TitleDemand assessment and price-elasticity estimation of quality-improved primary health care in Palestine: a contribution from the contingent valuation method
Publication TypeJournal Article
Year of Publication2007
AuthorsMataria, A, Luchini, S, Daoud, Y, Moatti, JP
JournalHealth Econ
Date PublishedOct
ISBN Number1057-9230 (Print)<br/>1057-9230 (Linking)
Accession Number17294496
Keywords*Models, Econometric, Adult, Attitude of Health Personnel, Female, Health Services Accessibility/economics, Humans, Male, Middle East, Physician-Patient Relations, Primary Health Care/*economics, Quality of Health Care/*economics, Socioeconomic Factors

This paper proposes a new methodology to assess demand and price-elasticity for health care, based on patients' stated willingness to pay (WTP) values for certain aspects of health care quality improvements. A conceptual analysis of how respondents consider contingent valuation (CV) questions allowed us to specify a probability density function of stated WTP values, and consequently, to model a demand function for quality-improved health care, using a parametric survival approach. The model was empirically estimated using a CV study intended to assess patients' values for improving the quality of primary health care (PHC) services in Palestine. A random sample of 499 individuals was interviewed following medical consultation in four PHC centers. Quality was assessed using a multi-attribute approach; and respondents valued seven specific quality improvements using a decomposed valuation scenario and a payment card elicitation technique. Our results suggest an inelastic demand at low user fees levels, and when the price-increase is accompanied with substantial quality-improvements. Nevertheless, demand becomes more and more elastic if user fees continue to rise. On the other hand, patients' reactions to price-increase turn out to depend on their level of income. Our results can be used to design successful health care financing strategies that include a consideration of patients' preferences and financial capacities.