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

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.

Impoverishment and patients’ “willingness” and “ability” to pay for improving the quality of health care in Palestine: An assessment using the contingent valuation method

“…It is of utmost importance to interpret CV results with caution [46], mainly when applications are to be extended from economic calculus (a normative perspective) to attain positive economic objectives, e.g., demand assessment and price elasticity estimation [19]. Even in the normative context of CBA, it has been argued that WTP values should be weighted if patients' preferences are proven to be not equivalently distributed amongst the poor and the rich [20].…”

Impoverishment and patients’ “willingness” and “ability” to pay for improving the quality of health care in Palestine: An assessment using the contingent valuation method

“…It is of utmost importance to interpret CV results with caution [46], mainly when applications are to be extended from economic calculus (a normative perspective) to attain positive economic objectives, e.g., demand assessment and price elasticity estimation [19]. Even in the normative context of CBA, it has been argued that WTP values should be weighted if patients' preferences are proven to be not equivalently distributed amongst the poor and the rich [20].…”

Socioeconomic Inequalities in Access to Health Care: Examining the Case of Burkina Faso

“…[56][57][58][59][60] It is possible that the poor are deterred from reporting need because most health care in Burkina Faso is still based on user-fees, which have been shown to be very regressive. Even in places where insurance schemes are available, they may not be affordable for the poor.…”

Empirical Models of Demand for Out-Patient Physician Services and Their Relevance to the Assessment of Patient Payment Policies: A Critical Review of the Literature

“…In particular, monetary payments could have a less discouraging impact when they are followed by quality improvements, such as increased range of services, availability of necessary drugs, and quality of consultations [41]. Quality parameters could have an impact on price responsiveness, although authors [19,42,48] do not completely agree on the magnitude of this impact. The differences in conclusions could be attributed to diverse assumptions about quality parameters and their measurements, as well as to different attitudes within the population studied.…”

Impoverishment and patients’ “willingness” and “ability” to pay for improving the quality of health care in Palestine: An assessment using the contingent valuation method

“…It is of utmost importance to interpret CV results with caution [46], mainly when applications are to be extended from economic calculus (a normative perspective) to attain positive economic objectives, e.g., demand assessment and price elasticity estimation [19]. Even in the normative context of CBA, it has been argued that WTP values should be weighted if patients' preferences are proven to be not equivalently distributed amongst the poor and the rich [20].…”

Socioeconomic Inequalities in Access to Health Care: Examining the Case of Burkina Faso

“…[56][57][58][59][60] It is possible that the poor are deterred from reporting need because most health care in Burkina Faso is still based on user-fees, which have been shown to be very regressive. Even in places where insurance schemes are available, they may not be affordable for the poor.…”

Empirical Models of Demand for Out-Patient Physician Services and Their Relevance to the Assessment of Patient Payment Policies: A Critical Review of the Literature

“…In particular, monetary payments could have a less discouraging impact when they are followed by quality improvements, such as increased range of services, availability of necessary drugs, and quality of consultations [41]. Quality parameters could have an impact on price responsiveness, although authors [19,42,48] do not completely agree on the magnitude of this impact. The differences in conclusions could be attributed to diverse assumptions about quality parameters and their measurements, as well as to different attitudes within the population studied.…”

Impoverishment and patients’ “willingness” and “ability” to pay for improving the quality of health care in Palestine: An assessment using the contingent valuation method

“…It is of utmost importance to interpret CV results with caution [46], mainly when applications are to be extended from economic calculus (a normative perspective) to attain positive economic objectives, e.g., demand assessment and price elasticity estimation [19]. Even in the normative context of CBA, it has been argued that WTP values should be weighted if patients' preferences are proven to be not equivalently distributed amongst the poor and the rich [20].…”

Socioeconomic Inequalities in Access to Health Care: Examining the Case of Burkina Faso

“…[56][57][58][59][60] It is possible that the poor are deterred from reporting need because most health care in Burkina Faso is still based on user-fees, which have been shown to be very regressive. Even in places where insurance schemes are available, they may not be affordable for the poor.…”

Empirical Models of Demand for Out-Patient Physician Services and Their Relevance to the Assessment of Patient Payment Policies: A Critical Review of the Literature

“…In particular, monetary payments could have a less discouraging impact when they are followed by quality improvements, such as increased range of services, availability of necessary drugs, and quality of consultations [41]. Quality parameters could have an impact on price responsiveness, although authors [19,42,48] do not completely agree on the magnitude of this impact. The differences in conclusions could be attributed to diverse assumptions about quality parameters and their measurements, as well as to different attitudes within the population studied.…”