Determinants of health care demand in poor, rural China: the case of Gansu Province

This paper examines the determinants that influence health care demand decisions in rural areas of Gansu province, China. This represents the first effort to identify and quantify the effect of price of care on choice of provider in China, and is the first quantitative examination of this topic focusing on poor rural areas in China. In the three-tier health care system in rural China, we further distinguish the public village clinics and private village clinics using a mixed multinomial logit model. The results show that price and distance play significant roles in choice of health care provider. The price elasticity of demand for outpatients is higher for low-income groups than for high-income groups. When outpatients have particular concerns about provider quality or reputation, or when their health status is poor, distance tends to matter less, i.e. they are willing to travel further in order to obtain better treatment for their illness. Insurance status has a significant impact on the choice of public village clinics relative to self-treatment. Furthermore, age and the attributes of illness are also statistically significant factors. We discuss the policy implications of the results for meeting the health care needs of the poor in rural China.