The substitutability of public and private health care for the treatment of children in Pakistan

Abstract

To evaluate how imposing or raising user fees at government health care facilities will affect access to medical care, the distribution of effects across income groups as well as the availability of other providers of medical care must be considered. This study uses a nested multinomial logit model to study the substitutability of public and private care providers in the treatment of children's illnesses in urban Pakistan. Although the poor are more price responsive than the general population, reduced use of government clinics following a price rise will lead to greater use of private care providers rather than to an increase in self-care or the forgoing of care. Thus, the private sector is likely to handle most of the patients who shift away from publicly provided health care following an increase of user fees in urban Pakistan, provided that prices do not rise in the private sector because of increased demand.

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