Income Elasticity for Medical Care Services: An Empirical Study in Thailand
DOI:
https://doi.org/10.14456/tresp.2016.5Keywords:
Income elasticity of demand, outpatient, inpatient, health insurance, ThailandAbstract
The objective of this paper is to investigate the potential household income effect on public and private health care choices for outpatient and inpatient services. A multinomial logit model on choice of health care services is estimated using the Health and Welfare Survey 2006 data from Thailand with information on the number of hospitals and doctors in each province. The results indicate that an increase in monthly household income has an impact on the likelihood of healthcare utilization. Income elasticity for outpatient services is approximately 0.17 and 0.21 at clinics and private hospitals respectively. Income elasticity for inpatient services is approximately 0.10 at public provincial hospitals and 0.25 at private hospitals. The positive income elasticity indicates that services at these healthcare providers are a necessity. In contrast, income elasticity is approximately -0.13 and -0.20 for outpatient and inpatient services at public district hospitals. This suggests that district hospitals may be an inferior good. This implies that patients from wealthier families are more likely to visit private hospitals or public provincial hospitals. The Universal Coverage or Gold Card beneficiaries show a positive statistically significant probability of visiting public district hospitals for outpatient and inpatient services. From the policy perspective, Universal Coverage or Gold Card plan should be designed for segments of population below a certain income level. The government can use funds that made available by the decreased number of Universal Coverage or Gold Card beneficiaries to raise the capitation rate or hire additional medical staff at district hospitals.
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