Investigating the effect of paid and free feedback on patients’ and physicians’ behaviors: Panel data analysis

Background: In recent years, paid online patient-physician interaction has been incorporated into the telemedicine markets, enabling patients to access other patients’ feedback about physicians through the internet. Online feedback can benefit the physicians, such as by providing them with monetary incentives; however, research on the impacts and value of such paid feedback from the physician perspective in the telemedicine markets is scant. To fill this research gap, this study was designed to understand the role of paid feedback by developing a research model based on the theories of signaling and self-determination. Objective: This study aimed to explore the effects of free and paid feedback on patients’ choice and physicians’ behaviors as well as to investigate the substitute relationship between these 2 types of feedback in the telemedicine markets. Methods: A JAVA software program was used to collect online patient-doctor interaction data over a 6-month period from a popular telemedicine market in China (Good Physician Online). This study drew on a 2-equation panel model to test the hypotheses. Both fixed and random effect models were used to estimate the combined effects of paid feedback and free feedback on patients’ choice and physicians’ contribution. Finally, the Hausman test was adopted to investigate which model is better to explain our empirical results. Results: The results of this study show that paid feedback has a stronger effect on patients’ choice (a₅=0.566; t₂₁₉₂=9.160; P<.001) and physicians’ contribution (β₄=1.332; t₂₁₉₃=11.067; P<.001) in telemedicine markets than free feedback. Moreover, our research also proves that paid feedback and free feedback have a substitute relationship in determining patients’ and physicians’ behaviors (a₆=−0.304; t₂₁₉₁=−5.805; P<.001 and β₅=−0.823; t₂₁₉₂=−8.136; P<.001). Conclusions: Our findings contribute to the extant literature on service feedback in the telemedicine markets and provide insight for relevant stakeholders into how to design an effective feedback mechanism to improve patients’ service experience and physicians’ engagement.