This project will evaluate the impacts of large increases in prices of health providers and medical care provider quality on health care utilization and a variety of health outcomes. We will draw on a unique data set based on a controlled random experiment being conducted by the Indonesian government and RAND, in which health facility user fees and quality of health care services will be improved by varying levels at selected health care facilities in two provinces, East Kalimantan and West Nussa Tenggara. A benchmark survey of over 6,000 households and a resurvey of the same households one year later, after the price-quality interventions have been put into place, will provide an estimate of the true impact of price and quality variations on the utilization of health services and on health outcomes. A corresponding survey of health care providers will provide information on the characteristics of providers and the quality of care. The price and quality impacts on utilization and health outcomes will be studied on individuals through the life cycle, from infants to the elderly. Indicators of health status will include anthropometric measurements, for children, illness symptoms and duration, Activity of Daily Living (ADL) measures of physical functioning and self- assessments of general health status. Health care utilization will be measured by the choice of health care provider. We will not only investigate the main effects of changes in price and quality of service, but will also examine who benefits most (or are hurt least); for instance, households with better educated women? These objectives will be accomplished by estimating reduced form multivariate models of the demands for health status and for health services, explicitly controlling for unobserved heterogeneity bias from purposive investment in health facilities. We will use the fact that we have available data from two points in time in the empirical work. This will enable us to account for the fact that several of our health measures are stocks, not flows. For instance, we will be able to examine growth in children and changes in the functional status of the elderly.
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