Reimbursement policy considering patient revisits from online to offline in a public healthcare system

Configuring e-visits has become an effective way to improve patients’ medical experience and reduce medical costs. This paper examines a public healthcare system consisting of a public healthcare provider (HCP) and a funder. The public HCP introduces e-visits to traditional face-to-face service by reallocating existing resources. The funder reimburses the public HCP, which influences the HCP’s resource allocation decision. In this study, we investigate various payment schemes within this public healthcare system that provides both online and offline service. By modelling the problem as a Stackelberg game, we comprehensively analyze three payment strategies, considering both offline and online patients. For simplification, Fee-for-service (FFS) is adopted for first-visit offline patients, while Bundled Payment (BP), FFS, and Pay-for-performance (P4P) are discussed for first-visit online patients. The strategies are named Payment-BP (P-BP), Payment-FFS (P-FFS) and Payment-P4P (P-P4P). Our study finds that P-P4P yields the highest social welfare. Besides, P-BP is effective only when the HCP's optimal decision happens to fit with the social welfare well. P-FFS achieves the same outcomes as P-P4P when both the sensitivity of the revisit rate and the unit convenience-and-risk-reduction gain are large.