Do Acute Health Care Needs of the Poor Crowd Out Their Chronic Care Utilization? Evidence from Rural India

Abstract

In rural India, much of the public health facilities are better equipped to provide treatment for either acute ailments or reproductive and child health needs. Chronic diseases are treated mainly in secondary or tertiary hospitals located in sub-division or district headquarters or in the big cities, which makes their treatment more expensive. This paper uses demographic and health surveillance data from Birbhum to test whether there is a crowd-out effect on treatment of chronic diseases in the event of acute ailments in the household. We also test whether households ration the amount they spend on care for chronic ailments based on age and gender. With limited financial means, households prioritize treatment of acute conditions, reduce resources and efforts to treat chronic health care needs and these trade-offs are particularly strong in poorest households, and most disadvantageous to the elderly members within the households.