A Game Theoretic Setting of Capitation Versus Fee-For-Service Payment Systems

Allison Koenecke

Papers from arXiv.org

Abstract: 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.

Date: 2019-04, Revised 2019-09
New Economics Papers: this item is included in nep-gth, nep-hea and nep-ias
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