Service competition in two-tier healthcare markets with heterogeneous patients balking
Recently, public and private providers within two-tier healthcare markets have engaged in a fierce competition for patients, which is significantly influenced by patients' multifaceted sensitivities to delays and payments, particularly when patients' potential balking is considered. Howeve...
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| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
KeAi Communications Co., Ltd.
2025-03-01
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| Series: | Journal of Management Science and Engineering |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2096232024000441 |
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| Summary: | Recently, public and private providers within two-tier healthcare markets have engaged in a fierce competition for patients, which is significantly influenced by patients' multifaceted sensitivities to delays and payments, particularly when patients' potential balking is considered. However, existing literature studying the two-tier healthcare market often presupposes patients as homogeneous or one-dimensionally heterogeneous, and neglects their balking behavior. In stark contrast, this paper delves into the combined effects of patients’ delay- and payment-sensitive heterogeneities, alongside their joining or balking decisions, on the service competition dynamics within the two-tier healthcare market. Leveraging a game-theoretic framework, we initially derive subgame equilibria, both inclusive and exclusive of patient balking, uncovering that patient balking can lead to a subgame perfect Nash equilibrium in the presence of two-dimensional patient heterogeneity. Intriguingly, our findings further suggest that the non-profit public provider may, counterintuitively, curtail its service capacity despite budgetary adequacy, contradicting the conventional assumption that such providers would fully allocate funds towards patient care. Ultimately, from a patient welfare standpoint, we find heightened payment heterogeneity discrimination proves detrimental to patients, whereas increased differentiation in delay heterogeneity benefits them. This revelation underscores a pressing social issue inherent in the two-tier healthcare market model: It has the potential to exacerbate healthcare disparities rooted in economic inequalities within the population. |
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| ISSN: | 2096-2320 |