Household Responses to Public Health Services: Cost and Quality Tradeoffs

The effectiveness of government investments in health care depends on the public's response to price and quality as well as on whether these expenditures actually improve health outcomes. Consumers, even those in low-income households, are willing to pay fees for better health care if the fees translate into improved access and reliability. But when prices rise without a concomitant improvement in services, malnutrition and child mortality rates increase. The availability of basic health care has a relatively greater impact on households with low incomes or low education, or both, than does the provision of more specialized services. This article describes the types of services for which households indicate they are willing to pay increased fees. It also indicates the potential gains from improving these services, as well as the consequences of moving faster on cost recovery than on providing improved or better-targeted services. Copyright 1996 by Oxford University Press.