Lessons from game theory about healthcare system price inflation: evidence from a community-level case study

A Game Model for Medical Service Pricing Based on the Diagnosis Related Groups

Background: Currently there are various issues that exist in the medical institutions in China as a result of the price-setting in DRGs, which include the fact that medical institutions tend to choose patients and that the payment standard for complex cases cannot reasonably compensate the cost.

Objective: The main objective is to prevent adverse selection problems in the operations of a diagnosis-related groups (DRGs) system with the game pricing model for scientific and reasonable pricing.

Methods: The study proposes an improved bargaining game model over three stages, with the government and patients forming an alliance. The first stage assumes the alliance is the price maker in the Stackelberg game to maximize social welfare. Medical institutions are a price taker and decide the level of quality of medical service to maximize their revenue. A Stackelberg equilibrium solution is obtained. The second stage assumes medical institutions dominate the Stackelberg game and set an optimal service quality for maximizing their revenues. The alliance as the price taker decides the price to maximize the social welfare. Another Stackelberg equilibrium solution is achieved. The final stage establishes a Rubinstein bargaining game model to combine the Stackelberg equilibrium solutions in the first and second stage. A new equilibrium between the alliance and medical institutions is established.

Results: The results show that if the price elasticity of demand increases, the ratio of cost compensation on medical institutions will increase, and the equilibrium price will increase. The equilibrium price is associated with the coefficient of patients' quality preference. The absolute risk aversion coefficient of patients affects government compensation and total social welfare.

Conclusion: In a DRGs system, considering the demand elasticity and the quality preference of patients, medical service pricing can prevent an adverse selection problem. In the future, we plan to generalize these models to DRGs pricing systems with the effects of competition of medical institutions. In addition, we suggest considering the differential compensation for general hospitals and community hospitals in a DRGs system, in order to promote the goal of hierarchical diagnosis and treatment.

National Survey of UK Consultant Surgeons’ Opinions on Surgeon-Specific Mortality Data in Cardiothoracic Surgery

Background—

In the United Kingdom, cardiothoracic surgeons have led the outcome reporting revolution seen over the last 20 years. The objective of this survey was to assess cardiothoracic surgeons’ opinions on the topic, with the aim of guiding future debate and policy making for all subspecialties.

Methods and Results—

A questionnaire was developed using interviews with experts in the field. In January 2015, the survey was sent out to all consultant cardiothoracic surgeons in the United Kingdom (n=361). Logistic regression, bivariate correlation, and the χ 2 test were used to assess whether there was a relationship between answers and demographic variables. Free-text responses were analyzed using the grounded theory approach. The response rate was 73% (n=264). The majority of respondents (58.1% oppose, 34.1% favor, and 7.8% neither) oppose the public release of surgeon-specific mortality data and associate it with several adverse consequences. These include risk-averse behavior, gaming of data, and misinterpretation of data by the public. Despite this, the majority overwhelmingly supports publication of team-based measures of outcome. The free-text responses suggest that this is because most believe that quality of care is multifactorial and not represented by an individual’s mortality rate.

Conclusions—

There is evident opposition to surgeon-specific mortality data among UK cardiothoracic surgeons who associate this with several unintended consequences. Policy makers should refine their strategy behind publication of surgeon-specific mortality data and possibly consider shift toward team-based results for which there will be the required support. Stakeholder feedback and inclusive strategy should be completed before introducing major initiatives to avoid unforeseen consequences and disagreements.

Global Worker Migration

In an attempt to alleviate the shortage of nurses practicing within the United States (US), hospitals and other health care organizations have begun to recruit nurses from outside America’s borders. While these efforts may yield increased staffing levels in the US, they have also raised questions as to whether it is ethical to create nurse shortages in poor countries so that richer countries can enjoy full employee rosters. This recruitment of nurses serves to create what has been labelled as ‘brain drain’ for many developing countries. Within the US, professional nursing and hospital organizations and governmental legislation are attempting to address the issues of nursing shortages and help relieve some of the issues created by brain drain. Using game theory as a theoretical foundation, this article proposes the development of a win-win environment that may support adequate nursing levels in both developed and developing countries.