Management Science and Engineering Department 's Lecture


Theme:The Impact of Reimbursement Policy on Social Welfare, Revisit Rate and Waiting Time in a Public Healthcare System: Fee-for-Service vs. Bundled Payment

Speaker:Yulan Wang (Hong Kong Polytechnic University)

Time:2019-05-15 12:00

Address:Room 1008, Mingde Business Building



Debtholders and equityholders have different preferences for risks. Equityholders have the This paper examines the impact of two reimbursement schemes, Fee-for-Service and Bundled Payment, on the social welfare, the patient revisit rate, and the patient waiting time in a public healthcare system. The two schemes differ on the payment mechanism: under the fee-for-service scheme, the healthcare provider receives the payment each time a patient visits (or revisits) whereas, under the bundled payment scheme, the healthcare provider receives a lump sum payment for the entire episode of care regardless of how many revisits a patient incurs. By considering the quality-speed tradeoff (i.e., a higher service speed reduces service quality, resulting in a higher revisit rate), we examine a three-stage Stackelberg game to determine the patients' initial visit rate, the service provider's service rate (which affects the revisit rate), and the funder's reimbursement rate. This analysis enables us to compare the equilibrium outcomes (social welfare, revisit rate and waiting time) associated with the two payment schemes. We find that when the patient pool size is large, the bundled payment scheme dominates the fee-for-service scheme in terms of higher social welfare and a lower revisit rate, whereas the fee-for-service scheme prevails in terms of shorter waiting time. When the patient pool is small, the bundle payment scheme dominates the fee-for-service scheme in all three performance measures.

Yulan Wang is currently an associate professor in the Department of the Logistics and Maritime Studies at the Faculty of Business of the Hong Kong Polytechnic University. She received her Ph.D degree in Business Administration from Duke University. She obtained both her BS and MS degrees from Shanghai Jiao Tong University.  Her research work has been published in leading academic journals such as Management Science, Operations Research, Manufacturing & Service Operations Management, Production and Operations Management, among others. Her research interests include supply chain management, sustainability operations, and the behavioral issues in operations management. She serves as the senior editor for  Production and Operations Management and the associate editor for Omega. She is the editorial review board member of Production and Operations Management and the editorial advisory board member of Transportation Research - Part E.


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