Downstream healthcare referral, where patients undergoing surgery in a tertiary hospital are transferred to a community hospital for follow-up rehabilitation care, has been widely promoted in China but little progress has been made. The implementation of bundled payment (BP) and integrated healthcare systems may turn things around. In practice, there are mainly two types: subordination and subcontracting. By using a three-stage game model, we find: (i) When the budget is sufficient, BP can coordinate both systems. However, when the budget is limited, BP can only coordinate the subordination system, and below a certain budget threshold, no integration is possible. (ii) From the regulator's perspective, the bundled price under subordination does not exceed that under subcontracting, making subordination the preferred choice. (iii) As far as hospitals, subcontracting is better in most cases, but subordination also brings more profits in some cases. (iv) Subcontracting results in Pareto improvements (PI) in most scenarios. Subordination can be a PI when both the budget and potential arrival rate are within a certain range.
Gan et al. (Sun,) studied this question.
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