The literature on health care utilisation has focussed on the interaction of supply and demand factors in determining utilisation. At the aggregate level, studies have modelled the simultaneity of demand and supply, and different methods have been used. This study proposes an alternative framework for modelling utilisation, which yet separates demand and supply factors, the disequilibrium theory of demand and supply. This theory is useful in modelling data that reflect that not all health care demand is met by health care providers and not all health care supply is taken by consumers. Such disequilibrium arises due to rigid prices and quantity rationing. We use the theory to model maternal health care utilisation and user fee exemption at mission health care facilities in Malawi. The study uses switching regression methods and data from the Malawi Health Management Information System. Results show that user fee exemption is associated with increased utilisation of maternal health care. Demand and supply regime classification shows that many of the health facilities met much of the demand, whereas the rest only provided as much maternal care as their maximum capacity. In the latter case, intended maternal health care utilisation targets may not have been met.
Keywords: Malawi; demand; disequilibrium; supply; user fee exemption; utilisation.
© 2019 John Wiley & Sons, Ltd.