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Contents Introduction

In India, households’ use of healthcare services is a puzzle. The puzzle is as follows. Even though most private healthcare providers have no formal medical qualifications, a significant fraction of households uses fee-charging private healthcare services, which are not covered by insurance. While the absence of public healthcare providers could, in part, explain the high use of the private sector, this cannot be the only explanation. The private share of primary healthcare use is higher even in the market with a qualified doctor offering free care through public clinics, and still majority of primary healthcare visits are made to providers with no formal medical qualification. This paper examines the reasons for the existence of such a puzzle in India. Combining contemporary household-level data with archival records, I examine the aggressive family planning program implemented during the emergency rule in the 1970s and explore whether the coercion, disinformation, and carelessness under which the program was undertaken could partly explain the puzzle. Exploiting the timing of emergency rule, state-level variation in the number of sterilizations, and an IV approach, I show that the states heavily affected by sterilization policy have a lower level of public healthcare usage today. I also provide the mechanism for this practice showing that the states heavily affected by forced sterilization have a lower level of confidence towards the government hospitals and doctors and a higher level of confidence towards private hospitals and doctors in providing good treatment.