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An agent-based simulation model of patient choice of health care providers in accountable care organizations

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  • Abdullah Alibrahim

    (University of Southern California)

  • Shinyi Wu

    (University of Southern California
    University of Southern California
    University of Southern California)

Abstract

Accountable care organizations (ACO) in the United States show promise in controlling health care costs while preserving patients’ choice of providers. Understanding the effects of patient choice is critical in novel payment and delivery models like ACO that depend on continuity of care and accountability. The financial, utilization, and behavioral implications associated with a patient’s decision to forego local health care providers for more distant ones to access higher quality care remain unknown. To study this question, we used an agent-based simulation model of a health care market composed of providers able to form ACO serving patients and embedded it in a conditional logit decision model to examine patients capable of choosing their care providers. This simulation focuses on Medicare beneficiaries and their congestive heart failure (CHF) outcomes. We place the patient agents in an ACO delivery system model in which provider agents decide if they remain in an ACO and perform a quality improving CHF disease management intervention. Illustrative results show that allowing patients to choose their providers reduces the yearly payment per CHF patient by $320, reduces mortality rates by 0.12 percentage points and hospitalization rates by 0.44 percentage points, and marginally increases provider participation in ACO. This study demonstrates a model capable of quantifying the effects of patient choice in a theoretical ACO system and provides a potential tool for policymakers to understand implications of patient choice and assess potential policy controls.

Suggested Citation

  • Abdullah Alibrahim & Shinyi Wu, 2018. "An agent-based simulation model of patient choice of health care providers in accountable care organizations," Health Care Management Science, Springer, vol. 21(1), pages 131-143, March.
  • Handle: RePEc:kap:hcarem:v:21:y:2018:i:1:d:10.1007_s10729-016-9383-1
    DOI: 10.1007/s10729-016-9383-1
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    References listed on IDEAS

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    1. Gaynor, Martin & Town, Robert J., 2011. "Competition in Health Care Markets," Handbook of Health Economics, in: Mark V. Pauly & Thomas G. Mcguire & Pedro P. Barros (ed.), Handbook of Health Economics, volume 2, chapter 0, pages 499-637, Elsevier.
    2. José J. Escarce & Kanika Kapur, 2009. "Do patients bypass rural hospitals? Determinants of inpatient hospital choice in rural California," Working Papers 200902, School of Economics, University College Dublin.
    3. Gauthier, Bernard & Wane, Waly, 2011. "Bypassing health providers: The quest for better price and quality of health care in Chad," Social Science & Medicine, Elsevier, vol. 73(4), pages 540-549, August.
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