IMPROVING EQUITABLE ACCESS TO CATARACT SURGERY IN RURAL SOUTHERN CHINA: USING WILLINGNESS TO PAY DATA TO ASSESS THE FEASIBILITY OF A TIERED PRICING MODEL TO SUBSIDIZE SURGERIES TO THE POOREST by Elaine M Baruwa A dissertation submitted to Johns Hopkins University in conformity with the requirements for the degree of Doctor of Philosophy Baltimore, Maryland June 2007 © Elaine M Baruwa 2007 All Rights Reserved UMI Number: 3288601 Copyright 2007 by Baruwa, Elaine M All rights reserved INFORMATION TO USERS The quality of this reproduction is dependent upon the quality of the copy submitted Broken or indistinct print, colored or poor quality illustrations and photographs, print bleed-through, substandard margins, and improper alignment can adversely affect reproduction In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted Also, if unauthorized copyright material had to be removed, a note will indicate the deletion ® UMI UMI Microform 3288601 Copyright 2008 by ProQuest Information and Learning Company All rights reserved This microform edition is protected against unauthorized copying under Title 17, United States Code ProQuest Information and Learning Company 300 North Zeeb Road P.O Box 1346 Ann Arbor, Ml 48106-1346 Abstract Title: Improving Equitable Access to Cataract Surgery in Rural Southern China: Using Willingness to Pay Data to Assess the Feasibility of a Tiered Pricing Model to Subsidize Surgeries to the Poorest Aim: To assess the equity of financial access to cataract surgery given willingness to pay (WTP) for cataract surgery at the current price of surgery and for added amenities such as surgery by a senior surgeon, an improved intraocular lens, transport and food To determine the feasibility of a tiered pricing and cross-subsidization model using these estimates Methods: A WTP survey was administered at community screenings and hopsital cataract surgery clinics in rural Guangzhou WTP was estimated using interval regression and then compared to the price of surgery to determine access A further equity analysis was conducted using concentration indices and curves The WTP for amenities was similarly analyzed to determine potential demand Results: WTP surveys were conducted with 656 patients and 342 of their caregivers The mean WTP for the community screening patients was 371RMB (S.D 114RMB) and 570RMB (S.D 69RMB) for the hospital patients (8RMB =US$1) For caregivers the mean was 619 RMB (S.D 77 RMB) At the two prices charged by HKI, 500RMB and 630RMB, the estimated concentration indices were 0.18 and 0.36 for patients, which implies that financial access is inequitably concentrated amongst the wealthier patients However, the respective index measures were 0.01 and 0.10, for caregivers indicating lower inequity at 630RMB and no inequity at 500RMB The WTP for amenities was low, only 78RMB for a n senior surgeon and 42RMB for an improved IOL Conclusion: Access to cataract surgery is inequitably distributed between the poor and the poorest in this population even at cost, 500RMB We determined that not enough patients would be able to purchase surgery at higher, tiered prices for additional amenities in order to subsidize any significant number of surgeries at a lower price While WTP for cataract surgery was significantly higher when assessed by patient's caregivers, adjusting for this did not change the finding that access is inequitable for this population and creative ways must be found to lower prices Thesis Committee: Kevin Frick, PhD, Department of Health Policy and Management, JHSPH David Bishai, MD PhD, Department of Population and Family Health, JHSPH Emily West Gower, PhD, Department of Ophthalmology, JHMI Damian Walker, PhD, Department of International Health, JHSPH Laura Morlock, PhD, Department of Health Policy and Management, JHSPH in ACKNOWLEDGEMENTS I would like to thank: The Department of International Health, JHSPH for the excellent teaching and support that they gave me during my doctoral studies In particular, Carol Buckley for her all her help, making sure that I never got lost administratively My colleagues at the PneumoADIP for their encouragement and my director Angeline Nanni, for understanding my priorities and accomodating them with such empathy My fellow doctoral students were an invaluable source of encouragement and friendship, particularly during both of my pregnancies Arantxa Colchera, Nhan Tran, Marjorie Opuni, Rebekah Heinzen and Tram Lam studied with me, baby-sat for me, pondered the pros/cons of doctoral studies (mostly the cons), and attended my defense My family: Chiadi, Ketandu and Omenka for being so patient with a wife and mother who seemed to always have too much to at the same time I love them so much Their smiles and laughter kept me going on the rare occasions when I did feel as though 24 hours in a day and a single brain were not quite enough to get throught this journey Finally my advisor, Kevin Frick, who is extremely bright, seems to have 36 hours in work day and possesses a bizarre affection for econometrics but his patience, his work ethic and his generosity have been inspirational to me I aspire to be the type of mentor, teacher and friend that he has been to me and consider myself truly blessed to shared this experience with him TABLE OF CONTENTS STUDY AIM AND OBJECTIVES 1.1 OBJECTIVE 1.2 OBJECTIVE 1.3 OBJECTIVE BACKGROUND 2.1 EPIDEMIOLOGY OF CATARACT AND CATARACT SURGERY 2.2 RURAL HEALTH CARE IN CHINA 2.3 HKI, CHINA AND TIERED PRICING 10 2.4 THE ARAVIND EYE HOSPITAL, INDIA 11 2.5 HKI, CHINA AND CATARACT SURGERY 13 CONCEPTUAL FRAMEWORK 14 3.1 DEFINING EQUITY IN TERMS OF WILLINGNESS TO PAY 14 3.2 SOCIAL WELFARE AND THE EQUITY-EFFICIENCY TRADE-OFF 16 3.3 THE ECONOMICS OF TIERED PRICING 18 CONTINGENT VALUATION AND WILLINGNESS TO PAY 20 4.1 CONTINGENT VALUATION 20 4.2 WTP AND 'DEMAND' 23 4.3 WTP AND SOCIAL WELFARE 25 4.4 WTP AND EXTERNALITIES 27 4.5 WTP AND ALTRUISM 29 THE USE OF WTP IN DEVELOPING COUNTRY RESEARCH 31 5.1 WTP FOR INSECTICIDE TREATED BEDNETS IN EASTERN NIGERIA 31 5.2 WTP FOR COMMUNITY-BASED INSURANCE IN BURKINA FASO 32 v 5.3 WTP FOR CATARACT SURGERY IN NEPAL 33 5.4 WTP FOR CATARACT SURGERY IN TANZANIA 33 5.5 FINDINGS AND IMPLICATIONS 34 5.6 BEST PRACTICE FOR WTP SURVEY ADMINISTRATION 37 DATA COLLECTION 42 6.1 SAMPLING FRAMEWORK 42 6.2 SAMPLE SIZE 43 6.3 SURVEY DESIGN 44 6.4 SURVEY ADMINISTRATION 50 STATISTICAL METHODS 53 7.1 CATEGORICAL OUTCOMES - INTERVAL REGRESSION 53 7.2 CONCENTRATION CURVE AND INDEX ESTIMATION 58 RESULTS 63 8.1 SAMPLE SIZE AND RESPONSE RATE 63 8.2 SAMPLE CHARACTERISTICS 65 8.3 BIVARIATE ASSOCIATIONS WITH WTP ANYTHING FOR CATARACT SURGERY 75 8.4 MAXIMUM WILLINGNESS TO PAY FOR CATARACT SURGERY 79 8.5 OBJECTIVE PATIENTS WILLINGNESS TO PAY 86 8.6 OBJECTIVE CAREGIVERS WILLINGNESS TO PAY 99 8.7 EQUITY OF ACCESS USING CAREGIVER'S WTP 104 8.8 OBJECTIVE WILLINGNESS TO PAY FOR AMENITIES 105 DISCUSSION 109 9.1 FACTORS AFFECTING PATIENT'S WTP 109 9.2 PATIENT'S WILLINGNESS TO PAY 113 9.3 FACTORS AFFECTING CAREGIVER'S WTP 115 vi 9.4 HOUSEHOLD CHARACTERISTICS' IMPACT ON WTP ON PAIRED RESPONDENTS 116 9.5 CAREGIVERS' PREDICTED WILLINGNESS TO PAY 118 9.6 EQUITY OF ACCESS 122 9.7 POLICY IMPLICATIONS FOR HKI 124 9.8 POLICY IMPLICATIONS FOR CHINA'S 9.9 WAS THE METHODOLOGY APPROPRIATE FOR OUR OBJECTIVES? 128 9.10 WAS THE METHODOLOGY APPROPRIATE FOR THIS POPULATION? 128 9.11 BEST PRACTICE FN PRACTICE 133 9.12 STUDY LIMITATIONS 137 9.13 CONCLUSION 140 10 APPENDICES RCMS 127 151 10.1 WTP SURVEY FOR PATIENTS 151 10.2 WTP SURVEY FOR CAREGIVERS 171 11 CURRICULUM VITAE- ELAINE MONISOLA BARUWA 190 VII TABLE OF TABLES TABLE NEW COMMUNITY MEDICAL SCHEME - PREMIUMS, CO-PAYMENTS AND DEDUCTIBLES TABLE SURVEY STRUCTURE 45 TABLE SAMPLE SIZE BY SITE AND TYPE 63 TABLE SAMPLE SOCIODEMOGRAPHICS 66 TABLE WORK STATUS AND CARE REQUIREMENTS 67 TABLE VISUAL ACUITY CLASSIFICATION 69 TABLE SAMPLE VISUAL ACUITY 69 TABLE SAMPLE HOUSEHOLD INCOME 71 TABLE REASONS FOR NOT WANTING TO PAY FOR SURGERY 72 TABLE 10 FIRST PAYMENT CARD AS A DETERMINANT OF MAXIMUM WTP 74 TABLE 11 BIVARIATE ASSOCIATIONS WITH WILLINGNESS TO PAY ANYTHING FOR CATARACT SURGERY (PATIENTS ONLY, TABLE 12 MAXIMUM N=656) WTP ANYTHING FOR CATARACT SURGERY, 76 (N=656) 79 TABLE 13 NUMBER OF RESPONDENTS AND THEIR MAXIMUM EXPRESSED WTP BY PAYMENT CARD AND BY SITE 84 TABLE 14 CHECKING THE CONSISTENCY OF IMPUTED INCOME VARIABLES 86 TABLE 15 MAXIMUM WTP - FINAL PATIENT MULTIVARIATE MODEL (N=656) 89 TABLE 16 PREDICTED WTP AND ACCESS FOR PATIENTS 92 TABLE 17 CONCENTRATION INDICES FOR PATIENTS 96 TABLE 18 CAREGIVER MAXIMUM WTP MODEL 101 TABLE 19 PREDICTED MAXIMUM WTP FOR PAIRS 103 TABLE 20 CONCENTRATION INDEX FOR CAREGIVERS 105 TABLE 21 WILLINGNESS TO PAY FOR AMENITIES 106 TABLE 22 MAXIMUM WTP FOR A SENIOR SURGEON FROM PATIENTS 107 TABLE 23 PREDICTED WILLINGNESS TO PAY FOR AMENITIES 107 viii TABLE 24 HOUSEHOLD SIZE AND NUMBER OF CHILDREN TABLE 27 CONCENTRATION CURVE FOR 250RMB SURGERY FOR COM SCREENING PATIENTS 117 125 IX )St ill not influence the hospital's current services, treatment, and id from the clinic? Please remember that this is hypothetical, and Are you all willing to pay an additional fee for transportation to PARTB itaract surgery, you would be interested in Now we'd like to understand what services, additional to basic Go to Part B RMB RMB RMB Bl.2.2 Bl.2.3 Amount: Bl.2.1 Card: TRAINING MANUAL) Shuffle AMENITY payment cards and proceed as previously Unsure Sure WOULD NOT Pay Sure WOULD Pay Unsure Sure WOULD NOT Pay Sure WOULD Pay Unsure Sure WOULD NOT Pay Sure WOULD Pay Response: Why are you all not willing to pay for transportation? RMB Bl.2.5 Bl RMB Bl 2.4 Sure WOULD NOT Pay Unsure Sure WOULD Pay Cannot afford Unsure Sure WOULD NOT Pay Do not need Sure WOULD Pay 183 B3.1 B2.1 eatment, and cost ypothetical, and will not influence the hospital's current services, nproved intraocular lenses? Please remember that this is Are you all willing to pay an additional fee to be given >r a better doctor?") ifferent prices, would you be willing to pay a little more money :ads in Chinese, "If doctors of different seniority charged (To conform with Chinese cultural understanding, the question ;rvices, treatment, and cost hypothetical, and will not influence the hospital's current 2rformed by one of the senior doctors? Please remember that this Are you all willing to pay an additional fee to have the surgery AS BEFORE WITH Bl SERIES 184 Are you the decision maker in the patient's household? Does the patient require a caregiver? IAKER PART C FOR CAREGIVER/HOUSEHOLD DECISION ifluence the hospital's current services, treatment, and cost leals? Please remember that this is hypothetical, and will not Are you all willing to pay an additional fee for personalized 1 Yes Yes No Go to Part D No 185 How much time does the caregiver spend with the patient? Is the caregiver paid or unpaid? Since the patient requires a caregiver, does this affect C6.3 C6.4 C6.5 3usehold income in any of the following ways? Are you the patient's caregiver? C6.2 Unpaid No affect Part-time Paid Yes Full-time No 186 C6.6 icome? How much does the patient having a caregiver affect household Household member cannot work because they are Not at all affected A little bit affected Fairly affected Severely affected le caregiver Household has to pay a non-household caregiver 187 Age Gender What level did you achieve in school? D1.0 D2.0 D3.1 PARTD Primary School Junior High High School University (undergraduate) University (graduate) None (Turn to question D3.2) Female Male 188 Can you read the newspaper? Do you live in a rural or urban area? How many people live in the same house as you? How many are younger than 18 years old? D3.2 D4.0 D5.1 D5.2 Rural Urban Yes No 189 D6.0 ith you? What is the total monthly income for you and the family livin; 1-1,000 RMB 1,000-2,000 RMB 2,000 - 5,000 RMB 5,000-10,000 RMB 10,000 or more RMB Don't Know 190 11 Curriculum Vitae - Elaine Monisola Baruwa Date of Birth: 02/13/74 E-mail: ebaruwa@ihsph.edu Address: 918, East 36th Street Tel: 410 235 4436 Baltimore Cell: 443 857 7106 MD21218 Citizenship United Kingdom Passport Holder Nigerian Passport Holder U.S Permanent Resident Education 2002 - Present )egree Pending) Johns Hopkins Bloomberg School of Public Health PhD Candidate, Health System Policy and Financing, International ealth, 2000-2001 Imperial College MSc Health Management 1996-2000 Birkbeck College BSc Financial Economics (Econ.) with Honours 1999 (Summer) London School of Economics Certificate in Econometrics 1990-1996 College of Medicine, University of Lagos, Nigeria Dental Surgery 191 Career Summary 01/01 -09/01 Deutsche Bank Team Manager Leader of a team of 20 in the desk top publishing department of lobal Investment Banking Tracking corporate finance marketing and transaction activities Client relationship management, supervision, staffing and quality isurance 01/99-01/01 Morgan Stanley Dean Witter Presentations/Graphics Operator Designing client presentations for the Investment Banking Division Quality assurance 02/99 - 03/ 99 Andell Ltd Assistant to the Chief Investment Officer Investment Research in the media and information technology ictors 04/ 98 - 12/ 98 ABN AMRO Rothschild Research Assistant, Equity Capital Markets Research/analysis of Initial Public Offering (IPO) demand in -imary and secondary markets Writing and reviewing IPO prospectuses 192 Quantification and evaluating underwriting commitments and risks 09/97 - 03/98 Nomura International Research Assistant, Fixed Income Research and Strategy Designed and wrote the user manual for Nomura's Fixed Income ortfolio Optimisation Software Maintained live data benchmark spreadsheets (Bloomberg and Excel) i support the Optimisation Software 02/97-07/97 Skillion Ltd Office Manager Manager of a 20-unit Executive Office building Service marketing Developed and managed client relationships Financial management of client accounts and site budgets Previous Research • Health sector-related: A Cost-Effectiveness Study of the CenteringPregnancy Model of Prenatal Care Delivery CenteringPregnancy, a model of group care for prenatal services delivery being used for the first time by the Prince George's County Health Department, Maryland for its low risk delivery 193 patients The study, funded by March of Dimes, compared CenteringPregnancy with the currently used traditional model of prenatal care Responsibilities included developing the study design, research protocol, managing the Maryland State DHMH and hospital IRB oversight processes, supervising data collection, analysis and presentation of the final results The Impact of Self Reported Pain on Annual Healthcare Expenditures Using the U.S Medical Expenditure Panel Survey In particular the analysis looked at different levels of self-reported pain and the main medical conditions associated with the reported pain levels In summary it was found that those who report having pain much or all of the time in an SF-12 questionnaire, have an annual health care expenditure that is approximately $2,000 more than those who report having pain some of the time and up to $4,000 more than those who report no pain at all These factors remain important even after adjusting for insurance status, demographics and clinical diagnoses Cost effectiveness of HIV treatment options and implications for HIV policy in Nigeria and the Nigeria Armed Forces (MSc Project) This analysis was both quantitative and qualitative A Markov model was used to estimate and compare the cost effectiveness of treating HIV in the Nigerian Armed Forces with opportunistic infection treatment/prophylaxis (OITP) and antiretroviral treatment (ARV) It was found that the use of ARV was costly compared to OITP and in terms of life years gained unlikely to be more cost effective However, during sensitivity analysis these results were strongly affected by the lack of high quality clinical trial data specific to this population The primary conclusion was that clinical trial data are essential if cost effectiveness data are to be used in advocacy messages by the stakeholders interviewed for this project, particularly those advocating on behalf of the 194 military • Development economics-related: A Comparison of Economic Growth Experiences: Nigeria and Indonesia (BSc Project) The contrasting states of economic development in Nigeria and Indonesia were compared and contrasted using the Solow model of economic growth The growth patterns of each country were examined in terms of capital, labour, technology and human capital as defined by the model Publications Frick KD, Baruwa E The Paradox of Economic Tools Promoting Equitable Access to Self-Sustainable Services for the Poorest: Increased Inequality, (Forthcoming), Tropical and International Health He M, Chan V, Baruwa E, Gilbert D, Frick KD, & Congdon N (2007) Willingness to pay for Cataract Surgery in Rural Southern China, Ophthalmology, 114(3), 411-415 Awards The Wright Scholarship 2005, Department of International Health The Edward and Kathy Ludwig Scholarship 2006, Johns Hopkins Bloomberg School of Public Health 195 [...]... designed to evaluate whether access to cataract surgery is equitable in the Guangdong Province of the People's Republic of China (PRC) and to explore the feasibility of using a tiered pricing model to increase uptake by the poorest, using data from a willingness to pay survey administered to a rural population in this region China and Cataract Cataract is the leading cause of blindness in the PRC in people... individuals due to the pricing and this outcome is inequitable The combination of these findings suggests that, with enough income variation, it might be possible to induce those with higher incomes who may be willing to pay more for surgery, to actually do so and then to use the increased revenue to subsidize a lower price that improves access for those with lower incomes and willingness to pay In other... those 1 unable to pay the current fee of 500 - 630 Renminbi (RMB) where 1 US$=8RMB Access: Inequality and Inequity In the 2001 study it was found that there were significant differences in the amount that respondents were willing to pay across income groups, specifically, those in higher income groups were willing to pay higher amounts This finding highlights an inequality in willingness to pay that is... cataract surgery 1.1 Objective 1 To determine whether access to cataract surgery is equitable in this population using willingness to pay survey data from respondents with cataract Empirical Analysis: The results from a survey administered to respondents who are cataract blind in at least one eye will be used to explore how willingness to pay for cataract surgery may differ by demographic and socioeconomic... facilities By constantly seeking ways to minimize costs while producing a high quality service that is demanded by both fee paying customers and the 'poorest' of the poor, Aravind is able to maintain a ratio of paying to non-paying customers of 1:2 with the firm maintaining an expenditure to income ratio of between 48-51% (Kumar Nirmalya & Brian Rogers, 2000) The core principle of the Aravind System is that... sources of payment Following this exploration, an appropriate model to estimate willingness to pay will be proposed and tested From these results an 'incidence rate' for cataract surgery at current pricing levels will be determined and combined with the income data to construct a concentration index that describes the equity of access 1.2 Objective 2 To determine whether willingness to pay differs... willingness to pay study conducted three months after the program began, suggested that income would be a limiting factor for access to cataract surgery even with the service priced at cost (He M et al., 2007) Now the program would like to determine whether or not it is feasible to use a tiered pricing structure to increase its revenues in order for it to provide cataract surgery at a lower price to. .. necessarily inequitable - there is nothing 'unfair' about individuals with a higher income being willing to spend more than individuals with lower income However it was also found that only 37% of the respondents would be willing to pay 500RMB or more to obtain cataract surgery This result suggests that even though the service is now available to this population, there may remain access limitations for some individuals... customers who are willing to pay for certain amenities along with the cataract surgery service to subsidize the provision of a 'no frills' service to those unable to pay anything at all In other words, it practices a form of price discrimination by using tiered pricing to maximize its output conditional upon offering as many as possible of the surgeries for free and subject to breaking even The 'tiers'... resources 4) To determine whether a societal valuation of cataract surgery might be significantly higher or lower than the patients' valuation of cataract surgery 1.3 Objective 3 To estimate the revenue that can be expected from a tiered pricing model and to determine the potential of the model to improve equity of access to surgery Empirical Analysis: The willingness to pay data will be used to assess ... Title: Improving Equitable Access to Cataract Surgery in Rural Southern China: Using Willingness to Pay Data to Assess the Feasibility of a Tiered Pricing Model to Subsidize Surgeries to the... equity of access to cataract surgery 1.1 Objective To determine whether access to cataract surgery is equitable in this population using willingness to pay survey data from respondents with cataract. .. to explore the feasibility of using a tiered pricing model to increase uptake by the poorest, using data from a willingness to pay survey administered to a rural population in this region China