Speaker
Description
At more than 50%, India has one of the world’s highest out-of-pocket healthcare expenditure rates. Historically, low cost healthcare has been provided by the government through public healthcare facilities. Faced with a high demand for tertiary healthcare and an overcrowded public healthcare infrastructure, the central and various state governments adopted a model of public-private-partnership where the government will pay the insurance premium for low income households who will be covered by the insurance at various government and private hospitals for their tertiary care needs. However, given the wide disparity in quality across
private hospitals, it is not clear how such a framework would affect the demand for private healthcare or overall health outcomes. We analyse a pioneering public insurance scheme in India, the Rajiv Aarogyasri program (RAS), introduced by the state of Andhra Pradesh(AP) between 2007 and 2008, on maternal and child health outcomes. India has consistently ranked
low in maternal and child health outcomes among its peers and a leading factor contributing to high infant and maternal mortality rates is the low rate of institutional deliveries. Since RAS covers institutional reproductive care, particularly subsidizing private care, we first
examine if RAS increases institutional deliveries, particularly in private hospitals. Second, we study if the program led to improvements in key outcome variables that might have come from increased access to institutional care, specifically out-of-pocket costs and infant mortality. Using pooled cross-section data from three waves of District Level Health Survey(DLHS), we estimate a difference-in-differences model, by exploiting variation in the timing of births between 2000-2015 and using contiguous districts in the neighboring states without RAS as a plausible control group. Our tests confirm parallel pre-treatment trends between the treatment and the control districts. We find that deliveries in private hospitals increased, and government hospitals decreased after the introduction of the program. However, even as the use of private facilities increased, we find that out-of-pocket costs declined. Further
examination shows that these effects come from households who were more likely to be using government hospitals before the introduction of RAS suggesting a substitution effect of the relative price change – a switch to private from government hospitals. We do not find an overall increase in access to tertiary care, nor any effect on infant mortality. However,
heterogeneity analysis reveals that the program likely bridged the gender gap in access to costly private healthcare. Even as we observe a more pronounced decrease in OOP expenses for male births relative to female births, girls are more likely to be born at private facilities
following the implementation of RAS, whereas boys’ likelihood of being born in private facilities remains unchanged before and after RAS. This suggests that parents were more inclined to opt for costly private institutional deliveries for male children in comparison to female children prior to the introduction of RAS.
