The objective of this award is to analyze and improve multi-level incentive mechanisms in health care to benefit patients, physicians, hospitals and payers. A novel modeling approach based on multiscale decision theory will be developed that can account for the multi-level interdependencies between stakeholders, supports their decision processes and enables the re-design of incentive programs. The approach integrates a new graphical modeling technique with a modular mathematical formulation strategy to compute optimal decisions under uncertainty and to identify effective incentive structures. In a case study, the model will be applied to find mechanisms that can reduce the overuse of computed tomography (CT) scans.

If successful, the results of this research will lead to improvements in the design of incentives in health care. Better alignment of incentives is one of the key mechanisms to lower costs while improving quality for the U.S. health care system. The benefits to society and economy will be an improvement in health care value, i.e., better health outcomes at lower costs. Fundamental research and advances in multiscale decision theory will lead to novel modeling and solution methods for complex socio-technical systems. The work will also contribute to the education of students and health care professionals on how to use incentives in organizational system design. An international collaboration with Germany will allow students to exchange ideas on health care system improvements from the perspective of their country and culture.

Project Start
Project End
Budget Start
2013-08-15
Budget End
2016-07-31
Support Year
Fiscal Year
2013
Total Cost
$200,000
Indirect Cost
City
Blacksburg
State
VA
Country
United States
Zip Code
24061