LETTERS TO THE EDITORing the capital and of operating the system.:The analogous question regarding health services is not (as addressed by Dr. Walsh) whether people pay a large amount for health services. Rather, there are two questions: 1) whether the cost of an improved service is less than the cost of the present service; and 2) whether the served population is prepared to pay for the costs of the improved service. With reference to the first question, the Narangwal data cited by Dr. Walshtt suggest that the total annual per capita health expenditures in villages with primary health care programs are greater than the total expenditures in villages without primary health care programs, but that the difference is less than the cost of the primary health care program. With reference to the second question, the evidence is sparse and conflicting. In Malaysia, the source of medical care chosen appears to be responsive to the relative prices of different services,2 while in the Philippines, visit prices appear to have no effect on whether services are used or on which practitioner is chosen.3 In any case, it is evident that at least a portion of the costs of improved health care services can be mobilized from resources presently spent on inferior health care services and that, as in the water supply case, the cost-effectiveness calculations should take account of this.2) The Effectiveness With respect to the impact of water and sanitation projects on diarrheal disease, as noted in our paper' and as confirmed by Dr. Walsh, the typical impact is five to ten times greater than the 5 per cent assumed in the original Selective Primary Health Care calculations.43) The Use of the Cost-Effectiveness Method In our paper it was argued that this use of the cost-effectiveness method is inappropriate when, as in the case of water and sanitation programs, the investments produce a broad mix of benefits. It is thus gratifying to see thai Dr. Walsh explicitly recognizes this and recommends that decisions on investments in the water and sanitation sector should not be made on the basis

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