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Aiding priority setting in health care: is there a role for the contingent valuation method?

The paper discusses some methodological and measurement aspects with the contingent valuation (CV) method which appear to create problems when eliciting preferences for the relative social valuation of alternative health care programmes. After pointing to biases which tend to exaggerate the true valuations, emphasis is placed on framing issues when applied to health care. Thereafter the paper discusses the extent to which preferences elicited through one's willingness to pay can be used to infer how the respondent would prioritize between the health care programmes in question. New empirical evidence is presented which suggest discrepancies between a CV ranking and the ranking expressed when making a direct ordinal comparison.

Bias↗

Contingent valuation with an open-ended follow-up question: a test of scope effects.

It has been suggested that an open-ended follow-up question should be added to the binary contingent valuation question. Before this is generally recommended, it is important to evaluate the properties of such follow-up questions. Using a split sample approach, we test whether the open-ended follow-up is sensitive to the scope of the commodity being valued. No significant scope effects were detected. It is concluded that the results obtained do not support the use of an open-ended follow-up in contingent valuation applications.

Esophagitis, Peptic↗

Private sector health reform in South Africa.

This paper discusses some of the trends, debates and policy proposals in relation to the financing of the private health sector in South Africa. The public and private sectors in South Africa are of equivalent size in terms of overall expenditure, but cover substantially different population sizes. Within this context the government has reached the unavoidable conclusion that the private sector has to play some role in ensuring that equity, access and efficiency objectives are achieved for the health system as a whole. However, the private sector is some way off from taking on this responsibility. Substantial increases in per capita costs over the past 15 years, coupled with a degree of deregulation by the former government, have resulted in increasing instability and volatility. The development of a very competitive medical scheme (health insurance) market reinforced by intermediaries with commercial interests has accelerated trends toward excluding high health risks from cover. The approach taken by the government has been to define a new environment which leaves the market open for extensive competition, but removes from schemes the ability to compete by discriminating against high health risks. The only alternatives left to the private market, policy makers hope, will be to go out of business, or to survive through productivity improvements.

Costs and Cost Analysis↗

Financing health services in Poland: new evidence on private expenditures.

This paper estimates total expenditure on health care in Poland in 1994 and provides new evidence on high levels of private spending on health care. The analysis shows that health care expenditures in Poland are higher than has usually been maintained, and are comparable with the prevailing levels in many other European countries. Private expenditure on health is a significant proportion of total expenditure on health, and in particular on financing outpatient care. Available evidence indicates that informal payments made by patients to physicians contribute as much as double of the physician's salary, and thus form an important source of earnings for physicians. This situation of high private expenditures on health care and informal payments to physicians is likely to be true of other transitional economies of Central and Eastern Europe as well. One policy implication that emerges is these transitional economies face a big challenge in managing existing resources, as opposed to finding new resources, in the health sector more effectively to meet the health care needs of their population. The paper highlights the need for better understanding of the current availability and distribution of resources in the health sector and their directions of flow, in both public and private sectors, and suggests using tools such as National Health Accounts to track and monitor changes in the financing of the health care system.

Adolescent↗

The political process and the private health sector's role in Vietnam.

Vietnam has experienced a period of economic and political transition from a command economy to one of market socialism. This transition has precipitated a shift in the policies concerning the private sector, as well as increased demand for services from the private health sector. The private sector has evolved, though more rapidly in the Ho Chi Minh City area, with the passing of laws and regulations concerning private practice. The policy maker's concern is to maintain the equity gains realized under the public health system while using the private sector growth to make improvements in the system's efficiency. The political process enabling expansion of the private health sector has been slow, and will continue to be measured as it seeks to create a national health system with a rational integration of the public and private sectors.

Developing Countries↗

Local cost sharing in Bamako Initiative systems in Benin and Guinea: assuring the financial viability of primary health care.

The fourth in a series of five, this article presents and analyses data on cost recovery and community cost-sharing, two key aspects of the Bamako Initiative which have been implemented in Benin and Guinea since 1986. The data come from approximately 400 health centres and result from the six-monthly monitoring sessions conducted from 1989 to 1993. Community involvement in the financing of local operating costs in the two national scale programmes is also described. In Benin and Guinea, a user fee system generates the community financed revenue with the aim of covering local operating costs including drugs. Health worker salaries remain the responsibility of the government and donor funding covers vaccine and investment costs. Village health committees manage and control resources and revenue. The community is also involved in decision making, strategy definition and quality control. In Benin in 1993, community financing revenue amounted to about US$0.6 per capita per year and generally covered all local recurrent non salary costs except vaccines and left a surplus. Although total costs and revenues were slightly lower in Guinea for the same period, over-all user fee revenue (around US$0.3 per capita per year) covered local recurrent costs (not including salaries or vaccines). A comparison of costs and revenue between regions and individual health centres revealed important differences in cost recovery ratios. In Benin, some centres recovered more than twice the local costs targeted for community financing. Twenty-five per cent of centres in Guinea did not manage to cover their designated local recurrent costs. The longitudinal analysis showed that the level of cost recovery remained stable over time even as preventive care (and especially EPI) coverage rose significantly. To better understand the most important characteristics affecting cost recovery levels, best performing health centres in terms of cost-recovery levels in 1993 were compared to worst performing centres. This analysis showed that the size of the target population of the health centre is a key determinant of cost-recovery in both countries. In addition, in Guinea the utilization of curative care linked to geographical access and in Benin the average revenue per case linked to the number of deliveries proved to be additional factors of importance. In best performing centres, financial viability improved over time in both countries between 1990 and 1993. Finally, the implications of these conclusions for the planning of health centre revitalization in West Africa are discussed.

Benin↗

Willingness to pay for rural health insurance through community participation in India.

The main objective of this article is to examine the willingness to pay for a viable rural health insurance scheme through community participation in India, and the policy concerns it engenders. The willingness to pay for a rural health insurance scheme through community participation is estimated through a contingent valuation approach (logit model), by using the rural household survey on health from Karnataka State in India. The results show that insurance/saving schemes are popular in rural areas. In fact, people have relatively good knowledge of insurance schemes (especially life insurance) rather than saving schemes. Most of the people stated they are willing to join and pay for the proposed rural health insurance scheme. However, the probability of willingness to join was found to be greater than the probability of willingness to pay. Indeed, socio-economic factors and physical accessibility to quality health services appeared to be significant determinants of willingness to join and pay for such a scheme. The main justification for the willingness to pay for a proposed rural health insurance scheme are attributed from household survey results: (a) the existing government health care provider's services is not quality oriented; (b) is not easily accessible; and, (c) is not cost effective. The discussion suggests that policy makers in India should take serious note of the growing influence of the private sector and people's willingness to pay for organizing a rural health insurance scheme to provide quality and efficient health care in India. Policy interventions in health should not ignore private sector existence and people's willingness to pay for such a scheme and these two factors should be explicitly involved in the health management process. It is also argued that regulatory and supportive policy interventions are inevitable to promote this sector's viable and appropriate development in organizing a health insurance scheme.

Attitude to Health↗

Redistributive effects of Swedish health care finance.

This paper investigates the redistributive effects of the Swedish health care financing system in 1980 and 1990 for four different financial sources: county council taxes, payroll taxes, direct payments and state grants. The redistributive effects are decomposed into vertical, horizontal and 'reranking' segments for each of the four financial sources. The data used are based on probability samples of the Swedish population, from the Level of Living Survey (LNU) from 1981 and 1991. The paper concludes that the Swedish health care financing system is weakly progressive, although direct payments are regressive. There is some horizontal inequity and 'reranking', which mainly comes from the county council taxes, since those tax rates vary for each county council. The implication is that, to some extent, people with equal incomes are treated unequally.

Financial Management↗

A description of outpatient drug use in rural China: evidence of differences due to insurance coverage.

This paper describes the effects of health financing systems (insurance) on outpatient drug use in rural China. 1320 outpatients were interviewed (exit interview) in the randomly selected county, township and village health care facilities in five counties in three provinces of central China. The interview was face to face. Questions were asked by a trained interviewer and were answered by patient him/herself. The main finding was that health insurance appeared to influence drug use in outpatient services. The average number of drugs per visit was 2.56 and drug expenditures per visit was 16.9 yuan. Between insured and uninsured (out-of-pocket) groups, there were significant differences in the number of drugs and drug expenditures per visit. The insured had a lower number of drugs and a higher drug expenditure per visit than the uninsured, implying the use of more expensive drugs per visit than the uninsured. There were also significant differences in the number of drugs and drug expenditures per visit between the types of insurance. One third of the drugs were anti-infectives, most of which were penicillin, gentamycin, and sulfonamides. The results imply that uninsured patients do not receive the same care as the insured do even if they have the same needs. The fee-for-service financing for hospitals and health insurance have changed health providers' and consumers' behaviour and resulted in the increase of medical expenditure.

China↗

Indigence and access to health care in sub-Saharan Africa.

Access to health care services for the poor and indigent is hampered by current policies of health care financing in sub-Saharan Africa. This paper reviews the issue as it is discussed in the international literature. No real strategies seem to exist for covering the health care of the indigent. Frequently, definitions of poverty and indigence are imprecise, the assessment of indigence is difficult for conceptual and technical reasons, and, therefore, the actual extent of indigence in Africa is not well known. Explicit policies rarely exist, and systematic evaluation of experiences is scarce. Results in terms of adequately identifying the indigent, and of mechanisms to improve indigents' access to health care, are rather deceiving. Policies to reduce poverty, and improve indigents' access to health care, seem to pursue strategies of depoliticizing the issue of social injustice and inequities. The problem is treated in a 'technical' manner, identifying and implementing 'operational' measures of social assistance. This approach, however, cannot resolve the problem of social exclusion, and, consequently, the problem of excluding large parts of African populations from modern health care. Therefore, this approach has to be integrated into a more 'political' approach which is interested in the process of impoverishment, and which addresses the macro-economic and social causes of poverty and inequity.

Africa South of the Sahara↗

Why the poor pay more: household curative expenditures in rural Sierra Leone.

This paper draws on data from Sierra Leone, and secondary data from elsewhere, to show that the rural poor can be disproportionately disadvantaged by user charges for health care, paying a higher percentage of their incomes for health care than wealthier households. Cost sharing systems at primary care level should include exemptions for the poor, but rarely succeed in consistently protecting them. The regressivity of health expenditures also results from lack of protection from the higher costs of less-frequently used, expensive providers. In Sierra Leone, the burden of curative treatment costs for all groups came mainly from private and NGO providers. Proximity to facilities appeared a more important factor in their use than average price levels. Even if a perfect exemption system existed at government primary care facilities, it would not have had much overall effect because of their relatively small contribution to household health expenditures. The financial burden on households could be relieved by making basic health facilities more accessible and at hospital level using additional resources generated through improved efficiency and cross-subsidization to provide exemptions. Also, pricing policy should take into account local economic conditions. Insurance/prepayment schemes covering the cost of hospitalization would come closer to an ideal solution, but have been implemented in very few of the poorer countries.

Cost Sharing↗

Household health expenditures in Morocco: implications for health care reform.

The purpose of this study was to investigate the level and distribution of household health care expenditures in Morocco, and to compare the level of health care funds provided by households with the levels provided by the government and international donors. In addition, the reliance of poor and non-poor households on both public and private providers was investigated. The study was based on data collected in the 1995 Demographic and Health Survey, which included a special supplement on health care expenditures. Descriptive statistics are presented on utilization of out-of-pocket expenditures for antenatal and obstetric care, chronic care, and non-chronic care associated with illness and injury, by urban/rural status and by socio-economic status. The results indicate that government health care providers are an important source of modern health care not only for poor households, but for better-off households as well. While individuals who use private health care providers incur substantially higher costs than those who use public providers, an unexpected finding of the study is the degree to which public clients pay for health care services, despite the fact that public care is nominally priced in Morocco. We conclude by discussing the implications of our results on the design and implementation of health care reform policies.

Child↗

Childhood cancer: nonmedical costs of the illness.

The financial burden of cancer treatment is a major source of anxiety for the families of pediatric cancer patients. Parents of these patients report that nonmedical, out-of-pocket expenditures are the most troublesome because, unlike medical bills, nonmedical costs must be paid immediately and are rarely reimbursed. Data on nonmedical expenditures (transportation, food, lodging, clothing, family care, and miscellaneous) were collected from 70 patients' families for one-week periods at three-month intervals. Multiple regression analysis was carried out to ascertain the factors influencing costs. Factors contributing to nonmedical costs included level of care, the patient's Performance Status, distance from the treatment center, and family size. Thirty-two families reported loss of pay when one or both parents accompanied the child to the hospital. When this loss was combined with the nonmedical costs, the results indicated a serious strain on the family budget. For half the families surveyed, the total expenses plus loss of pay amounted to more than 25% of the weekly family income.

Adolescent↗

Resources available to the family of the child with cancer.

Progressive and continuing advances in the care of the child with cancer have resulted in potential cure of over 50% of our children. However, no matter how encouraging these statistics, nearly one half of our children now die from their disease. To bring the family through the cancer experience, we must meet the challenge of attending to their practical, spiritual, emotional and experiential requirement from diagnosis, treatment through possible relapse, death, hoped for cure, and survival as an adult with the stigmata of a history of cancer as an obstacle to jobs, insurance, and productive lives, and the further shadow of a possible late second cancer caused by their curative treatment. Families require access to a firm, unfragmented foundation of support, incorporating a multidisciplinary network of resources, involving the combined efforts of the primary health care team and the family's community. Medical and emotional counseling, peer support, spiritual guidance, and special community services contribute to the optimal care of both patient and family. In addition, legal advisory assistance and help with financial planning are important ingredients in assisting families.

Adaptation, Psychological↗

Predictors of psychotherapy outcome for children at a community mental health center.

This study assessed the utility of multiple predictors of outcome for 268 child clients and their families who received psychotherapy at a community mental health center for children. Outcome was measured by the number of therapy sessions attended, the length of therapy, and improvement ratings of the child and family made by independent judges. Regression analyses revealed that the strongest predictors of outcome were previous exposure to therapy, therapist type (permanent professional staff vs. intern), family constellation, therapist experience, and referral source. Implications for treatment planning and future research are discussed.

Child↗

Mother's willingness to pay for her own and her child's health: a contingent valuation study in Taiwan.

We use the contingent valuation (CV) method to estimate mothers' willingness to pay (WTP) to protect themselves and their children from suffering a minor illness-a cold-in Taiwan. WTP is specified as a hedonic function of the duration and severity of the cold (measured alternatively by symptoms experienced and the Quality of Well-Being (QWB) index) and of respondents' socioeconomic characteristics. The average mother is willing to pay more to protect her child than herself from suffering a cold. Median WTP to avoid the average mother's and child's colds are US$37 and US$57, respectively. Adjusting for the greater duration and severity of the average mother's cold suggests that WTP to prevent comparable illnesses is approximately twice as large for the child as for the mother. We also find that mother's WTP is about 20% greater to prevent a son's than a daughter's illness.

Adult↗

A multilevel modelling approach to analysis of patient costs under managed care.

The growth of the managed care model of health care delivery in the USA has led to broadened interest in the performance of health care providers. This paper uses multilevel modelling to analyse the effects of managed care penetration on patient level costs for a sample of 24 medical centres operated by the Veterans Health Administration (VHA). The appropriateness of a two level approach to this problem over ordinary least squares (OLS) is demonstrated. Results indicate a modicum of difference in institutions' performance after controlling for patient effects. Facilities more heavily penetrated by the managed care model may be more effective at controlling costs of their sicker patients.

Cost Sharing↗