Journal Article

Demand assessment and price-elasticity estimation of quality-improved primary health care in Palestine: a contribution from the contingent valuation method

2007
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Abstract

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.

Year
2007
Language
English
Date Published
Oct
Volume
16
Pages
1051-68
Accession Number
17294496
ISBN Number
1057-9230 (Print)1057-9230 (Linking)
Journal Name
Health Econ
Keywords
Models
Econometric
Adult
Attitude of Health Personnel
Female
Health Services Accessibility
economics
Humans
Male
Middle East
Physician-Patient Relations
Primary Health Care
Quality of Health Care
Socioeconomic Factors