Managing Outpatient Service with Strategic Walk-ins

Outpatient care providers usually allow patients to access service via scheduling appointments or direct walk-in. Patients with acute symptoms are likely to walk in and other patients strategically choose between these two access channels (and otherwise balking) based on the trade-off of appointment delay and in-clinic waiting. While patients cannot know the exact in-clinic wait time beforehand, they may base their decisions either on the exact appointment delay or on the expected appointment delay (depending on how the provider schedules appointments). Taking into account such patient strategic choice behavior, we study how a provider can best manage her practice by controlling service capacity and the delay information revealed to patients. To optimize operational efficiency, the provider should adopt a "bang-bang" type of capacity control: If exact delay is observable, patients would schedule appointments whenever the delay is sufficiently short, but at optimality the provider should not let patients mix between walk-in and balking when the delay is long. If exact delay is unobservable, the provider should induce a pure strategy among strategic patients. Depending on whether the provider can freely adjust her capacity, she should offer delay information in a remarkably different, and to some extent, opposite manner. Specifically, when the capacity is predetermined and cannot be changed, then "hiding" exact delay benefits the provider only if strategic demand is relatively small, otherwise exact delay should be revealed to patients. However, when the provider can optimize her capacity, then "hiding" exact delay only benefits her when strategic demand is large and patients are sensitive to in-clinic waiting