The effect of health facility ownership on perceived healthcare quality: evidence from Ghana

Whether private healthcare providers should be encouraged over public providers remains unclear. On the one hand, because private providers are profit-driven, they are more motivated to compete for demand by enhancing quality if demand is elastic. However, because they are more motivated to maximize revenue, they may sacrifice quality to maximize profit. A crucial factor in determining whether private providers should be encouraged is the extent to which their quality exceeds or falls short of that of the public provider. This study, therefore, investigates whether the public and private differ in providing quality healthcare services using the 2014 Ghana Demographic and Health Survey. Our measure of healthcare quality is based on patient satisfaction level with nine healthcare services (cleanliness, waiting time, comfort and safety, consultation time, privacy, listening, explanation, treatment advice and confidentiality) provided by public and private healthcare facilities. We applied an instrumental variable approach to account for endogeneity issues related to the patient’s choice of healthcare provider. We find that private facility users have a higher probability of being very satisfied with “waiting time”, “consultation time”, “listening”, “cleanliness”, “comfort and safety”, “confidentiality”, and “privacy” than public users, thus suggesting that private facilities provide better service than public. We thus recommend encouraging the private sector to enter the healthcare market. We also find that failing to account for endogeneity in provider choice when estimating the effect of healthcare facility ownership on healthcare service quality underestimates the effects.