Delivering Multi-Specialty Care via On-Demand Telemedicine Platforms

Abstract

The on-demand telemedicine platforms represent a rapidly growing segment of the healthcare industry. In this paper, we examine a key feature of such multi-specialty telemedicine platforms, namely, the presence of interaction between the demand for general and specialized care. Although this type of demand interaction is common in healthcare practice, its impact on platform decisions has not yet received sufficient attention in the operations literature. To study the impact of demand interactions, we develop and analyze a model that combines the decisions by patients, physicians, and the platform, and contrast it with the no-interaction benchmark setting. We find that for moderately compensated specialists, the demand interaction between the general and specialized care lowers the barrier for specialists to join the platform, but also that the benefits of demand interaction subside as specialist wage levels increase. Moreover, we show that when the benefits of demand interaction originate from higher valuations that general patients attribute to specialized care, the platform always sets a higher price under the demand interaction setting than in the benchmark setting. On the other hand, when the benefits originate from the lower waiting cost of general patients, the platform always offers lower wages to physicians. Finally, we compare our main model under the optimal wage contract with the fixed commission rate contract. We find, interestingly, that with the fixed commission rate contract, demand interaction may lead to a win-win-win outcome for all three parties (i.e., the platform, patients, and physicians), which can never be achieved under the optimal wage contract.

Keywords: telemedicine, healthcare, demand interaction, online platforms