By James Allen IV, CEDIK Research Director
This year, members of our CEDIK Research Team published a thought-provoking article in the The Journal of Rural Health: Residents’ Willingness-to-Pay for Attributes of Rural Health Care Facilities. Here is a short preview of our results:
“Table 5 displays the willingness-to-pay (labeled as WTP) associated with each attribute. The willingness-to-pay represents the estimated fee that the average rural household is willing to pay annually in order to maintain the presence of that attribute in their county health care facility relative to the baseline option. The columns presenting low and high willingness-to-pay (labeled Low WTP and High WTP, respectively) are the willingness-to-pay estimate’s 2.5% and 97.5% quantiles … Below, we discuss how the willingness-to-pay estimates reveal which attributes are the most valued by the respondents. Then, we combine attributes and their willingness-to-pay estimates into attribute bundles resembling rural health care facilities in order to discuss which types of facilities are most valued by the respondents.”
Interested? Want more information? Click here to go to the full article or read the abstract below:
Context: As today’s rural hospitals have struggled with financial sustainability for the past 2 decades, it is critical to understand their value relative to alternatives, such as rural health clinics and private practices.
Purpose: To estimate the willingness-to-pay for specific attributes of rural health care facilities in rural Kentucky in order to determine which services and operational characteristics are most valued by rural residents.
Methodology: We fitted choice experiment data from 769 respondents in 10 rural Kentucky counties to a conditional logit model and used the results to estimate willingness-to-pay for attributes in several categories, including hours open, types of insurance accepted, and availability of health care professionals and specialized care.
Findings: Acceptance of Medicaid/Medicare with use of a sliding fee scale versus acceptance of only private insurance was the most valued attribute. Presence of full diagnostic services, an emergency room, and 24-hour / 7-day-per-week access were also highly valued. Conversely, the presence of specialized care, such as physical therapy, cancer care, or dialysis, is not valued. In total, respondents were willing to pay $225 more annually to support a hospital relative to a rural health clinic.
Conclusion: Rural Kentuckians value the services, convenience, and security that rural hospitals offer, though they are not willing to pay more for specialized care that may be available in larger medical treatment centers. The results also inform which attributes might be added to existing rural health facilities to make them more valuable to local residents.
Allen, J. E., Davis, A. F., Hu, W. and Owusu-Amankwah, E. (2015), Residents’ Willingness-to-Pay for Attributes of Rural Health Care Facilities. The Journal of Rural Health, 31: 7–18. doi: 10.1111/jrh.12080