Understanding the Paradox of Primary Health Care Use: Empirical Evidence from India

TL;DR

This paper investigates why Indian households prefer fee-charging private health care despite the availability of free public services, revealing historical roots in forced sterilization policies that influence current trust in private providers.

Contribution

It uncovers the long-term impact of India's forced sterilization policy on current health care choices, using a novel instrumental variable approach to establish causality.

Findings

Higher exposure to sterilization correlates with lower public health care usage.

Greater sterilization exposure increases trust in private health providers.

Supply-side factors do not explain the shift in health care preferences.

Abstract

I study households' primary health care usage in India, which presents a paradox. I examine why most households use fee-charging private health care services even though (1) most providers have no formal medical qualifications and (2) in markets where qualified doctors offer free care through public hospitals. I present evidence that this puzzling practice has deep historical routes. I examine India's coercive forced sterilization policy implemented between 1976 and 1977. Utilizing the unexpected timing of the policy, multiple measures of forced sterilization, including at a granular level, and an instrumental variable approach, I document that places heavily affected by the policy have lower public health care usage today. I also show that the instrument I use is unrelated to a battery of demographic, economic, or political aspects before the forced sterilization period. Finally, I explore the mechanism and document that supply-side factors do not explain these differences. Instead, I demonstrate that places with greater exposure to forced sterilization have higher confidence in private hospitals and doctors to provide good treatment.