HOUSEHOLD RESPONSES TO PUBLIC-HEALTH SERVICES - COST AND QUALITY TRADEOFFS

The effectiveness of government investments in health care depends on the public's response to price and quality as well as on whether these expenditures actually improve health outcomes. Consumers, even those in low-income households, are willing to pay fees for better health ca re if the fees translate into improved access and reliability. But whe n prices rise without a concomitant improvement in services, malnutrit ion and child mortality rates increase. The availability of basic heal th care has a relatively greater impact on households with low incomes or low education, or both, than does the provision of more specialize d services. This article describes the types of services for which hou seholds indicate they are willing to pay increased fees. It also indic ates the potential gains from improving these services, as well as the consequences of moving faster on cost recovery than oil providing imp roved or better-targeted services.