Comparison of subsidy schemes for reducing waiting time: special focus on smart home care for elderly people

With the aging of the population, community-based elderly care service becomes popular in China. To improve the well-being of elderly people and provide high-quality service, smart products are used in home care and community-based elderly care service, such as remote monitor system, health monitor device and intelligent home appliances. Chinese government also carries out some fiscal policies to promote smart home care and reduce service waiting time. While various subsidy schemes are proven effective in healthcare and other fields, it remains ambiguous which scheme is more efficient in elderly care services. In this socio-economic context, we formulate stylized queuing models within a game-theoretic framework to compare two types of subsidy schemes: investment subsidy for service providers and price subsidy for elders using the service. The results show that investment subsidy is more cost-effective given the same waiting time threshold. Government should choose different subsidy schemes under different market condition, and use subsidy schemes and waiting time threshold in combination. This study provides insights for smart home care service management and offers implications for government in subsidy scheme selection.