Abstract
Payment innovations that better align incentives in health care are a promising approach to reduce health care costs and improve quality of care. Designing effective payment systems, however, is challenging due to the complexity of the health care system with its many stakeholders and their often conflicting objectives. There is a lack of mathematical models that can comprehensively capture and efficiently analyze the complex, multi-level interactions and thereby predict the effect of new payment systems on stakeholder decisions and system-wide outcomes. To address the need for multi-level health care models, we apply multiscale decision theory (MSDT) and build upon its recent advances. In this paper, we specifically study the Medicare Shared Savings Program (MSSP) for Accountable Care Organizations (ACOs) and determine how this incentive program affects computed tomography (CT) use, and how it could be redesigned to minimize unnecessary CT scans. The model captures the multi-level interactions, decisions and outcomes for the key stakeholders, i.e., the payer, ACO, hospital, primary care physicians, radiologists and patients. Their interdependent decisions are analyzed game theoretically, and equilibrium solutions - which represent stakeholders’ normative decision responses - are derived. Our results provide decision-making insights for the payer on how to improve MSSP, for ACOs on how to distribute MSSP incentives among their members, and for hospitals on whether to invest in new CT imaging systems.
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The authors thank the editor and referees for handling this paper and for providing constructive comments. This research was funded by the National Science Foundation under award number CMMI-1335407 and by the Harvey L. Neiman Health Policy Institute of the American College of Radiology.
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Appendix
Appendix
1.1 A1. Representation of agents’ UMPs
In agent P’s UMP, its monetary payoff is
Similarly, agent P’s health benefit is
In agent R’s UMP, its monetary payoff is
Agent R’s health benefit is
1.2 A2 . Proof of Theorem 1
It is easy to obtain the expressions of \(\theta _{P}^{*h}\) and \(\theta _{R}^{*h}\) via taking derivatives of B P1(𝜃 P |a h ) and B R2(𝜃 R |a h ). Additionally, it is easy to check that \(\theta _{P}^{*m}=\theta _{R}^{*m}=1\).
Next, we show that \(\theta _{P}^{*}\) satisfies \(\theta _{P}^{*h}<\theta _{P}^{*}\le 1\). Denote
We have \(0<\theta _{P}^{*h}=\frac {{{X}_{1}}}{{{X}_{2}}}<1,\text {} {{X}_{1}}<0,\text {} {{X}_{2}}<0\). The first derivative of U P(𝜃 P |a h ) with respect to 𝜃 P is
Given the inequalities \({{c}_{S,A,N}}-\tilde {q}{{c}_{S,I,T}}-(1-\tilde {q}){{c}_{S,I,N}}<0,\text {} (1-2\tilde {q})({{c}_{H,I,T}}-{{c}_{H,I,N}})<0\text {,} {{X}_{1}}<0,\text {} {{X}_{2}}<0\), we have
Because \({{c}_{S,A,N}}-\tilde {q}{{c}_{S,I,T}}-(1-\tilde {q}){{c}_{S,I,N}}-(1-2\tilde {q})({{c}_{H,I,T}}-{{c}_{H,I,N}})<0\), the result \(\theta _{P}^{*h}<\theta _{P}^{*}\le 1\) is then immediate.
Following the similar reasoning process as above, we have \(\theta _{R}^{*h}<\theta _{R}^{*}\le 1\). \(\square \)
1.3 A3. Proof of Theorem 2
For agent P: denote
We have \(\theta _{P}^{*h}(a_{2})=\frac {{{X}_{3}}}{{{X}_{4}}}\), \(\theta _{P}^{*h}(a_{1})=\frac {{{X}_{3}}+{{X}_{5}}}{{{X}_{4}}+{{X}_{6}}}\). Notice that X 3<0,X 4<0,X 3>X 4,X 5−X 6<0,X 5<0,X 6<0, we have
Therefore, when agent H switches from a 2=1 to a 1=1, \(\theta _{P}^{*h}\) increases.
Next we consider the changes in \(\theta _{P}^{*}\) when agent H switches from a 2=1 to a 1=1. Denote
When \(\theta _{P}^{*}(a_{2})<1\), \(\theta _{P}^{*}(a_{1})-\theta _{P}^{*}(a_{2})>0\) is equivalent to
Hence, \(\theta _{P}^{*}(a_{1})-\theta _{P}^{*}(a_{2})>0\) is equivalent to: \({{X}_{7}}-\theta _{P}^{*}(a_{2})>0\). Compute this inequality, we obtain the condition Eq. 14 in Theorem 2.
For agent R: denote \(\theta _{R}^{*h}(a_{2})=\frac {{{X}_{8}}}{{{X}_{9}}}\), X 8<0,X 9<0,X 8>X 9; denote \(\theta _{R}^{*h}(a_{1})=\frac {{{X}_{8}}+{{X}_{10}}}{{{X}_{9}}+{{X}_{11}}}\), where
Because X 10−X 11<0,X 10<0,X 11<0, we have
Therefore, when agent H switches from a 2=1 to a 1=1, \(\theta _{R}^{*h}\) increases.
Next we consider the changes in \(\theta _{R}^{*}\) when agent H switches from a 2=1 to a 1=1. Denote
Similarly, we have \(\theta _{R}^{*}(a_{1})-\theta _{R}^{*}(a_{2})>0\) equivalent to \({{X}_{12}}-\theta _{R}^{*}(a_{2})>0\). Next, following the same reasoning process in the proof for the change in \(\theta _{R}^{*h}\), it is easy to check that when agent H switches from a 2=1 to a 1=1 and when \(\theta _{R}^{*}(a_{2})<1\), \(\theta _{R}^{*}\) increases. \(\square \)
1.4 A4. Proof of Theorem 3
First, we provide the mathematical expressions for \(\theta _{P}^{**}\) and \(\theta _{R}^{**}\).
Next, we prove Theorem 3(a). For agent P: denote
By Theorem 1, we have X 13<X 14<0,X 16<X 15<0. When \(\theta _{P}^{**}\in (0,1)\), we have
Take the first derivative of \(\theta _{P}^{**}\) with respect to α, and we have the inequality
Hence \(\theta _{P}^{**}\) is a strict decreasing function of α when \(\theta _{P}^{**}\in (0,1)\).
For agent R: similarly, when \(\theta _{R}^{**}\in (0,1)\), denote \(\theta _{R}^{**}=\frac {-{{c}_{I}}+\eta \beta (1+{{\gamma }_{p}}){{c}_{I}}+{{X}_{17}}}{{{X}_{18}}}\). We have X 17<0,X18<0. Take the first derivative of \(\theta _{R}^{**}\) with respect to β, we have the inequality
Hence \(\theta _{R}^{**}\) is a strict decreasing function of β when \(\theta _{R}^{**}\in (0,1).\) \(\square \)
Lastly, we prove Theorem 3(b).
For agent P: using previous notations, we have
and the equality is reached when α=0 (by monotonicity).
Recall that \(\theta _{P}^{*}=Min\{1,\text {} \frac {{{X}_{13}}+{{X}_{15}}}{{{X}_{14}}+{{X}_{16}}}\}\).
When \(\frac {{{X}_{13}}+{{X}_{15}}}{{{X}_{14}}+{{X}_{16}}}\le 1\), \(\theta _{P}^{**}\le \frac {{{X}_{13}}+{{X}_{15}}}{{{X}_{14}}+{{X}_{16}}}=\theta _{P}^{*}\).
When \(\frac {{{X}_{13}}+{{X}_{15}}}{{{X}_{14}}+{{X}_{16}}}>1\), \(\theta _{P}^{**}\le 1=\theta _{P}^{*}\).
Hence we always have \(\theta _{P}^{**}\le \theta _{P}^{*}\).
For agent R: following previous notations, we have
and the equality is reached when β=0 (by monotonicity).
Recall that \(\theta _{R}^{*}=Min\{1,\text {} \frac {-{{c}_{I}}+{{X}_{17}}}{{{X}_{18}}}\}\).
When \(\frac {-{{c}_{I}}+{{X}_{17}}}{{{X}_{18}}}\le 1\), \(\theta _{R}^{**}\le \frac {-{{c}_{I}}+{{X}_{17}}}{{{X}_{18}}}=\theta _{R}^{*}\).
When \(\frac {-{{c}_{I}}+{{X}_{17}}}{{{X}_{18}}}>1\), \(\theta _{R}^{**}\le 1=\theta _{R}^{*}\).
Hence we always have \(\theta _{R}^{**}\le \theta _{R}^{*}\). \(\square \)
1.5 A5. Parameter values for numerical analysis
The parameter values used in Section 5 Numerical Analysis are listed in Table 5.
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Zhang, H., Wernz, C. & Hughes, D.R. Modeling and designing health care payment innovations for medical imaging. Health Care Manag Sci 21, 37–51 (2018). https://doi.org/10.1007/s10729-016-9377-z
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DOI: https://doi.org/10.1007/s10729-016-9377-z