Design of Online Health Care Platforms: Motivating Doctors and Benefitting Patients
December 04 2020
Status: Working paper
Abstract
Online health has emerged as a key component of the healthcare system by provid- ing healthcare services distantly. In this paper, we empirically investigate the market design of online health platforms to understand how to effectively motivate doctors’ participation and simultaneously improve patients’ accessibility to healthcare resources and welfare. We develop a structural demand and supply model for an online health market that is characterized by patients’ tradeoff between service price and quality as well as doctors’ endogenous decision, driven by both their prosocial and financial incen- tives, about service price and quality. Applying the proposed model to a large dataset from a leading Chinese online health consultation platform, we empirically estimate doctors’ prosocial as compared to financial incentives. To the best of our knowledge, we are the first to provide such estimates in a field setting. As expected, we show that patients value service quality, and doctors find it costly to provide high-quality service, but we also demonstrate considerable heterogeneity in patients’ valuation for service and in doctors’ cost to provide high-quality service and their prosocial intensity. Counterfactual analysis of a uniform low pricing policy suggests that it can significantly improve patients’ accessibility. However, a two-point uniform pricing policy that allows high-quality doctors to charge a higher price can improve patients’ accessibility and increase consumer welfare as compared to a one-point policy.
Keywords: online health, financial incentive, prosocial incentive, healthcare inequality, healthcare accessibility