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

✍ Scribed by Awad Mataria; Stéphane Luchini; Yousef Daoud; Jean-Paul Moatti

• Publisher: John Wiley and Sons
• Year: 2007
• Tongue: English
• Weight: 206 KB
• Volume: 16
• Category: Article
• ISSN: 1057-9230
• DOI: 10.1002/hec.1216

✦ Synopsis

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. Copyright © 2007 John Wiley & Sons, Ltd.