Improving Health Outcomes with Less Cost? Provision of Mobile Clinic in Developing Economies

Consider a public healthcare system consisting of a hospital, a mobile clinic (MC), and a population of potential patients. The government is concerned about the system’s healthcare spending and the population’s health outcomes. It needs to decide whether and how to provide the MC service to maximize the social welfare that consists of two terms: the system’s long-run average healthcare cost and the population’s average quality-adjusted life year (QALY). We model the population’s natural disease progression and derive both the average healthcare cost and the average QALY for a given MC delivery cycle. We then characterize the optimal MC delivery policy for both fast- and slow-progressive diseases. We show that the MC service is provided only when the setup cost is below a certain threshold under both disease types. Once the MC service is provided, we show that if the disease is fast-progressive, the MC service is provided either every or every other period. In contrast, when the disease is slow-progressive, we find that a larger MC capacity leads to a weakly less frequent provision of the MC service. The provision of the MC service always results in a longer average QALY compared to that without the MC service. It can also reduce the average healthcare cost when the setup cost is sufficiently low and the relative treatment cost-saving per person with the provision of the MC service is positive. The provision of the MC service can result in both the healthcare cost reduction and the QALY improvement only when the incremental cost-effectiveness ratio (ICER) is negative. We find that the ICER is more likely to be negative when (i) the government becomes less concerned about the QALY improvement, (ii) the MC treatment becomes more effective, or (iii) the MC capacity becomes larger. Our case study reveals that when the ICER is negative, on average, the provision of the MC service leads to a 141% improvement in average QALY and a 13.1% reduction in average healthcare cost compared to those with no MC service; when the ICER is positive, on average, the average QALY can be increased significantly by 266.4% at the cost of increasing the average healthcare cost by 5.8% with the provision of the MC service. Interestingly, expanding the MC capacity may not necessarily improve the population’s health outcome.