Game Analysis and Improvement of the Medical Expenses Payment

Fang, Qing; Luo, Li; Zhao, Ming; Ren, Qunrong

doi:10.1007/978-3-642-55182-6_4

Cited by 4 publications

(3 citation statements)

References 1 publication

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“…They identified an overprovision and underprovision of service under retrospective and prospective payment, respectively, and proposed a transformation from pure payment methods to mixed payment methods to optimize medical service. Other theoretical studies have also found that mixed payment methods can overcome the weaknesses of pure payment methods, thus providing theoretical support for using mixed payment methods [ 5 – 8 ].…”

Section: Introductionmentioning

confidence: 99%

Effects of fee-for-service, diagnosis-related-group, and mixed payment systems on physicians’ medical service behavior: experimental evidence

Zhang

et al. 2022

BMC Health Serv Res

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Background Healthcare reforms in many countries have shown a movement from pure payment systems to mixed payment systems. However, there remains an insufficient understanding of how to design better mixed payment systems and how such systems, especially Diagnosis-Related-Group (DRG)-based systems, benefit patients. We therefore designed a controlled laboratory experiment to investigate the effects of fee-for-service (FFS), DRG, and mixed payment systems on physicians’ service provision. Methods A total of 210 medical students were recruited from Capital Medical University as subjects. They, in the role of physicians, were randomly divided into seven groups and chose the quantity of medical services for different patient types under pure FFS, pure DRG, or mixed payment schemes that included two FFS-based mixed payment schemes and three DRG-based mixed payment schemes. There were five rounds of each group of experiments, and each subject made 18 decisions per round. The quantity of medical services provided by subjects were collected. And relevant statistics were computed and analyzed by nonparametric tests and random effects model. Results The results showed that the physicians’ overprovision (underprovision) of services under FFS (DRG) schemes decreased under mixed payment schemes, resulting in higher benefit to patients under mixed payment schemes. Patients’ health conditions also affected physicians’ behavior but in different directions. Higher disease severity was associated with higher deviation of physicians’ quantity choices from the optimal quantity under DRG and DRG-based mixed payment schemes, while the opposite was found for FFS and FFS-based mixed payment schemes. Conclusions Mixed payment systems are a better way to balance physicians’ profit and patients’ benefit. The design of mixed payment systems should be adjusted according to the patient’s health conditions. When patients are in lower disease severity and resource consumption is relatively small, prospective payments or mixed systems based on prospective payments are more suitable. While for patients in higher disease severity, retrospective payments or mixed systems based predominantly on retrospective payments are better.

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Section: Introductionmentioning

confidence: 99%

Effects of fee-for-service, diagnosis-related-group, and mixed payment systems on physicians’ medical service behavior: experimental evidence

Zhang

et al. 2022

BMC Health Serv Res

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“…In contrast, we examine the impact of the hybrid model in the presence of FFS and DRG on multiple stakeholders' objectives. Qing et al (2014) analyze the interaction between Medicare and hospitals under a mixed payment system combined with total prepaid and services paid. However, patient decision-making is not considered, nor is the performance of individual participants compared between a single payment system and a mixed payment system.…”

Section: Medical Insurance Payment Systemsmentioning

confidence: 99%

The impact of medical insurance payment systems on patient choice, provider behavior, and out‐of‐pocket rate: Fee‐for‐service versus diagnosis‐related groups

et al. 2023

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The medical insurance payment system (MIPS) is a key mechanism to ensure the public's access to medical services. In a game‐theoretic model, we examine the impact of two MIPSs, fee‐for‐service (FFS) and diagnosis‐related groups (DRG), on patient choices, provider behavior, and out‐of‐pocket rate. We find that neither FFS nor DRG can dominate the other in all three aspects: social welfare, provider profit, and total patient surplus. In particular, under DRG, the out‐of‐pocket rate for patients is lower, and the total patient surplus is higher than that under FFS. However, patients with lower illness severity tend to not participate in DRG, while FFS can make all patients participate in the program. Furthermore, when the marginal cost of medical services is high, the profit of the provider and social welfare under DRG is higher than those under FFS, otherwise lower. After interviewing hospital leaders, we further investigate two extended (pilot) payment systems: DRG with two price groups, and the hybrid model incorporating both FFS and DRG. We find that both models contribute to improving provider behavior, making more patients choose the provider, but are still not perfect payment systems due to lower provider profit or social welfare. Our findings offer important insights for policymakers regarding implementing medical insurance reform in practice.

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“…On the other side, instead of a market-based mechanism, practice managers adjust contracts at a regular time interval using historical knowledge of budget shortfalls and excesses. From this framework, doctors can recommend more or fewer visits to FFS patients for checkups, which patients tend to follow per Say's Law [7]. Hence, the timing of patient visits can be shifted by adjusting waiting times.…”

Section: Introductionmentioning

confidence: 99%

A game theoretic setting of capitation versus fee-for-service payment systems

Koenecke

2019

PLoS ONE

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We aim to determine whether a game-theoretic model between an insurer and a healthcare practice yields a predictive equilibrium that incentivizes either player to deviate from a fee-for-service to capitation payment system. Using United States data from various primary care surveys, we find that non-extreme equilibria (i.e., shares of patients, or shares of patient visits, seen under a fee-for-service payment system) can be derived from a Stackelberg game if insurers award a non-linear bonus to practices based on performance. Overall, both insurers and practices can be incentivized to embrace capitation payments somewhat, but potentially at the expense of practice performance.

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Game Analysis and Improvement of the Medical Expenses Payment

Cited by 4 publications

References 1 publication

Effects of fee-for-service, diagnosis-related-group, and mixed payment systems on physicians’ medical service behavior: experimental evidence

Effects of fee-for-service, diagnosis-related-group, and mixed payment systems on physicians’ medical service behavior: experimental evidence

The impact of medical insurance payment systems on patient choice, provider behavior, and out‐of‐pocket rate: Fee‐for‐service versus diagnosis‐related groups

A game theoretic setting of capitation versus fee-for-service payment systems

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