Abstract: At present, there are serious "information island" among hospitals in China. The willingness of hospitals to participate in health information exchange is not high, and the health information of patients is stored in static fragments and cannot be effectively utilized. Considering that health information exchange in hospitals will reduce the switching costs of patients, a multi-stage duopoly dynamic game model is constructed to study the impact of health information exchange on the number of patients transferred and the quality of service during the hospital competition process. First of all, according to whether there is switching cost, patients are divided into new patients and experience patients, and the utility function of patients is described using Hotelling model, which aims to analyze the decision-making of patients. Then, under the circumstances of government price regulation and without considering the hospital's altruism, the objective function of the cumulative expected revenue of the hospital is constructed, and the dynamic programming method is used to solve the optimal service quality level of maximizing the cumulative expected revenue. The Markov perfect equilibrium for achieving patients mutual transferred and the coexistence of hospitals in the market is obtained. Finally, according to the fact that the patients switching costs is reduced to zero after participating in health information exchange, the changes of the number of patients transferred and the service quality are analyzed and compared. It is found that in the context of patients transfer among different hospitals before participating in health information exchange, the number of patients transferred is increased but there is an upper limit after participating in health information exchange. The increased number of patients transferred is positively correlated with the switch costs, but negatively correlated with the initial perceived utility difference. The level of service quality under equilibrium is higher than that before participating in health information exchange. Therefore, without changing the current mode of medical insurance payment, to accelerate the promotion of health information exchange, the government departments can regularly provide subsidies to hospitals based on the changes in the number of patients and the level of service quality, so as to motivate hospitals to actively participate in health information exchange. A quantitative expression of this subsidy is given in this paper.

Key words: health information exchange, switching costs, number of patients transferred, service quality level, dynamic game model