Social connections and tertiary health-care utilization

The use of tertiary health care by socially proximate peers helps individuals learn about program and treatment procedures, signals that using such care is socially appropriate, and could support the use of formal health care, all of which could increase program utilization. Using complete administrative claims data from a publicly financed tertiary care program in India, we estimate that the elasticity of first-time claims with respect to claims by members of caste groups within the village is 0.046, with smaller effects of more socially distant individuals. The point elasticity of inpatient care expenditure with respect to claims filed by the same group in village peers in the previous quarter is $$ 0.035. We find support for an information channel as peers increase awareness of the program and its features. Our findings have implications for the development of network-based models to determine health-care demand, as well as in use of network-based targeting to boost tertiary health-care utilization.