The Impact of Physician-Hospital Integration on China’s Referral-Based Healthcare System

讲座内容简介：   

Vertical integration has been growing steadily in healthcare and several studies have explored the impact of this phenomenon on prices, consumers, etc. Motivated by China’s reform on the referral-based healthcare system, we provide an operational perspective by investigating how vertical integration influences the referral behavior in primary care and the corresponding service provision at hospitals or specialists with substantial capacity constraints using a stylized model. We use a novel modeling feature to capture the level of integration and its impact on generalist and specialist decisions and profits. We find that the healthcare system efficiency can indeed be improved with a moderately higher integration level. However, congestion at the specialist stage becomes substantial, dragging down system efficiency, when the level of integration increases beyond a certain threshold; full integration is not optimal. Moreover, aiming for a moderate level of integration is especially appropriate if the generalist's ability to treat complex patients is limited, and/or timely access to treatment is important. Our work also shows that physicians get higher payment without necessarily improving service quality when the integration level is higher. We also discuss the implications of our results in the context of the Chinese healthcare system.

讲座嘉宾简介：     

Professor Chunyang Tong is a professor in the School of Economics and Management, Tongji University, China. He obtained the bachelor’s degree in Electrical Engineering from Huazhong University of Science and Technology (HUST) and the Ph.D. of Business Administration from the University of Southern California (USC). His research spans from pricing schemes of service system, consumer behavior, supply chain management, to healthcare operations. His works have been published extensively on top journals, including OR, MSOM, POM. His recent research focused on several issues in China’s healthcare reforms, including establishing referral-based healthcare system, payment schemes for physicians, and organizational restructuring. He is currently serving as AE for MSOM journal.