Healthcare Facility Choice and User Fee Abolition: Regression Discontinuity in a Multinomial Choice Setting

Abstract

Summary We apply parametric and non-parametric regression discontinuity methodology within a multinomial choice setting to examine the effect of public healthcare user fee abolition on health facility choice by using data from South Africa. The non-parametric model is found to outperform the parametric model both in and out of sample, while also delivering more plausible estimates of the effect of user fee abolition (i.e. the ‘treatment effect’). In the parametric framework, treatment effects were relatively constant—around 10%—and that increase was drawn equally from home care and private care. In contrast, in the non-parametric framework treatment effects were largest for large (and poor) families located further from health facilities—approximately 5%. More plausibly, the positive treatment effect was drawn primarily from home care, suggesting that the policy favoured children living in poorer conditions, as those children received at least some minimum level of professional healthcare after the policy was implemented.