Choice of Urgent Care By Strategic But Uninformed Patients

Many patients have a choice of a provider for acute care, typically choosing between an Urgent Care facility (UC) or an Emergency Department of a hospital (ED). This choice is made by a patient who is generally not herself a trained medical professional. She is strategic but imperfectly informed in that she weighs all the costs and benefits of this choice, including quality of care, waiting time, co-payments and fees, but can only imperfectly assess the appropriateness of a facility for the perceived needed care. For instance, she might deem an ED as necessary even though an UC might suffice or she might deem UC as adequate when she really needs the full services of an ED. In the latter case, there will be a additional delay in getting the appropriate treatment, possibly affecting the outcome and other costs. Other factors affecting the choice are the expected waiting time at each facility and the co-payments and fees. UC are typically less congested than ED, and the waiting times for care are lower. The patients form expectations on the waiting time at each facility. The UC manager sets the fee for service in competition with an ED. We show that the errors in self-classification make UC less desirable, i.e, the UC has to discount its co-pay/fees further as the error rates increase. We also study the long run version of the problem which the UC manager sets the capacity of the center. We determine the impact of classification errors on the capacity choice.