This paper examines the impact of quality improvements in conjunction with user fees on the utilization and equality of outpatient services at a range of public sector health facilities in India. Project impact on outpatient visits was estimated via the difference-in-difference method using pooled time series visit data from project and control facilities. The results indicate that the quality improvements significantly increased visits at all facility types. The project effect was largest at primary health center (PHC) and community health center (CHC), followed by district hospital (DH) and female district hospital (FDH). Pro-rich inequalities in outpatient visits increased at DHs and FDHs while at CHCs and PHCs the distribution remained equitable. This suggests that quality improvements at public sector health facilities can increase utilization of outpatient services in the presence of nominal user fees, but can also promote greater inequality favoring the better-off. At the referral hospital level, quality improvements should be made in conjuction with programmes which encourage utilization by the poor. In contrast, the benefit of quality improvements at PHCs and CHCs is equitably distributed.
Health Economics, 16 (8) pp. 799-813