PCP16 - The Optimal Willingness-To-Pay for Health Care Under Different Health Status, Socioeconomic Conditions, And Health Insurance Programs – Introducing a Conceptual Model in Neo-Classical Economics Framework

Abstract

Access to health care is largely dependent on out-of-pocket spending affordable to health seekers, particularly in low- and middle-income countries (LMICs). As many LMICs are striving to achieve universal health insurance coverage, few conceptual models are available to assess optimal individuals or households willingness to pay (WTP) for health care given variable health status, socioeconomic conditions, and social benefits programs. OBJECTIVE This study introduces a modeling approach to assess optimal WTP from individuals perspective with implications on future research and policy designs for increasing access to care. A two-stage optimization and comparative static analysis are used to determine optimal WTP given variable health status, socioeconomic conditions, and health insurance coverage. Simulations and sensitivity analysis are performed to illustrate the applications of this economic model based on the optimal WTP calculated under various conditions. RESULT Result of this study shows the optimal WTP differs drastically across socioeconomic spectrum (SES) with only the highest-income group showing positive WTP in relation to annual income increase. Comparative static analysis further suggests individuals of different SES group respond differently to changes in their health status, health insurance benefits, and the expected outcomes of health care services. The economic model introduced in this study provides an analytical framework to assess optimal WTP from individual perspective in a multivariate setting. Applications of this model further implies a multi-tier approach to address affordability issue and increase access to care.