Discuss why the demand for health care from the poorest in developing countries is not higher and what can be done improve upon these issues.

 

This essay analyses why the poorest in developing countries have low demand for health care and underutilise available solutions. It sets out the evidence of underutilisation before exploring potential factors that determine the preferences and constraints: time inconsistency, cultural traditions, impact of education level and the costs. And then it will suggest possible ways to boost demand and utilisation.

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One prevalent example of underutilisation is found in a study in Bolivia, only 4.1% of children who died were hospitalised before the fatal episode and 61.6% of children whose illness led to death were not seen by medical experts, whether that be a hospital, public health centre or private practitioner (Aguilar et al., 1998, P.16-19). Furthermore, on child mortality, another paper finds that 63% of global child deaths are avoidable (Jones et al., 2003, P.1). Immunisation rates are lower among poorer families than richer ones, and these disparities between the richest quintile and poorest quintile carry over into receiving the correct treatment for diarrhoea and utilisation of reproductive health services. (Gwatkin et al., 2007, P.8). This shows that the poor in developing countries seek health care less than the richer citizens in the same countries.

Much of the effective health care available is cheap and readily available, with high levels of marginal benefit, particularly for the poor. These effective solutions are largely preventative and have low associated costs. Measures include vaccination programmes, improved sanitation and increased usage of mosquito nets. As mentioned in the introduction there are numerous factors that lead to low demand. On the supply side, the barriers revolve around access and the quality of health care provided: resource allocation is insufficient leading to substandard quality health care and a lack of essential services that leads users not to bother. Furthermore, resource allocation is inefficient as it is focused on providing services in urban areas where they fail to benefit the rural poor who would benefit the most. In conjunction with this, there are barriers that stifle the demand for health care, economic constraints restrict their ability to consume and their preferences and behaviour affect their desire to utilise the available health care. By nature, supply and demand behave cyclically and supply goes hand in hand with demand and it is problematic to attempt to extricate fully one from the other. A seemingly obvious solution would be to redress some of the supply-side issues and see how the demand reacts. However, even why supply-side issues are improved it does not always correspond to a matched increase in demand for services. Seva Mandir, an NGO operating immunisation camps in Udaipur, found that even when they ran efficient monthly camps that up to 80% of children were left unvaccinated (Banerjee et al., 2010). This suggests that remedying supply side issues alone is not enough in order to increase demand and that the constraints and preferences of the poor are key in determining the demand for health care in developing countries.

 

With the case of Seva Mandir and its vaccination programmes, there are several behavioural reasons that result in the potential beneficiaries not wanting to complete the vaccination programmes. Banerjee and Duflo argue there is a dynamic inconsistency (Banerjee and Duflo, 2011) issue engrained within the behaviour of the poor, which leads them to hyperbolically discount the potential rewards in the future of taking a certain action. Here, the action is to vaccinate children, immunising them from measles. The costs are the efforts and opportunity cost that taking a child to a camp and are all in the present. And when in the present we as humans are ruled by impulse and emotion. We value our time in the present far more highly than we do our time in the future. The potential benefits of such preventative medicine lie in the future and are often difficult to understand to uneducated parents. Their child may get sick anyway and they may end up questioning the value of the immunisation, not understanding what the immunisation process was designed to protect against. Time inconsistency leads to the procrastination of worthwhile actions; why do today what can wait until tomorrow? This valuation system determines the preferences of the poor when making decisions with regards to vaccination and leads the poor to ignore available health care solutions.

A societies tradition and culture can further determine the very poor value various different treatments. Many developing societies place a high value on spiritual and cultural beliefs, and these means the poor prefer to use traditional healing methods over and above modern medicine. In Bolivia, many of the parents used traditional medicine at least in equal measure with modern medicine (Aguilar et al., 1998. P.19-24). In Udaipur, Banerjee and Duflo found that “experts argued it would be exceedingly difficult to convince villagers to immunise their children without first changing their beliefs” (Banerjee and Duflo, 2011. P.62). Traditional beliefs about gender can also determine the demand for maternal care and fertility treatment. Many patriarchal societies restrict access for women to these services. Thus, gender issues and traditions can suppress demand for health care.

 

Education, and the lack thereof, and a lack of required knowledge helps underpin this decision-making process of failing to immunise and more generally to seek more appropriate health care. It is clear that many of the poorest do not have the levels of knowledge required to recognise various illnesses and do not understand the extensive potential benefits of preventative medicines. Surely, if those parents in Bolivia had known that their children may be fatally ill they would have made more of an effort to seek medical attention at the critical moment? A study found that in India, a third of mothers stated that they did not vaccinate their children because they didn’t understand the benefits (Pande and Yazbeck, 2003). In Delhi, the poor match the rich in their spending on minor illnesses, however, for more chronic illnesses, the rich outspend the poor. (Das and Sánchez-Páramo, 2003). This may be because the poor cannot afford to spend the increased amounts to deal with more serious ailments, but sometimes also is due not being able to recognise when symptoms are more serious and require more serious attention. The poor further misunderstand often the type of medication they need (World Bank, 2004), and misspend their resources on antibiotics and further believe that remedies cannot be effective unless they directed straight into the blood-stream. Due to this lack of comprehension of modern medicine, it is hard for customers to gain trust in it; when a doctor prescribes nothing and symptoms disappear, it is hard for people to understand the causality behind it. (Banerjee and Dufflo, 2011. P.61). The evidence overwhelmingly suggests that socioeconomic background influences perception of illness and that the rich report illnesses more (Castro-Leal et al., 1999 and Strauss and Duncan, 1998). This could be because as O’Donnell that when a large portion of the population of the poor are in a persistent state of poor health, this state becomes the normal and it becomes harder to recognise illnesses when they come about (O’Donnell, 2007). A more educated, or at least more knowledgeable poor, would more readily recognise the benefits of the preventative health care that they currently show weak demand for.

 

There are also income and cost constraints on the demands of the poor. It has been shown that there is a positive association with levels of child immunisation and family income (Steele, Diamond and Amin, 1996. Gage, Sommerfeit and Piani, 1997). O’Donnell finds that “the nature of health financing in the developing world, with heavy reliance on out-of-pocket payments, strengthens the relationship between health care utilisation and income” (O’Donnell, 2007. P.5). The poor are also more cost sensitive (Gertler and van der Haag, 1990). As mentioned, much of health care financing comes out-of-pocket, and because of this, more advanced health care for serious ailments becomes too large a burden to bear for many poor. Banerjee and Duflo argue that the reliance on faith healers in Udaipur is in part due to the inability of the poor to afford treatment for more serious conditions (Banerjee and Duflo, 2011. P.61). These costs effectively exclude the poor from some levels of health care. The poor are also more sensitive to the costs beyond just the cost of health care. The rural poor have to travel further to access health care, increasing the travel time and cost. The increased time of travel increases the associated opportunity cost of lost earnings also. In the Ivory Coast, it was found that the poor were more sensitive to travel time than the poor (Gertler and van der Haag, 1990). These costs all contribute to suppressing the poor’s demand for health care.

 

In response to these factors that lead to low demand and utilisation by the poor, there are several solutions that can raise the demand for health care. One approach would be to look to change some of the incentives for the poor to seek health care. Banerjee and Duflo found that when incentives were provided, in the form of dal (a food staple in the area they were conducting the study) for each immunisation and steel for completing the course, that the immunisation rate went up by 700% (Banerjee and Duflo, 2011. P.63). This strategy increases the incentive for immunisation and solves the dynamic inconsistency problems discussed before. Conditional cash transfers also can help incentivise the poor to utilise available solutions: in Latin America and Central America confers positive effects on utilisation (World Bank, 2004). Although this raises the problem in that you shouldn’t have to bribe the poor to do something that is in their own interest, it isn’t so much of a bribe but a way to convince the poor to take action today and not to delay decisions. Utility goes from a utility that may or may not be realised in the future, depending on whether a child gets a disease or not, to an immediate utility that cannot be discounted.

 

One has to also constantly look to improve education in trying to increase demand. A better understanding of medicine will lead to great improvements in prevention and treatment. In the case of immunisation, it will mean that the poor understand that immunisation looks to treat specific diseases and not feel cheated if the child falls sick later and decide that immunisation is a waste of time. The benefits of immunisation will become clearer and therefore the benefits will be harder to underestimate or discount. The same can be argued of mosquito nets: a better understanding will lead to more utilisation. Banerjee and Duflo that about mosquito nets that “knowledge travels” (Banerjee and Duflo, 2011. P.68), and that friends and families that had observed the benefits of mosquito nets became more likely to buy one. Imperfect information about modern medicine leads to the poor to continue to use traditional medicine and to believe that unless the treatment course is antibiotics that it will be ineffective. By improving education, the trust in modern medicine will increase and it will make it harder for the poor to dismiss the opportunities of improving their health care situation by ignoring available solutions, thereby increasing demand.

 

To redress the constraints that stifle demand you first need to identify those very poor who are affected and then ensure that these costs do not hinder access. It would be hard to still deliver quality if all out-of-pocket payments were scrapped. Instead, to identify those in need could happen in a few ways: geographical targeting into certain areas based on poverty levels, targeting for children, elderly people and people who are socially excluded.

targeted subsidies towards areas of high poverty and means-tested exemptions to payments can both

 

Throughout this essay, we have examined how demand for health care by the poorest in developing countries is suppressed. Basic concepts of supply and demand dictate the low utilisation of health care as do more advanced economic theories, such as time inconsistency in choice architecture. One prominent solution is to improve education about medicine (but to explain the different ways to do this would require another essay entirely). The best programme to raise utilisation in the developing world would involve more money directed at reducing all the access issues and targeting money so as to reach the poorest and deliver an effective health service that they want to use. O’Donnell says that “reforms to management, regulatory, and political mechanisms” are required so as to ensure that providers are incentivised to deliver quality health care (O’Donnell, 2007). To truly solve the persistent problem of low demand you need to tackle long and short term demand barriers. Individuals need to be incentivised to use preventative health care and treatment. There needs to be an overall macro strategy combined with specifically focused and well thought out policies that act on a micro level. In the short term, raise incentives for the poor to access health care. Do this via targeted cash transfers, or by raising incentives through other measures as was done by Seva Mandir. This would raise utilisation of preventative measures. Take action by reducing the costs of accessing health care by reducing cash in hand financing for the poorest and reduce travel and opportunity costs by improving rural transport networks. For more long term solutions, it would be wise to improve education and to aim to reduce the overall cost of delivering quality health care. A solution to this may be an effective extension of health care insurance that protects the poor from the cost variations of medicine and high price points of advanced treatments