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.Obje...

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Autores principales:	Jinli Duan, Zhibin Lin, Feng Jiao
Formato:	article
Lenguaje:	EN
Publicado:	Frontiers Media S.A. 2021
Materias:	bargaining model pricing government compensation medical service patient quality Public aspects of medicine RA1-1270
Acceso en línea:	https://doaj.org/article/8fcac02d98464fba865859b3dc42b92d
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spelling	oai:doaj.org-article:8fcac02d98464fba865859b3dc42b92d2021-12-01T16:17:58ZA Game Model for Medical Service Pricing Based on the Diagnosis Related Groups2296-256510.3389/fpubh.2021.737788https://doaj.org/article/8fcac02d98464fba865859b3dc42b92d2021-11-01T00:00:00Zhttps://www.frontiersin.org/articles/10.3389/fpubh.2021.737788/fullhttps://doaj.org/toc/2296-2565Background: 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.Jinli DuanZhibin LinFeng JiaoFrontiers Media S.A.articlebargaining modelpricinggovernment compensationmedical servicepatientqualityPublic aspects of medicineRA1-1270ENFrontiers in Public Health, Vol 9 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	bargaining model pricing government compensation medical service patient quality Public aspects of medicine RA1-1270
spellingShingle	bargaining model pricing government compensation medical service patient quality Public aspects of medicine RA1-1270 Jinli Duan Zhibin Lin Feng Jiao A Game Model for Medical Service Pricing Based on the Diagnosis Related Groups
description	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.
format	article
author	Jinli Duan Zhibin Lin Feng Jiao
author_facet	Jinli Duan Zhibin Lin Feng Jiao
author_sort	Jinli Duan
title	A Game Model for Medical Service Pricing Based on the Diagnosis Related Groups
title_short	A Game Model for Medical Service Pricing Based on the Diagnosis Related Groups
title_full	A Game Model for Medical Service Pricing Based on the Diagnosis Related Groups
title_fullStr	A Game Model for Medical Service Pricing Based on the Diagnosis Related Groups
title_full_unstemmed	A Game Model for Medical Service Pricing Based on the Diagnosis Related Groups
title_sort	game model for medical service pricing based on the diagnosis related groups
publisher	Frontiers Media S.A.
publishDate	2021
url	https://doaj.org/article/8fcac02d98464fba865859b3dc42b92d
work_keys_str_mv	AT jinliduan agamemodelformedicalservicepricingbasedonthediagnosisrelatedgroups AT zhibinlin agamemodelformedicalservicepricingbasedonthediagnosisrelatedgroups AT fengjiao agamemodelformedicalservicepricingbasedonthediagnosisrelatedgroups AT jinliduan gamemodelformedicalservicepricingbasedonthediagnosisrelatedgroups AT zhibinlin gamemodelformedicalservicepricingbasedonthediagnosisrelatedgroups AT fengjiao gamemodelformedicalservicepricingbasedonthediagnosisrelatedgroups
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A Game Model for Medical Service Pricing Based on the Diagnosis Related Groups

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