By Ricardo A. Bitran
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Extra info for A supply-demand model of health care financing with an application to Zaire: a training tool
Page 13 3 Ambulatory Care The last section provided an overview of the model's logic. This segment describes in detail the ambulatory care component of the model. Structure of the Market The market for ambulatory health care services, both curative and preventive, is composed of consumers and producers. Consumers are characterized by their number, income, demographic traits, epidemiological data, and geographic location in relation to the providers. Providers consist of a health center (focus health facility), with utilization levels and financial performance that are studied in detail through the model, and its competitors.
Users of the model can assess the effect on health care use and health facility financial performance of health financing policies such as: cross-subsidizing prices among any set of services in general and between curative and preventive care in particular; extending health insurance coverage; modifying the premium and copayment of the insurance plan; changing the free-care policy; changing price levels; and price discrimination (for example, based on income or distance to the facility). The model can also be used to study the effects of changes in other variables on demand and cost recovery performance, including: a devaluation or revaluation of the country's currency; changes in the degree of competition in the market for a particular health service; and labor substitution within the facility among different categories of health professionals.
Finally, among those choosing a particular provider, they estimate a linear demand equation for the quantity of visits. 3. This is indirect utility. Page 16 where Pj = consumer's out-of-pocket price at provider j's facility Yr = household income of people living in population ring r Drj = weighted average distance between the people in population ring r and provider j b0j = constant that captures the effect on consumer utility of all the variables affecting utility other than price, income, and distance (quality perceptions, for example, are imbedded in this coefficient) b1 = coefficient associated with the variable price (b1 < 0) b2 = coefficient associated with the product of the variables price and income (b2 > 0) b3 = coefficient associated with the variable travel distance (b3 < 0).
A supply-demand model of health care financing with an application to Zaire: a training tool by Ricardo A. Bitran