Design of Online Healthcare Platforms: Motivating Doctors and Benefiting Patients

Abstract

Online health has emerged as a critical component of the healthcare system. This paper empirically investigates how online health platforms create value for patients and doctors and explore how market designs influence value creation. We develop a structural demand and supply model for an online health market that is characterized by patients' trade-offs between service price and quality as well as doctors' endogenous decisions of the service price and quality, driven by both their pro-social and monetary incentives. Applying the proposed model to a large dataset from a leading Chinese online health consultation platform, we recover patients' preference for the service quality and price sensitivity as well as doctors' heterogeneous pro-social and monetary incentives. Counterfactual analysis suggests that a two-point uniform pricing policy performs better in increasing patients' healthcare accessibility, reducing accessibility inequity, and improving patients' and doctors' payoffs than the current individually-determined pricing strategy and a uniform low pricing strategy.

Keywords: online health, monetary incentive, pro-social incentive, health consultation, platform markets