Pricing and Capability Planning of the Referral System Considering Medical Quality and Delay-Sensitive Patients—Based on the Chinese Medical System

Abstract

Combined with the development of Chinese medical industry, we have analyzed the characteristics of the referral system with Chinese characteristics and the possible problems in it. We combine the two main factors that affect patient care: medical quality and waiting costs, to study a most representative referral system made up of a tertiary hospital and a community hospital for its pricing and capacity planning issues. We build an integrated model of queuing theory and game theory to analyze if all patients make rational choices, what the community hospital should do to maximize the service capacity. Meanwhile, how the tertiary hospital makes pricing to achieve its profit maximization in the case of government taxation. The results show that the service capacity of community hospital is affected by government subsidies, cure rate, and the medical expenses of the tertiary hospital. And those of tertiary hospital are influenced most by government subsidies. Therefore, the results show that the smooth implementation of the government’s macro-control plays a crucial role in the two-way referral system.