Health Care Management Science

, Volume 21, Issue 1, pp 37–51 | Cite as

Modeling and designing health care payment innovations for medical imaging

  • Hui ZhangEmail author
  • Christian Wernz
  • Danny R. Hughes


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.


Multiscale decision theory Health care incentives Health care payment systems Accountable Care 



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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Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  1. 1.Virginia Polytechnic Institute and State UniversityBlacksburgUSA
  2. 2.Harvey L. Neiman Health Policy InstituteRestonUSA
  3. 3.George Mason UniversityFairfaxUSA

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