Can Yardstick Competition Reduce Waiting Times?

• 成果类型: Article
• 署名作者: Savva, Nicos; Tezcan, Tolga; Yildiz, Ozlem
• 署名单位: University of London; London Business School; University of Virginia
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2018.3089
• 发表日期: 2019
• 页码: 3196-3215
• 关键词: yardstick competition; hospital regulation; emergency care; game theory; queueing theory

摘要

Yardstick competition is a regulatory scheme for local monopolists (e.g., hospitals), where the monopolist's reimbursement is linked to performance relative to other equivalent monopolists. This regulatory scheme is known to provide cost-reduction incentives and serves as the theoretical underpinning behind the hospital prospective reimbursement system used throughout the developed world. This paper uses a game-theoretic queueing model to investigate how yardstick competition performs in service systems (e.g., hospital emergency departments), where in addition to incentivizing cost reduction the regulator wants to incentivize waiting time reduction. We first show that the form of cost-based yardstick competition used in practice results in inefficiently long waiting times. We then demonstrate how yardstick competition can be appropriately modified to achieve the dual goal of cost and waiting-time reduction. In particular, we show that full efficiency (first-best) can be restored if the regulator makes the providers' reimbursement contingent on their service rates and is also able to charge a provider-specific toll to consumers. More important, if such a toll is not feasible, as may be the case in healthcare, we show that there exists an alternative and particularly simple yardstick-competition scheme, which depends on the average waiting time only, that can significantly improve system efficiency (second-best). This scheme is easier to implement because it does not require the regulator to have detailed knowledge of the queueing discipline. We conclude with a numerical investigation that provides insights on the practical implementation of yardstick competition for hospital emergency departments, and we also present a series of modelling extensions.