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How does service price influence patients’ decisions? An examination of the free-market pricing mechanism in online health communities

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Abstract

In online health communities (OHCs) in China, physicians can provide online diagnostic services and use the free-market pricing mechanism to price their service so as to encourage quality service. By collecting publicly available patient behavior data for three months for 7726 physicians (with 154,512 records) on an OHC in China, we use the negative binomial model and ordinary least square to empirically investigate the influences of service price on a patient’s sequent decisions including search, purchase, and review based on the medical resource scarcity and social exchange frameworks, and examine how disease risk moderates the magnitude of these effects. Our results show that service price is positively related to patients’ information search and review quality, but negatively related to their purchase and review decisions. In addition, the impacts of service price differ for severe versus mild diseases. Our research contributes to a better understanding of the free-market pricing mechanism on OHCs and provides practical implications for a physician’s pricing strategy in the online environment.

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Notes

  1. In this study, we only research the scarcity problem for high-quality human resources.

  2. http://2016.coschina.org/2016/cn/ 21st Congress of Chinese Ophthalmological Society, Suzhou, China, September 07–11, 2018.

  3. Interaction in our research context refers to an information exchange between a patient and a physician.

  4. Some physicians have provided free services if they wish for certain patients.

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Funding

This study was supported by the National Natural Science Foundation of China (award nos. 72001087, 71971092, 72032006, 91646113, and 71810107003).

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Authors and Affiliations

  1. School of Medicine and Health Management, Huazhong University of Science and Technology, Wuhan, China

    Hong Wu

  2. School of Management, Huazhong University of Science and Technology, Wuhan, China

    Zhaohua Deng

  3. Robert C. Vackar College of Business and Entrepreneurship, University of Texas Rio Grande Valley, Edinburg, TX, USA

    Bin Wang

  4. Indian Institute of Management Raipur, Atal Nagar, P. O. - Kurru (Abhanpur), Raipur, Chhattisgarh, 493 661, India

    Sumeet Gupta

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  1. Hong Wu
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Correspondence to Zhaohua Deng.

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Wu, H., Deng, Z., Wang, B. et al. How does service price influence patients’ decisions? An examination of the free-market pricing mechanism in online health communities. Electron Markets 31, 877–893 (2021). https://doi.org/10.1007/s12525-020-00453-0

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