RL or URL: Managing Outpatient (Tele)visits with Strategic Behavior

42 Pages Posted: 12 Apr 2023

See all articles by Nan Liu

Nan Liu

Boston College - Carroll School of Management

Shan Wang

Sun Yat-sen University

Noa Zychlinski

Technion - Israel Institute of Technology

Date Written: March 7, 2023


Problem definition: Many outpatient care providers offer virtual service that patients can access via televisits. Televisits allow patients to wait to be seen in the location of their choice, protected from exposure to ill patients and without going through the trouble of physical travel. There is evidence, however, that televisits are more likely to lead to a supplementary in-person visit, consuming additional resources that could have been saved if the patient’s initial visit was in-person. Given this trade-off, we study whether an outpatient care provider should adopt virtual service and, if so, how best to manage a practice that simultaneously offers both virtual (or URL) and in-person (real-life, or RL) services.

Methodology/results: We develop a stylized queueing-game model, which incorporates patient strategic choice between the two service channels. We study how a revenue-driven provider should allocate capacity between these two channels and how to incentivize patients for in-person visits. We find that the size of the system, measured by the total available service capacity relative to total patient demand, plays a determining role here. Small and large systems are better off focusing on one channel only and have no need to use in-person incentives, whereas medium-sized systems can benefit from offering both channels and in-person incentives. We also find that overall patient access to care may be hurt with the use of in-person incentives, unless the payment gap between the two channels is significantly large.

Managerial implications: Despite the growing adoption of telemedicine, offering virtual service may not be the best choice for all providers. Capacity coordination between the virtual and in-person service channels has to be carefully balanced. Furthermore, in-person incentives need to be used with caution, otherwise patient access to care may be impaired. Proper financial incentives set
up by the payer may prevent such a negative outcome.

Funding Information: Shan Wang is supported in part by the National Natural Science Foundation of China [Grants 72001220]. Noa Zychlinski is supported in part by an Israel Science Foundation grant 277/21 and the Israel National Institute for Health Policy Research, grant 2021/160/R. Nan Liu has no funding information to report

Conflict of Interests: None to declare.

Keywords: healthcare operations management, telemedicine, queueing game, capacity management

JEL Classification: C44, C61, C70, M10, I10

Suggested Citation

Liu, Nan and Wang, Shan and Zychlinski, Noa, RL or URL: Managing Outpatient (Tele)visits with Strategic Behavior (March 7, 2023). Available at SSRN: https://ssrn.com/abstract=4383199 or http://dx.doi.org/10.2139/ssrn.4383199

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/

Shan Wang

Sun Yat-sen University ( email )

Haizhu District
510275 (Fax)

Noa Zychlinski

Technion - Israel Institute of Technology ( email )

Haifa 32000
0778872858 (Phone)
3200003 (Fax)

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