Managing Outpatient Service with Strategic Walk-ins

66 Pages Posted: 27 Apr 2020

See all articles by Nan Liu

Nan Liu

Boston College - Carroll School of Management

Willem van Jaarsveld

Eindhoven University of Technology (TUE)

Shan Wang

Sun Yat-sen University

Guanlian Xiao

University of Calgary - Haskayne School of Business

Date Written: March 7, 2020

Abstract

Outpatient care providers usually allow patients to access service via scheduling appointments or direct walk-in. Patients with acute symptoms are likely to walk in and other patients strategically choose between these two access channels (and otherwise balking) based on the trade-off of appointment delay and in-clinic waiting. While patients cannot know the exact in-clinic wait time beforehand, they may base their decisions either on the exact appointment delay or on the expected appointment delay (depending on how the provider schedules appointments). Taking into account such patient strategic choice behavior, we study how a provider can best manage her practice by controlling service capacity and the delay information revealed to patients. To optimize operational efficiency, the provider should adopt a "bang-bang" type of capacity control: If exact delay is observable, patients would schedule appointments whenever the delay is sufficiently short, but at optimality the provider should not let patients mix between walk-in and balking when the delay is long. If exact delay is unobservable, the provider should induce a pure strategy among strategic patients. Depending on whether the provider can freely adjust her capacity, she should offer delay information in a remarkably different, and to some extent, opposite manner. Specifically, when the capacity is predetermined and cannot be changed, then "hiding" exact delay benefits the provider only if strategic demand is relatively small, otherwise exact delay should be revealed to patients. However, when the provider can optimize her capacity, then "hiding" exact delay only benefits her when strategic demand is large and patients are sensitive to in-clinic waiting.

Keywords: customer strategic behavior, appointment scheduling, walk-ins, queueing models

JEL Classification: C44, C61, M10, I10

Suggested Citation

Liu, Nan and van Jaarsveld, Willem and Wang, Shan and Xiao, Guanlian, Managing Outpatient Service with Strategic Walk-ins (March 7, 2020). Available at SSRN: https://ssrn.com/abstract=3558209 or http://dx.doi.org/10.2139/ssrn.3558209

Nan Liu (Contact Author)

Boston College - Carroll School of Management ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

HOME PAGE: http://sites.google.com/site/nanliuacademic/

Willem van Jaarsveld

Eindhoven University of Technology (TUE) ( email )

PO Box 513
Eindhoven, 5600 MB
Netherlands

Shan Wang

Sun Yat-sen University ( email )

135 Xingang Xi Road
J.T. Wu Hall 320
Guangzhou, Guangdong 510275
China

HOME PAGE: http://wangshan731.wixsite.com/shan

Guanlian Xiao

University of Calgary - Haskayne School of Business ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

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