The demand for private telehealth services in low- and middle-income countries: Evidence from South Africa

Abstract

In low- and middle-income countries, many believe that telehealth services could significantly expand access to doctors by offering remote access at low cost. Yet, despite its convenience, telehealth care is limited by the absence of physical examination, point-of-care testing, or immediate treatment. Hence it is unclear how individuals value such options compared to standard face-to-face care. We study this issue in South Africa with general practitioners who today mostly practice in the private sector and are geographically located in wealthier areas with higher health insurance coverage. We use an incentive-compatible method to elicit robust measures of willingness-to-pay (WTP) for telehealth and face-to-face consultations with general practitioners in a sample of uninsured individuals. We find that only 36% of respondents are willing to pay the prevailing market price for a telehealth consultation. We find average WTP for in-person consultations is only 10% higher than that of telehealth. Additionally, individuals with higher health needs are willing to pay a premium for face-to-face consultations, while others are indifferent. Our findings suggest that private telehealth services are better suited for more minor health needs, but are unlikely to expand access to a majority unless cheaper models are introduced.