People's choice of healthcare provier: policy options for rural Karnataka in India

The main objective of this paper is to examine the people's choice of health care provider in rural India and the policy concerns in engenders. This is estimated through the Logit Model by using the rural household survey on health in Karnataka state in India. The study also explores the heuristic approach through observation and informal discussion with rural people about their opinion on existing health care services. The analysis shows that the private health care provider has emerged as the people's choice. However, the choice is significantly linked with socio-economic conditions of the rural people. The discussion suggests that policy makers in India should take serious note of the growing popularity of the private sector in providing health care services, and that it would be advisable to opt for a private-public mix for regulatory and supportive policy interventions. This would inevitably promote this sector's viable and appropriate development

Determinants of cost efficiency of public and private hospitals of Karnataka in India

The main objective of this paper is to analyze the determinants of cost efficiency of public and private hospitals of Karnataka State in India. This is estimated\ud through the parametric (stochastic frontier) and nonparametric (data envelopment) methods by using the Hospitals Facility Survey (2004) in Karnataka. The findings indicate that the choice of methods did not make any\ud significant difference in the results and they are robust. The analysis infers that (a) hospitals (both public and private together in the analysis) are cost inefficient\ud in the State, which is due to technical and allocative system of resources of the hospitals; (b) the private hospitals appear relatively less inefficient than the public\ud hospitals; and (c) the main determinants of the technical and allocative inefficiencies of the public hospitals are inappropriate interventions of inpatient days care, share of medical personnel, beds capacity, quality indices, and choice of the locations; while in the case of private hospitals, it relates only to beds capacity and quality indices. It emphasizes that hospitals need to maintain the\ud quality of healthcare services under the emerging competitive environment in the State; otherwise, it would be subject to financial vulnerability since private\ud hospitals highly depend on the user fee payment of the patients. Need based financing through "capitation fee" and an effective alternative payment mechanisms such as user fee with a protected social justice criteria for poor in\ud the public hospitals are the worth considering options in the State