Society of African Journal Editors

Rwanda Journal

Effect of Health Insurance on Demand for Outpatient Medical Care in Rwanda: An Application of the Control Function Approach

Authors: Mulindabigwi Charles Ruhara

Journal: Rwanda Journal

In the 2000’s the Government of Rwanda initiated health sector reforms aiming at increasing health care access. Despite these reforms there has not been a corresponding increase in demand for health services, as only about 30 percent of the sick persons use modern care (NISR, 2011). The objective of this paper is to examine factors influencing outpatient care demand in Rwanda and suggest appropriate measures to improve utilization of health services. The source of data is the Integrated Household Living Conditions Survey (EICV2) conducted in 2005 by the National Institute of Statistics Rwanda (NISR). A structural model of demand for health care is estimated to measure demand effects of covariates. The findings indicate that health insurance is a significant determinant of outpatient medical care. In addition, price of health care and household income are among the main drivers of utilization of health care. Being female is found to increase the probability of seeking outpatient health care. Two main policy recommendations emerge from these findings. First, the government should reduce out-of-pocket health care expenditures (OOPE) through subsidies to public health facilities. Second, the government should reduce the premiums for Community Based Health Insurance Schemes (CBHIs) to increase the coverage rate. Keywords : Outpatient, Health insurance, User Fees and logit model.