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Mutual referral policy for coordinating health care systems of different scales

Author

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  • Xiaoyu Liu
  • Xiaoqiang Cai
  • Ruiqing Zhao
  • Yanfei Lan

Abstract

We develop a model to formulate the mutual referral process in a health care system involving a city hospital and a community hospital, and derive the optimal mutual referral strategy between them in the subordination situation as a benchmark. We also concentrate on the subcontracting situation, where the city hospital plays a dominating role, offering contracts to induce the community hospital to follow the optimal mutual referral strategy. We introduce two complex contracts: fee-for-service via cost sharing (FFS-CS) and pay-for-performance via cost sharing (P4P-CS) to coordinate, and find that both contracts coordinate effectively, regardless of the scale of the system. In addition, we discuss four extreme cases: fee-for-service via no cost sharing (FFS-NCS), fee-for-service via total cost sharing (FFS-TCS), pay-for-performance via no cost sharing (P4P-NCS), and pay-for-performance via total cost sharing (P4P-TCS) and find that some can coordinate the health care system under certain circumstances, whereas others cannot. Through the numerical examples we discuss the applicability of the coordinating contracts and further find that FFS-CS outperforms P4P-CS in terms of applicability.

Suggested Citation

  • Xiaoyu Liu & Xiaoqiang Cai & Ruiqing Zhao & Yanfei Lan, 2015. "Mutual referral policy for coordinating health care systems of different scales," International Journal of Production Research, Taylor & Francis Journals, vol. 53(24), pages 7411-7433, December.
  • Handle: RePEc:taf:tprsxx:v:53:y:2015:i:24:p:7411-7433
    DOI: 10.1080/00207543.2015.1082039
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    Citations

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    Cited by:

    1. Zhou, Cuihua & Lan, Yanfei & Li, Weifeng & Zhao, Ruiqing, 2022. "Medicare policies in a two-Tier healthcare system with overtreatment," Omega, Elsevier, vol. 109(C).
    2. Elodie Adida & Fernanda Bravo, 2019. "Contracts for Healthcare Referral Services: Coordination via Outcome-Based Penalty Contracts," Management Science, INFORMS, vol. 65(3), pages 1322-1341, March.
    3. Zhou, Cuihua & Hao, Yifei & Lan, Yanfei & Li, Weifeng, 2023. "To introduce or not? Strategic analysis of hospital operations with telemedicine," European Journal of Operational Research, Elsevier, vol. 304(1), pages 292-307.
    4. Li, Zhong-Ping & Chang, Aichih (Jasmine) & Zou, Zongbao, 2023. "Design mechanism to coordinate a hierarchical healthcare system: Patient subsidy vs. capacity investment," Omega, Elsevier, vol. 118(C).
    5. Fernanda Bravo & Retsef Levi & Georgia Perakis & Gonzalo Romero, 2023. "Care coordination for healthcare referrals under a shared‐savings program," Production and Operations Management, Production and Operations Management Society, vol. 32(1), pages 189-206, January.
    6. Gengjun Gao & Zhen Wu & Shuyun Wang, 2022. "Study on the incentive and coordination mechanism of tumor healthcare alliance based on evolutionary game," Journal of Combinatorial Optimization, Springer, vol. 44(4), pages 2577-2597, November.
    7. Yang, Nan & Shen, Liyin & Shu, Tianheng & Liao, Shiju & Peng, Yi & Wang, Jinhuan, 2021. "An integrative method for analyzing spatial accessibility in the hierarchical diagnosis and treatment system in China," Social Science & Medicine, Elsevier, vol. 270(C).
    8. Jianpei Wen & Hanyu Jiang & Jie Song, 2019. "A Stochastic Queueing Model for Capacity Allocation in the Hierarchical Healthcare Delivery System," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 36(01), pages 1-24, February.
    9. Wang, Jian-Jun & Li, Zhong-Ping & Shi, Jim (Junmin) & Chang, Ai-Chih (Jasmine), 2021. "Hospital referral and capacity strategies in the two-tier healthcare systems," Omega, Elsevier, vol. 100(C).
    10. Zhong-Ping Li & Jian-Jun Wang & Ai-Chih Chang & Jim Shi, 2021. "Capacity reallocation via sinking high-quality resource in a hierarchical healthcare system," Annals of Operations Research, Springer, vol. 300(1), pages 97-135, May.

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