Lavy V; Germain JM
Washington, D.C., World Bank, 1994. xi, 33, [1] p. (LSMS. Living Standards Measurement Study Working Paper No. 105)

Data from the Ghana 1988-89 Living Standard Survey on 6000 individuals from 88 clusters (2150 with an illness or injury) and a 1989 health facility survey were used to model, theoretically and empirically, the effect of quality of health care on demand and choice of treatment. The simultaneous influence of travel costs and user fees and quality of options on the choice between health care options was examined. Variables were access to health care (distance), price of health care, quality, and the level of schooling of heads of households. The estimated model was used to simulate the impact on health choices and demand when improving quality of drugs and service availability, qualified personnel, adequate equipment, and reduced distance, and increased or decreased user fees. Calculations were also made for the amount households were willing to pay for improvements in accessibility and quality of public health services. The demand model used a more general function and treated cost of time in travel and waiting for treatment as facility-fixed effects. Decisions about choice of health care or whether to seek medical care were based on maximizing utility. A discrete choice model for choice of provider was chosen. The conditional utility function, health production function, and distributions of stochastic variables were specified, and the probability was derived for choosing a given alternative, which was then used to estimate the utility function through a maximum likelihood procedure. Variables included availability of specific drugs, number of doctors and nurses, medical facility with electricity and running water, availability of immunization and other services, an operating room, distance of facility, visit cost, government employment of the head of household, income, years of schooling, gender, head of household's schooling. Results were discussed according to estimation results, the probability of using health care under different policies, and willingness to pay. Distance was an important deterring factor in seeking modern health care, and prices were less important. Demand for health care was affected more strongly by improved basic services than by facility infrastructure. Almost 1% of monthly income would be paid for improvements in drug/service availability, but payment would be higher for improved access.

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