Choice of Acute Care Facility by Patients: Implications for Managing Urgent Care Centers

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. The manager of the UC sets the fee for service in competition with an ED to influence the choice by patients, and takes into account the factors that affect the patient. We show that a separating equilibrium, in which all patients self-triaged as non-critical choose to go to the UC first, dominates pooling equilibria for moderate error rates in self-triage. We analyze the separating equilibrium further and show that the co-pay for an UC decreases, the facility is smaller, and makes less profit as the error rates increase. The effect of error rates on social welfare depends on the error type: The social welfare decreases as the error rate of critical patients classified as non-critical increases; the social welfare is convex in the error rate of non-critical patients classified as critical. Social welfare can increase with this error rate when the error is small because of load balancing between the ED and the UC, but after a threshold the social welfare decreases with error rate.