Bypassing health providers: the quest for better price and quality of health care in Chad.

This paper investigates individuals' bypassing behavior in the health sector in Chad and the determinants of individuals' facility choice. We introduce a new way for measuring bypassing which uses the patients' own knowledge of alternative health providers available to them, instead of assuming perfect information as previously done. We analyze how objective and perceived health care quality and prices impact patients' bypassing decisions. The analysis uses data from a health sector survey carried out in 2004 covering 281 primary health care centers and 1801 patients. We observe that income inequalities translate into health service inequalities. We find evidence of two distinct types of bypassing activities in Chad: (1) patients from low-income households bypass high quality facilities they cannot afford and go to low-quality facilities, and (2) rich individuals bypass low-quality facilities and aim for more expensive facilities which also offer a higher quality of care. These significant differences in patients' facility choices are observed across income groups as well as between rural and urban areas.