metadata: authors: 0: author: Paqueo, Vicente B.
1: author: Gonzalez, Christian Y.
count: Mexico
docna: 0: docna: Economic analysis of health care utilization
            and perceived illness ; ethnicity and other factors
docty: Policy Research Working Paper
subtopic: Health Care Services Industry,Health Economics & Finance,Health Service Management and Delivery,Educational Sciences,Health Insurance
teratopic: Gender
abstracts: cdata!: Paqueo and Gonzalez look at the
            determinants of health-seeking behavior of the Mexican
            population and within this context focus on the effect of
            ethnicity. They address the following questions: To what
            extent are the indigenous people at a disadvantage health
            care-wise and in what particular health services are they
            disadvantaged? Is the health care gap due to indigenous
            cultures by itself as opposed to the impact of socioeconomic
            differences? What policy instruments can be used to reduce
            the gap? The authors find that contrary to expectations, the
            indigenous people in Mexico tend to have a positive behavior
            toward modern preventive care compared with the
            nonindigenous population, holding socioeconomic factors
            constant. Apparently, there is no cultural barrier in regard
            to these services. But ethnicity remains negatively
            associated with the use of inpatient hospital care and
            medical and dental consultations. Insurance has a
            significant and positive effect on health care use.
            Therefore, it appears to be an effective instrument for
            addressing the health care disadvantages faced by the
            indigenous population in regard to inpatient care and the
            use of outpatient services of doctors, nurses, and dentists.
geo_reg_key: 119228,517191
repnme: repnme: Economic analysis of health care
            utilization and perceived illness ; ethnicity and other factors
display_title: Economic analysis of health care
            utilization and perceived illness ; ethnicity and other factors
listing_relative_url: /research/2003/08/2511637/economic-analysis-health-care-utilization-perceived-illness-ethnicity-other-factors
topicv3: Preventive Care m1326360 1306,Education m1327048 470,Health Services Delivery m1327294 1305,Health Insurance m1327759 1287,Health m1504661 3480
publishtoextweb_dt: 2010-07-01T00:00:00Z
historic_topic: Gender
origu: Development Research Group (DECRG)
no_of_pages: 28
model_extractions: I POLICY **RESEARCH WORKING PAPER** 3125

# **Abstract**

Paqueo and Gonzalez look at the determinants of healthseeking behavior of the Mexican population and within this context focus on the effect of ethnicity. They address the following questions:

* To what extent are the indigenous people at a disadvantage health care-wise and in what particular health services are they disadvantaged?

* Is the health care gap due to indigenous cultures by itself as opposed to the impact of socioeconomic differences?

* What policy instruments can be used to reduce the gap?

behavior toward modern preventive care compared with the nonindigenous population, holding socioeconomic factors constant. Apparently, there is no cultural barrier in regard to these services. But ethnicity remains negatively associated with the use of inpatient hospital care and medical and dental consultations. Insurance has a significant and positive effect on health care use. Therefore, it appears to be an effective instrument for addressing the health care disadvantages faced by the indigenous population in regard to inpatient care and the use of outpatient services of doctors, nurses, and dentists.

The authors find that contrary to expectations, the indigenous people in Mexico tend to have a positive This paper-a product of the Social Protection Sector Unit, Latin America and the Caribbean Region-is part of a larger effort in the region to draw on lessons from Mexico on the provision of health services to indigenous people. Copies<sup>of</sup> the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Roberto Guzman, room I7-168, telephone 202-473-2993, fax 202-676-0319, email address rguzman@worldbank.org. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted at vpaqueo@worldbank.org or cgonzalez@worldbank.org. August 2003. (24 pages)

> _The_ **_Policy Research Working Paper Series disseminates_** _the_ **_findings eork_** _of_ **_in progress to encourage the excaamge_** _of_ **_ideas about development issues. An objective_** _of_ **_the series is to get the findings out quickly, even if the presentations are less than_** _fully polished._ **_The papers carry the names_** _of_ **_the authors and should be cited accordingly._** _The_ **_findings, interpretations,_** _and conclusions expressed in this paper are entirely those of the autbors. They do not necessarily represenit the viewo of the World Bank, its Executive Directors, or the countries they represent._

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# Economic Analysis of Health Care Utilization and Perceived Illness: Ethnicity and Other Factors

Vicente B. Paqueo and Christian Y. Gonzalez _World Bank, 1818 H Street NW Washington DC 20433, USA_ vyaqueo(&iworldbank.org cgonzalez(aworldbank.orz
# **Economic Analysis of Health Care Utilization and Perceived Illness: Ethnicity and Other Factors**

_By Vicente B. Paqueo_ and _Christian Y. Gonzcilez'_

# **Introduction**

Mexico has the largest indigenous population in the Americas. Estimates of the size of the indigenous population vary, depending on its definition. But based on usage of languages other than Spanish (there are more than 60 of them), official estimates point to a population size of at least 8.4 million in 2000, which is roughly 8.6 percent of the total population. Of the 2,443 municipalities, 803 can be classified as "indigenous" in the sense that they constitute more than 30 percent of their population.<sup>2</sup> The indigenous people includes descendants from the diverse ethnic groups that made up the Aztec empire such as the Nahua, the Maya, the Zapotecs, the Mixtecs, the Totonacs and the Tarascos.

Over the years, many of Mexico's indigenous populations have managed to maintain their own language, culture and traditions. Land is central to life, culture, and history - and determines to a large extent the survival of indigenous peoples, as well as their standards of living, health and nutrition.

There has been a rising concern on the need to give greater special attention to Mexico's indigenous population. The principal reason is that they lag way behind other groups economically and socially. For example, eighty-eight percent of those indigenous municipalities have been classified as highly marginalized or very poor.<sup>3</sup> The degree of poverty is even worse for the 13,000 localities with more than 70 percent of its population speaking indigenous languages. Further, compared to the national average, the living conditions of the indigenous population are lower, as measured by per capita income, employment, health indicators, education, access to basic water, sanitation, housing, and food availability. It is remarkable that the seven states with the highest incidence of poverty - Chiapas, Oaxaca, Guerrero, Hidalgo, Veracruz, San Luis Potosi, and Puebla - coincide with the indigenous municipalities of highest marginality.<sup>4</sup> This study examines the _Encuesta Nacional de Salud 2000_ and analyzes the determinants of health service utilization and illness as assessed by the respondents. Its objective is to quantify the gap in health care utilization and understand better the nature of the gap and its causes. The analysis takes a broad view in approaching its objective. It looks at the determinants of health-seeking behavior of the general Mexican population and within this context it focuses on the effect of ethnicity. In the multivariate

> 'Opinions in this paper are those of the authors and do not reflect official positions of the World Bank. We received helpful comments from Maria Luisa Escobar and Panagiota Panopoulou, who are neverthe'less not responsible for any remaining errors. Also, we would like to thank Roberto Guzman for his assistance. 2Programa Nacional de Desaffollo de los Pueblos Indigenas, 2001-2006

> 3Programa Nacional de Desarrollo de los Pueblos Indigenas, 2001-2006

> 4World Bank (2001), Third Basic Health Care Project (PROCEDES), Project Appraisal Document

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econometric method used in this paper to analyze the effect of ethnicity, relevant economic, demographic, and environmental factors were taken into account. The questions to be addressed in this regard are: To what extent are the indigenous people at a disadvantage health care-wise and in what particular health services are they disadvantaged? Is the health care gap due to indigenous culture _per se_ as opposed to the impact of socioeconomic factors such as wealth, health insurance coverage, education and access cost?

The paper is structured as follows. First, it presents background information, laying out a stylized comparison of the indigenous versus non-indigenous population. Second, it describes the methodology and the data used for the analysis. Third, the econometric results are presented and analyzed. Finally, in the conclusion, the report summarizes its findings and their implications.

# **The indigenous population and the health challenge.**

As elsewhere, the health status of Mexico's indigenous population has lagged behind that of other population groups. A World Bank appraisal report (2001) highlighted this health gap. On this, the National Development Program for the Indigenous Population (NDPIP), 2001-2006, indicate that the infant mortality rate among the indigenous people is 58 percent higher than the national average. And their life expectancy appears to be only about 69 years in contrast to the national average of 74 years.

Infectious diseases, malnutrition, vector-borne diseases and other illnesses associated with poverty and underdevelopment have been a major cause of the health gap. The NDPIP 2001-2006 reveals that chronic malnutrition among indigenous children less than 5 years old is 44 percent compared with the national average of only 17.7 percent. Moreover, the indigenous maternal mortality rate appears to be about triple that of non-indigenous mothers. Further, the World Bank appraisal report (2001) indicates that in the 1990s the national infant mortality due to infectious diseases stood at only 27.3 percent, while the rate for the indigenous population reached 83.6 percent.

Access to health services by the indigenous population remains a key issue, although data indicates that significant progress has been made in this regard. In 1991 there were only 537 primary health care centers and four secondary level health units in communities largely populated by indigenous groups. In 1997, these figures rose to 2,095 and 31 units, respectively. Nevertheless, these communities apparently continue to be at a disadvantage. For example, in the indigenous communities in Oaxaca the number of doctors per 1000 indigenous people is only 0.13 compared to 0.93 for the state as a whole. In regard to hospital beds, the figures for Oaxaca, Veracruz, and Puebla are only 0.07, 0.11 and 0.19 beds per 10,000 inhabitants in the indigenous areas, respectively - compared to the national average of 0.79. Further, the NDPIP has pointed out that 87 percent of the inhabitants of communities classified as indigenous are not covered by social security services.

4
Historically, there were little systematic and comprehensive efforts to develop programs that were specifically directed at the indigenous people as such. This fact does not mean that the health problems of the indigenous people were ignored. Rather,<sup>they</sup> were addressed as part of government efforts to improve the health of people in<sup>the rural</sup> and marginalized (disadvantaged) communities. Given that the indigenous people<sup>were</sup> largely located in these communities, they should in principle benefit from these programs. A list of these programs in relation to the evolution of Mexico's health<sup>policy</sup> is presented in "The Health Care System in Mexico."<sup>5</sup> Notable examples of<sup>these</sup> programs currently include IMSS-Solidaridad, PAC (Programa de Ampliaci6n de Cobertura) and, more recently, PROGRESA (now called Oportunidades).<sup>The focusof</sup> those efforts has largely been on the promotion of primary health care such as maternal and child care, control of vector-borne diseases, health education, family planning, nutrition, immunization and other preventive care.

Many of these programs to a considerable extent took into account the indigenous people's particular circumstances, despite the government's lack of explicit targeting. These programs follow in principle a health care strategy that calls for mobilization<sup>of</sup> local resources and greater sensitivity to community constraints and preferences.<sup>Within</sup> this context, government supported initiatives (such as the promotion of traditional medicine and training of birth attendants) that could be expected to facilitate<sup>directlythe</sup> health care of indigenous groups.

Nevertheless, because the indigenous communities _per se_ were not considered as an explicit target population, it has been argued that not enough attention<sup>has been paid to</sup> their social and cultural characteristics. Moreover, not enough resources have been allocated to their health care. A rough estimate by the Subsecretaria de Egresos<sup>de</sup> Hacienda indicates that in 2002 the amount of Federal spending per capita<sup>going tothe</sup> indigenous population was only 128 pesos per year, which is-only about a third of<sup>the</sup> IMSS-Solidaridad average.

In conclusion, it can be argued that the health gap between the general and the indigenous population is due to the economic and social disadvantages suffered by<sup>the</sup> latter. But it can also be argued, as commonly believed, that the health gap<sup>might also be</sup> due to government failure to focus on the need to take more fully into account<sup>the social</sup> and cultural conditions of the indigenous population<sup>6</sup> . More generally, it can<sup>be</sup> hypothesized that demand for modern health services is relatively low among the indigenous people because of the failure of the health system to adapt its health services to their cultural heritage and circumstances. The implication is that there is a<sup>need to</sup> develop a health strategy that directly and explicitly focuses on the health problems<sup>of the</sup> indigenous people and tailors health interventions more adequately to their specific cultural and social conditions. This point of view is supported by the 2001 constitutional reform that now explicitly recognizes the obligation of the state to ensure that these groups have access to effective health care - one that is tailored to their particular conditions and takes advantage of their traditional medicine and cultural heritage.

> 5 Financing Health Care, Volume 22, National Economic Research Associates, 1998. 6(World Bank (2001), Third Basic Health Care Project (PROCEDES), Project Appraisal Document

5
# **The conceptual framework.**

A household production model guides the empirical analysis carried out in this study. In this model, which is illustrated graphically in Chart 1 (below), health and other commodities such as child education are produced, given existing knowledge and technology, by a combination of market goods and time inputs by household members. For example, given the environmental health threats surrounding a household (e.g. the presence of malaria and dengue in a community), the health status of a child can be thought of as the result of a combination of health care services, goods, and mother's time devoted to childcare. Taking into account its budgetary and other constraints, a household is assumed to choose that level of health for its members and that amount of consumption of other commodities that maximize its welfare. The demand for preventive, curative and other health services can then be expressed as a function of household wealth, the price of health services, the environmental health threats, and other exogenous factors such as education, age and culture that either affect the production function, the resource constraint, or the household's utility function. In principle, the same exogenous factors determine the health status of household members.

> To estimate the effect of ethnicity and other exogenous variables, a logit model

> is used for its convenience in the interpretation of the regression estimates. From the household production model, these results are expected:

- Since health is a normal commodity, household wealth is expected to have a positive impact.

- Health insurance increases demand for health care, since it reduces the price of health service use.

- The time (distance) it takes to access a health service reduces the use of that service; it may, however, increase the use of other health services, depending on whether they are substitutes or complements.

- Greater public health threats due to the presence of malaria and dengue as well as lack of potable water are likely to raise demand for preventive and curative services.

- Education is likely to increase demand for health services as it raises the productivity of health production, the household's appreciation of the benefits of better health care, and its potential labor market earnings (Although theoretically education could reduce health service utilization by increasing the opportunity cost of time devoted to health care, most studies show that education have a positive effect, implying that its opportunity cost effect is less than the other putative effects of education.)

If an objective measure of health status were available and used as a dependent variable, it can be shown that the effects of the above-mentioned variables on health status would parallel their effects on health service utilization. For example, increased wealth, insurance coverage and reduced public health threats are expected to decrease morbidity. In this study, however, the illness data are based on the respondent's 6
assessment or perception of illness, which surely has a subjective element that needs to be taken into account in the interpretation of the empirical results.

Perceived illness is arguably determined by a person's experience of a physical or psychological condition that is limiting his ability to function normally. But what a person considers normal functioning and when he considers a restriction on that functioning an illness depends not only on the actual experience of a disease, but also on cultural norms regarding the definition of illness. It is difficult to have an objective definition of those norms. From casual observation, however, it can be argued that the norm for long-suffering people (e.g. the poor and marginalized indigenous population) is to be tough and, therefore, they might not report minor inconveniences as illness. On the other hand, these inconveniences are more likely to trigger a feeling of ill health for people with high income and insurance coverage. Hence, it is possible that wealth,<sup>health</sup> insurance and being non-indigenous would be correlated positively (instead of negatively) with reported illness.

7
Chart 1

# **An Economic Model of Health Production and Health Care Demand**

<!-- Start of picture text --> Environmental health<br>threats<br>> Malaria Production:<br>> Dengue Health _<br>> Water quality Health status<br>^ . ~~~~~Individual and<br>/ ~~~~~~~family welfare<br>Health care services: .n/<br>input demand<br>> Preventive<br>> Curative Production:<br>o Outpatient Other com-<br>o Inpatient modities A<br>o Doctors/nurs<br>es/dentists<br>> Traditional<br>Household<br>members' time<br>inputs<br>Constraints<br>Household budget<br>> Household wealth<br>> Time available<br>> Prices of health care services and market goode<br>> Opportunity cost of health care<br>Knowledge<br>> Education<br>> Information access<br>Cultural norms<br>Age and household structure<br><!-- End of picture text --> 8
# **Description of survey and variable definitions**

The survey used in this paper is _Encuesta Nacional de Salud 2000._ The<sup>sample of</sup> this module consists of 190,214 observations (96,958,975<sup>observationswhen weighted</sup> data are used). After cleaning the dataset 173,600 observations<sup>were leftfor analysis.</sup> To make sure that the sample was representative a comparison of<sup>somegeneral</sup> characteristics from the survey with the 2000 Census was done. By<sup>employing INEGI's</sup> definition of indigenous people, which employs the use of<sup>anindigenous languageas the</sup> main criteria, around 10 percent of the population on this survey can<sup>be considered</sup> indigenous. As mentioned, the 2000 Census classified some<sup>8.4 million peopleas</sup> indigenous (8.6 percent), which implies that our sample is largely<sup>consistent.Also</sup> according to the 2000 Census, the age average is around 20-24<sup>years,while in the sample</sup> it is around 25.4. Although there is a difference, it is not too big. The number of education years reported in our sample is a little bit below the<sup>nationalaverage.And,the</sup> percentage of men in our sample is similar to the Census estimates.<sup>Because the</sup> differences between our sample and the Census figures are<sup>small,it wasdecided to</sup> continue the analysis. Table 1 describes the variables employed.

Table 2 shows the descriptive statistics between indigenous and<sup>non-indigenous</sup> population. From this table it can be seen that the indigenous are<sup>poorer,youngerand</sup> less healthy than the non-indigenous. They have a lower level of<sup>educationand bad living</sup> conditions. Moreover, they have less health care service utilization,<sup>with the exceptionof</sup> preventive care services.

Table 3a shows the descriptive statistics between age groups, while<sup>Table3b</sup> presents the utilization rate for preventive care, medical consultations<sup>and dentalservices,</sup> and hospitalization by urban and rural residence. It can be seen from<sup>Table3a, on one</sup> hand, that children between 0-5 years old have the highest health<sup>care serviceutilization</sup> than any other age group, and in particular preventive health<sup>care utilization.From Table</sup> 3b, on the other hand, it can be gleaned that while the urban<sup>population has a higher</sup> hospitalization rate, the rural residents surprisingly have a higher preventive<sup>care</sup> utilization. Besides, there is no statistical difference between<sup>urbanand rural ratesin</sup> medical and dental consultations.

9
# **Regression Results.**

**Health service use.** A number of health service utilization equations were estimated. Tables 4, 5 and 6 depict estimates for modem preventive care (PREVENUT), medical consultations and dental services (MODERMED), and inpatient hospital care (HOSPU), respectively. Each of these regressions were estimated for children aged 0-5 and 0-17, adult persons 18 years old and over, and women in childbearing age 15-49.

The results presented in these tables are consistent with the economic model of health care demand outlined above. In general, health insurance, wealth, education, and time-price variables are statistically significant and their regression coefficients have the expected signs.

In regard to the use of preventive care, health insurance appears to have a highly powerful impact. The odds of preventive care use are 13-17 percent for children with health insurance coverage than comparable kids without. These odds for adults with health insurance increase even more by about 37.5 percent. The coefficient of the distance variable also indicates that a half hour increase in the amount of time needed to reach providers of preventive care tend to decrease the odds of use of this service by about 6 percent. Individuals belonging to a large household tend to use less preventive services. An additional household member reduces the odds of preventive care use by about 5 percent for all demographic groups. As expected, the odds for an individual living in mosquito-infested area is about 16.1-23.6 percent higher relative to comparable persons.

Although the wealth index and education variable are positive and statistically significant for the above-mentioned demographic groups, its impact appears to be quite small. One possible explanation is that the educational and outreach programs of the government promoting low-cost but effective preventive care might have loosened up the income and price effects on the use of this health service.

The regression estimates show two surprising results. One is the finding (contrary to usual assertions) that the coefficients for the indigenous variable (Hhindig) are significant and positive for all demographic groups. The results indicate that, _ceteris paribus,_ the odds of preventive care use rises by 15.5-19.2 percent and 28.4 and 30.3 percent for indigenous children and adults, respectively. The other surprise is the negative impact of living in urban areas. It appears that, holding other things constant, the odds of a person living in an urban area and using preventive health care services is less than that of a rural individual - 23.6 percent and 29.9 percent for children aged 0-5 and women aged 15-49. One possible explanation of these findings is that the intensification of government efforts over time (such as IMSS-Solidaridad, PAC and PROGRESA among others) to promote community-based primary health care in rural and marginalized areas might have now put rural and indigenous population groups in a relatively more advantageous position, holding health insurance and other differences constant. Anyway, whatever the reason for the above findings, its implication is that whatever cultural 10
disadvantages might had been associated with being rural and indigenous have been largely overcome insofar as modem preventive care is concerned.

In contrast, in the case of utilization of medical consultations and dental services (modermed), ethnicity has a significantly negative sign, as expected (Table 5). This variable incidentally is simply defined here as the utilization of doctors, nurses, or dentists. The negative impact of the ethnicity variable on the odds of medical and dental services utilization is considerable - about 14.0 percent for children 0-17 years old and 18.6 percent for adults (15.2 percent for women in the reproductive age). And it is interesting that in comparison to the preventive care regressions, the urban effect on medical and dental consultations is negative but not significant. As in the previous equations, however, mosquito infestation increases the use of these medical and dental services - it is particularly considerable for children.

The hospital utilization estimates (Table 6) provide an even more dramatic contrast to preventive care results. The ethnicity variable shows a large negative coefficient, indicating a marginal difference in inpatient hospital utilization of about 65.7 percent between the indigenous and non-indigenous population. This difference rises to 84.9 percent for children aged 0-5. These estimates also show that urban-rural difference in hospital utilization is substantial (14-20.7 percent) and statistically significant. It is also remarkable that the positive health insurance effect seems quite large at about 32.940.6 percent. The results further indicates that control of mosquito infestation can have a considerable negative impact on hospital utilization (about 36.8-39.7 percent), suggesting that such control could generate potential resource savings from reduced hospital care. In regard to Distance2 (a proxy for the time price of primary care), its positive coefficient shows that closer access of people to primary care services reduces hospitalization cases. A possible explanation is that those services prevent some illnesses from becoming more serious. Or it could be that primary care services are effectively acting as filters to higher-level health care.

The contrasting effects of the health insurance, urban and ethnicity variables can be interpreted as an indication that government efforts to improve access to secondary and tertiary care have not yet broken down existing economic, geographic and maybe cultural barriers to the same extent as the primary health care programs seem to have achieved. Accomplishing the de-linking of hospital utilization from urban residence and ethnicity is clearly much more difficult and expensive. It should be emphasized, though, that it has been appropriate for the government to focus on the extensive promotion of community-based primary health care to rural and marginalized areas.

The question at this point is: Does the negative regression coefficients of ethnicity in the Modermed and Hospu equations represent the effect of a cultural barrier associated with being indigenous? This is an interesting question, considering the apparent absence of a cultural barrier to the indigenous population's use of modem preventive care. Or does the negative coefficient reflect the effects of some unmeasured price and income
factors associated with the ethnicity variable?<sup>7</sup> This study is unable to untangle<sup>these</sup> possible effects.

Nevertheless, the findings strongly suggest that in any case there are economic instruments for reducing those cultural barriers, if they still exist. One such instrument is the provision of health insurance for the indigenous population. As shown in Table 7, health insurance appears to have'a powerful impact on hospital use among the indigenous population. Providing insurance coverage to an indigenous person raises the odds of hospitalization by about 63.1 percent. Consistent with this finding, the wealth effect on hospital demand also appears to be quite considerable. In contrast to its tiny impact on preventive care utilization, an increase in the wealth variable by one unit is associated with a 92 percent increase in the odds of inpatient hospital care use.

**Health status and reported illness.** Moving beyond health service utilization, this section explores, using the same sample, the effects of ethnicity and other variables on people's assessment of their health status and on their reported illness condition.<sup>The</sup> regression results are presented in Table 7 and Table 8.

An examination of Table 8 reveals that holding other things constant, indigenous children and adults tend to assess themselves as healthy (in good or excellent health).<sup>The</sup> odds that they consider themselves healthy is about 10 percent higher relative to comparable non-indigenous persons. One possible explanation is that the indigenous population tends to use more preventive health care services. Alternatively, it<sup>might be</sup> that they are physically and mentally tougher than the non-indigenous people..

As expected, health insurance, education, urban-rural residence, and wealth appear to be significantly positive determinants of perceived health status. For<sup>example,</sup> the odds of being healthy are 9.7-15.2 percent higher for those with health insurance than those without it. Urban residents are associated with about 20 percent higher odds of being healthy. These findings imply reduced perceived health well being for the indigenous population, since most of them live in rural areas and they have lower levels of insurance coverage, education, and wealth. Further, it would appear that individuals feel less healthy in households with open water supply, which constitute about 50 percent of the indigenous population (as opposed to 35 percent for the non-indigenous).<sup>Finally,</sup> it is noteworthy that mosquito infestation reduces significantly perceived health status.

The study examines another measure of health well being, the reported illness (Morb = sick or not). The results are similar in some respects to that of the health status analysis, but different in others. As in the health status analysis, the regression estimates show that mosquito infestation and open water supply tend to raise reported illness;<sup>and</sup>

> 7For example, it might be that on average the indigenous people might have a higher cost of accessing hospital services and medical/dental consultations. Assuming that own price effect on hospital demand is negative<sup>and</sup> cross-price effect on preventive care, it is possible to explain the negative and positive coefficients of the ethnicity on hospital care and preventive services, respectively. A similar explanation can also be developed for the contrasting effects of the urban and rural variable on these services. The current analysis can not rule out these possibilities.

12
urban residence reduces it. Moreover, indigenous people tend to report less illness. In contrast, wealth, education, and insurance appear to be positively correlated with higher odds of illness. These findings confirm the suspicion expressed earlier in the discussion of the conceptual framework that poor people with less education and without insurance coverage tend to have a higher threshold for defining certain inconveniences, discomfort and pain as illness. The implication of these findings is that compared to their more educated and better off counterparts, the poor and indigenous people are more likely to delay examination and treatment of physical ailments before they get worse.

# **Conclusions**

The findings of this study and their implications can be summarized as follows: First, the indigenous people in Mexico, contrary to conventional wisdom, do tend to have a more positive behavior towards modem preventive care. Apparently, there is no cultural barrier in regard to these services; or at least, it can be argued that there are some mechanisms in place that have allowed the indigenous population to overcome cultural barriers (if any exist in the first place) to their use of modem preventive services.

Second, the effect of ethnicity on the use of inpatient hospital care and medical/dental consultations is negative and considerable. An explanation for this finding may be the high time price of using these services for the indigenous population; another may be some hitherto unidentified cultural barrier. The study could not untangle the reasons for this empirical result. Further research is needed to clarify the interpretation of the effect of ethnicity on the utilization of the above-mentioned services. But whatever the reason, the large disadvantage facing the indigenous population should be of great concern.

Third, it would appear that the people in rural areas are using more modem preventive services now than urban residents, due possibly to the effectiveness of Mexico's focus on promoting and expanding community-based primary health care coverage over the years. This finding suggests also the need now to pay greater attention to the promotion of preventive care among the poor and indigenous groups in urban areas. The government's decision to extend Oportunidades to the urban poor is consistent with this suggestion. Moreover, the analysis suggests the desirability of enriching with medical and secondary level services the package of basic health care being delivered to the marginalized rural and indigenous communities.

Fourth, price matters. The positive effect of insurance on health service utilization, which is quite large, is indicative of this proposition. The own price effect on the demand for preventive care is significant. Besides, a decrease in the time cost of accessing primary health services appears to reduce considerably the use of inpatient hospital care and, hence, curative care expenditures. Clearly, then, health insurance appears to be a highly effective instrument for addressing the health care disadvantages faced by the indigenous population in regard to inpatient care and the use of outpatient 13
services of doctors, nurses and dentists. A policy of expanding health insurance coverage to the indigenous people, as part of a policy of universalizing health insurance policy, could greatly improve their health care.

Fifth, improved water supply and greater control of public health threats like dengue and malaria reduce self-reported illness, raises health well being and saves curative resources. This finding illustrates the continued national importance of public health. It also underlines the importance of ensuring that the indigenous population has easier access to potable water supply and that the health system has sufficient resources for better control of public health threats. To illustrate the importance of this issue, a Bank analysis of the Chiapas health sector reveals a serious under-funding of public health activities to control vector-borne diseases, which are largely concentrated in indigenous communities.

The effectiveness of health care services depends on the extent to which they are tailored to the needs, constraints and priorities of individuals and local communities. These factors in turn are determined by historical and socio-cultural conditioning. For this reason, it makes sense to ensure that health programs are sensitive to the distinctive cultural differences among the various demographic groups. There are two approaches to achieve this sensitivity in the choice and design of health services. The first approach is the development of special interventions that are specifically directed to particular issues facing target ethnic groups without changing the structural features of the health system. These interventions are programs that are specially tailored to the diverse traditions and beliefs of target ethnic groups. Many of the current ideas to promote indigenous health to date are generally of this variety. The second approach is to promote reform of the health system structures to give communities and health providers the capability and incentive to tailor their programs to the economic and socio-cultural realities of the target population groups.

It is arguable that to achieve sustained reduction in the health gap between the indigenous and the mainstream population, Mexico needs to follow both approaches. The purpose of the systemic approach is to change the rules governing the public finance and delivery of health services at the federal, state and local levels so that health providers will be enabled and rewarded for reaching out to their intended beneficiaries and tailoring their health services to the needs and cultural background of said consumers.

This approach calls for the support of the following reform ideas: (i) the deepening of the process of decentralization, pushing down more decision rights to local communities, health care providers and consumers; (ii) the transformation of supply to demand-based subsidy (money follows the intended beneficiaries); (iii) use of public and private competition for the delivery of a defined package of basic health services; (iv) expansion of subsidized health insurance coverage of the indigenous and other disadvantaged groups, initially employing public funds currently being used to finance public delivery of services for the open population; and (v) measures that promotes equalization of health subsidy per open population, not to mention increased subsidy for 14
> the marginalized, indigenous communities to compensate for their economic disadvantages.

In principle, these concepts would make the health system more sensitive to the culture and tradition of the various ethnic groups. But how to apply them in reality needs further reflection and pilot testing. Consequently, in thinking about health system reforms, it would be useful to support pilot programs that try out the above ideas in indigenous communities. Finally, considering that the above reforms would benefit the general population without health insurance, advocates of indigenous population development can and should build a strong coalition between the various ethnic groups and those in the open population interested in making publicly financed health services more responsive to local and individual demands.

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