Word of Mouth Matters for Healthcare

Word of Mouth Matters for Healthcare

What drives uptake of tertiary healthcare services? Word of mouth effects may have an important role to play, say Professor Chirantan Chatterjee and his co-authors.

Hospitals across India set up many free health check-ups every year. Health activists often run campaigns on ways to screen diseases such as breast cancer and cervical cancer. Despite such efforts, awareness about many diseases remains low. Uptake of necessary treatment is also therefore poor. On the other hand, mortality rates in India for life threatening diseases are high. World Health Organisation data shows that every seven minutes, a woman in the country loses her life to cervical cancer. One out of every two women diagnosed with breast cancer does not survive.

Recent work by Chirantan Chatterjee, Assistant Professor of Economics and Public Policy at the Indian School of Business and his co-authors Radhika Joshi, Neeraj Sood and P Boregowda addresses the puzzle of low uptake. The authors highlight how patients rely on the experiences of family members and neighbours to evaluate the benefits of a treatment. This word of mouth effect can be a powerful medium for generating awareness and uptake of healthcare. This applies even more in contexts where the government pays for healthcare through universal health coverage schemes.

The study leverages administrative data from state sponsored health insurance program called the Vajpayee Arogyashree Scheme (VAS) in the state of Karnataka. The scheme provides free tertiary care to the rural poor and has been running since 2009. Such tertiary care coverage includes fields such as cardiology, oncology, neurology etc.

Health policies that promote greater use of healthcare over time can also increase treatment uptake. For instance, in the VAS setup, a treated patient is periodically contacted and motivated by hospital personnel to avail follow-up care. Physicians get a monetary incentive for each follow-up treatment. Health camps and advertisements also contribute to a rise in awareness and uptake. Controlling for the interference of such factors, the research team showed that one new hospitalisation today results in 0.35 additional future hospitalisations for the same condition in the same locality. The authors argue that since they controlled for idiosyncratic factors related to disease, location and time, word of mouth is what drives this result.

As one would expect, word of mouth has a stronger impact in localities with high population density. A single new hospitalisation in a less populous locality results in 0.28 extra hospitalisations in the future. A hospitalisation in a high population locality results in 0.41 more future hospitalisations. In addition to strong impact on uptake within localities, the study shows that word of mouth of successful treatments in one locality positively impacts uptake of care in neighbouring localities as well.

The Government of India has long designed insurance schemes with heavily subsidised care to reduce the financial burden on the poor. The recently announced National Health Protection Scheme (NHPS) is one such scheme. It is intended to benefit 10 crore poor families. This enormous coverage makes it the largest national health insurance plan in the world. This study reveals the powerful role that such schemes can play in the diffusion of healthcare information through word of mouth. Any cost-benefit analysis of insurance programmes must account for this previously unnoticed role.

The authors encourage future researchers to explore the nature of word of mouth and its variation in the health insurance setting in more detail. This will help in designing better campaigns and better health coverage schemes.

About the Researchers:
Chirantan Chatterjee is Assistant Professor in the Economics and Public Policy area at the Indian School of Business, where he is also a Research Fellow at the Bharti Institute of Public Policy and Max Institute of Healthcare Management.
Radhika Joshi is a visiting faculty member at Gokhale Institute of Politics and Economics.
Neeraj Sood is the Director of Research at Schaeffer Centre and Professor of Public Policy at Sol Price School of Public Policy.
P. Boregowda is the Executive Director of Suvarna Arogya Suraksha Trust (SAST).

About the Research:
Chatterjee, C., Joshi, R., Sood, N. and Boregowda, P., 2018. Government health insurance and spatial peer effects: New evidence from India. Social Science & Medicine, 196, pp.131-141.

About the Writer:
Himasagar is a Research Associate at Indian School of Business, where he also works as an Analyst with the Max Institute of Healthcare Management.

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