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Keywords:

  • Demand models;
  • health care;
  • Egypt

Abstract

This paper uses the results of a household survey conducted in Cairo, Egypt in 1992 to examine the factors that influence the demand for inpatient and outpatient health services. Multi-stage discrete choice models of the demand for health care, which identify the importance of individual, household, and facility level variables on each treatment decision, are estimated separately for outpatients and inpatients. Consumers are assumed to decide whether to seek any treatment and then choose between three categories of providers: a large public hospital (Embaba Hospital), all other public providers, and private/charitable providers. The results confirm that more affluent consumers prefer the higher cost, higher quality private and charitable hospitals. Age, sex, education, and insurance are also found to strongly impact the use of medical services. The results are suggestive but do not conclusively show that inpatient care is less price responsive than outpatient care. Price responsiveness of inpatient and outpatient demand are imprecisely estimated because price is highly correlated with quality, and the available data on facility quality do not permit us to adequately control for quality variations across facilities.