An Econometric Analysis of the Difference between Outpatient Health Services in Urban and Rural Areas

Abstract

This study assesses whether or not differences between outpatient health service utilization in urban and rural areas exist, and, if so, to try to quantify them. Data from the 1995 Korean National Health Survey was utilized. This survey is a nationwide household interview survey of non-institutionalized civilians which provides national data on the incidence of illness, the prevalence of chronic disease, and utilization of health services. Factor analysis was used to extract a common health index from several health-related variables such as sick days, bed days, disability days and perceived health status, to overcome potential multicollinearity. The regression-based approach was used for assessment and quantification of the difference. The probit model was applied to the first equation to discern use or nonuse of outpatient health services, with binary dependent variable. The two stage method with maximum likelihood was applied to the last equations for quantity of health service utilization, such as the number of outpatient visits and the logarithm of out-of-pocket costs with a continuous dependent variable with the selection problem. The results are as follows. The probability of outpatient visits, excluding drugstore visits, in rural areas is higher than in urban areas, but when drugstore visits were included the results turned out to be opposite. In terms of the quantity of outpatient health services, the number of visits and out-of-pocket costs in urban areas is higher than those in rural areas. In conclusion, there is still less access to outpatient health service in rural areas, in terms of the quantity of outpatient health services, after they go into the outpatient health service market. When drugstore health services were included, the difference between outpatient health services in rural and urban areas also became larger. Since the introduction of the national health insurance system, the difference in health services between rural and urban areas has apparently decreased. Health service utilization of residents in rural areas seemed to be even higher than that of urban area residents. The truth though, is that rural residents have less access to outpatient health service than urban residents. Therefore, in order to reduce this kind of difference, it is necessary that the demand for outpatient health services and the factors that affect it be studied.