Trade-offs between access and quality in healthcare: Evidence from retail clinics in Mexico

In settings with inefficient public provision, expansions in low-cost private-market healthcare delivery may be welfare-improving by increasing access, but may be sacrificing on quality. I study the introduction of retail clinics at private pharmacies in Mexico. I find that entry led to large declines in public-sector emergency room visits and a small but significant reduction in public clinic visits for relatively mild respiratory infections. I also find a significant increase in public clinic visits for chronic conditions and a slight decline in emergency room visits, consistent with better disease management. However, I estimate a sizable association between retail clinics and a shift toward stronger antibiotics in private-market sales. Hence, although retail clinics improve access to healthcare, they may be overselling their patients.