Healthcare Costs, Choice of Providers and Patient Satisfaction: Survey Evidence from India

In this paper, we study the factors that influence the choice of healthcare providers in the rural areas of a highly developed Indian state, Punjab. In particular, we examine the choice between government and private providers, and between medical professionals and informal providers. We also examine the joint choice of provider type and distance travelled, and possible factors influencing reported satisfaction with the quality of care received. We use data from a household survey of 489 households from 10 villages around the town of Nabha. We construct a measure of anticipated treatment cost in order to account for the endogeneity of actual costs in healthcare choices. Our results indicate that respondents who identified costs as a primary factor in their choice of provider were more likely to choose a nearby government provider and less likely to choose a distant private provider. Additionally, higher anticipated treatment costs were associated with a greater likelihood of choosing a government provider compared to a private provider and choosing a professional versus non-professional provider. Overall, cost sensitivity was negatively associated with patient satisfaction. Our results have important implications for understanding household decisions in the choice of government and private healthcare providers.