Optimal pricing decisions for multichannel healthcare service with differing consemers’ knowledge levels

Purpose: The purpose of this paper is to establish a stylized model to solve the pricing strategy, resource allocation and consumer surplus problems of multichannel healthcare services. Design/methodology/approach: This paper considers a two-stage decision model with different levels of consumers’ knowledge. Faced with physical problems, knowledgeable consumers can solve their problems by seeking online healthcare channels, while unknowledgeable consumers need to make a two-stage decision to try to solve their problems. Findings: The effective diagnosis rate and the proportion of knowledgeable consumers positively impact the optimal pricing in online and offline channels. In addition, a higher proportion of knowledgeable consumers does not result in higher demand in the online and offline channels. Moreover, if service providers lower their prices a small amount, they will lose some profit, but the consumer surplus will be higher, which will encourage more consumers to access healthcare services. Research limitations/implications: Knowledge levels are simplified into two categories. Also, the authors assume the resources of online and offline healthcare services are comparable. Originality/value: This paper incorporates the knowledge level and misdiagnosis rate into the model framework to study the most effective pricing strategy for multichannel healthcare services.