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Paying informally in the Albanian health care sector: a two-tiered stochastic frontier model

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  • Sonila Tomini

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  • Wim Groot
  • Milena Pavlova

Abstract

Informal payments are deeply ingrained in the health care sector of most Central, Eastern and Southern European countries. Evidence suggests that the price paid informally to medical staff is negotiated either directly or indirectly between patients and medical staff. The aim of this paper is to measure the imperfect information that exists on the amount that has to be paid informally to medical staff. We measure the extent to which patients pay more than the amount medical staff expect informally and the extent to which medical staff request less than patients are willing to pay informally. A two-tiered stochastic frontier model is developed to estimate indicators of patients’ and medical staff’s imperfect information on informal payments and the effects on the amount the other party is minimally expecting or maximally willing to pay informally. The estimates are based on informal payments to medical staff in the inpatient health care sector in Albania. We use data from the Albania Living Standards Measurement Survey 2002 and 2005. The pooled samples include 707 individuals who have visited inpatient health care services in these 2 years. Our results show that medical staff has less information on the patients’ maximum willingness to pay informally than patients have on medical staff’s minimum expected amount. These estimates do not depend on categories of illnesses but on certain socio-demographic characteristics. Copyright The Author(s) 2012

Suggested Citation

  • Sonila Tomini & Wim Groot & Milena Pavlova, 2012. "Paying informally in the Albanian health care sector: a two-tiered stochastic frontier model," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(6), pages 777-788, December.
  • Handle: RePEc:spr:eujhec:v:13:y:2012:i:6:p:777-788
    DOI: 10.1007/s10198-011-0331-1
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    References listed on IDEAS

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    1. Vian, Taryn & Grybosk, Kristina & Sinoimeri, Zamira & Hall, Rachel, 2006. "Informal payments in government health facilities in Albania: Results of a qualitative study," Social Science & Medicine, Elsevier, vol. 62(4), pages 877-887, February.
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    4. Balabanova, Dina & McKee, Martin, 2002. "Understanding informal payments for health care: the example of Bulgaria," Health Policy, Elsevier, vol. 62(3), pages 243-273, December.
    5. Groot, W. & Oosterbeek, H., 1995. "Stochastic reservation and offer wages," Labour Economics, Elsevier, vol. 2(1), pages 107-107, March.
    6. Robin Thompson & Ana Xavier, 2002. "Unofficial Payments for Acute State Hospital Care In Kazakhstan. A Model of Physician Behaviour with Price Discrimination and Vertical Service Differentiation," LICOS Discussion Papers 12402, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    7. Ensor, Tim, 2004. "Informal payments for health care in transition economies," Social Science & Medicine, Elsevier, vol. 58(2), pages 237-246, January.
    8. Pavlova, Milena & Groot, Wim & van Merode, Godefridus, 2002. "Public attitudes towards patient payments in Bulgarian public health care sector: results of a household survey," Health Policy, Elsevier, vol. 59(1), pages 1-24, January.
    9. Polachek, Solomon W & Yoon, Bong Joon, 1987. "A Two-tiered Earnings Frontier Estimation of Employer and Employee Information in the Labor Market," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 296-302, May.
    10. Gaal, Peter & McKee, Martin, 2005. "Fee-for-service or donation? Hungarian perspectives on informal payment for health care," Social Science & Medicine, Elsevier, vol. 60(7), pages 1445-1457, April.
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    Citations

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    Cited by:

    1. Hyacinthe Tchewonpi Kankeu & Sylvie Boyer & Raoul Fodjo Toukam & Mohammad Abu-Zaineh, 2016. "How do supply-side factors influence informal payments for healthcare? The case of HIV patients in Cameroon," International Journal of Health Planning and Management, Wiley Blackwell, vol. 31(1), pages 41-57, January.
    2. Christopher F. Parmeter, 2018. "Estimation of the two-tiered stochastic frontier model with the scaling property," Journal of Productivity Analysis, Springer, vol. 49(1), pages 37-47, February.
    3. Arsenijevic, Jelena & Pavlova, Milena & Groot, Wim, 2015. "Out-of-pocket payments for health care in Serbia," Health Policy, Elsevier, vol. 119(10), pages 1366-1374.
    4. Alecos Papadopoulos, 2015. "The half-normal specification for the two-tier stochastic frontier model," Journal of Productivity Analysis, Springer, vol. 43(2), pages 225-230, April.
    5. Petra Baji & Milena Pavlova & László Gulácsi & Miklós Farkas & Wim Groot, 2014. "The link between past informal payments and willingness of the Hungarian population to pay formal fees for health care services: results from a contingent valuation study," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(8), pages 853-867, November.
    6. repec:pal:easeco:v:43:y:2017:i:3:d:10.1057_s41302-017-0096-z is not listed on IDEAS
    7. German Blanco, 2017. "Who benefits from job placement services? A two-sided analysis," Journal of Productivity Analysis, Springer, vol. 47(1), pages 33-47, February.
    8. repec:eee:hepoli:v:121:y:2017:i:10:p:1053-1062 is not listed on IDEAS
    9. Colin WILLIAMS & Ioana HORODNIC & Adrian HORODNIC, 2016. "Who is making informal payments for public healthcare in East-Central Europe? An evaluation of socio-economic and spatial variations," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 7, pages 49-61, June.

    More about this item

    Keywords

    Informal payments; Imperfect information; Stochastic model; Maximum willingness to pay informally; I11; I19; D82;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I19 - Health, Education, and Welfare - - Health - - - Other
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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