Game Theoretic Models of Healthcare Cooperative Competition Dilemmas

Abstract

Misaligned incentives and competitive games abound across health care, governing decisions and actions at operations, clinical, and policy levels, which limits process improvement and reform. The prisonerÍs dilemma, volunteerÍs dilemma, and fair division models are a few examples of a larger body of economic game theory models that describe rational behavior under a set of rules and incentives. Guided by the Institute for Healthcare ImprovementÍs Triple Aim, these models are designed to reduce waste and inefficient allocation of resources (controlling the cost of care); prevent failures in care coordination (enhancing the quality of care); and achieve an efficient equilibrium among regional healthcare partners and/or competitors (improving the health of the population). Three examples will be illustrated: (1) Organ allocation, where each transplant center is incentivized to game the system and defect from the optimal cooperative strategy. (2) Care transitions, where ambiguity over who owns the patient leads to a failure to provide care. (3) Market segmentation, where coalitions must account for the preference of each partner. Mechanism design and market design are explored as approaches to a more rational system.