Modeling and Analysis of Value-Based Healthcare Delivery

Healthcare reforms are emerging in order to control the increasing healthcare expenditures and to improve the health outcomes. In the context of the Value-based Healthcare Delivery reform, Michael Porter defines value as a patient\u27s health outcome per dollar spent. Porter\u27s proposal is comprised of organizing care around a medical condition (or around patient segments for primary care). Specifically, care will be provided by a dedicated, multidisciplinary team of providers, an Integrated Practice Unit (IPU). The IPU is jointly accountable for the health outcomes of patients and the costs of providing care during the full cycle of care. The main objective of this dissertation is to use analytics to determine enabling factors for the successful implementation of the value-based healthcare delivery reform. This dissertation consists of three core chapters. Chapter 2 draws insights on the effects of current payment schemes, including fee-for-service, capitation, and pay-for-performance, in fulfilling the objectives of value-based healthcare delivery. Particularly, a mathematical representation of healthcare delivery is proposed to assess if any of the existing payment systems can incentivize providers to improve the quality and integrate the care simultaneously. The results provide insights on strengths, shortcomings, and applicability of each payment system in fulfilling value-based healthcare delivery objectives. Chapter 3 determines the optimal payment system between the healthcare purchaser and the IPU. The current payment systems do not pay for health outcomes. Most importantly, they do not consider health outcomes over the care cycle and fail to provide dynamic incentives for the providers. This study investigates the contract that can coordinate the healthcare purchaser-IPU relationship over the care cycle. Chapter 4 studies the effects of different contractual arrangements on collaboration dynamics among the providers involved in an IPU. A mathematical representation that characterizes the relationship between the providers throughout the care cycle is proposed. When efforts are not contractible, the contractual agreement will determine the dynamics of the collaboration. Aside from characterizing the first-best solution, the effects of reward-sharing and relational contracts, together with traditional schemes, such as capitation, are studied in this chapter. The results of this dissertation shed light on the enablers of the value-based healthcare delivery reform. This dissertation is the first to design a dynamic incentives contract between the healthcare purchaser and the IPU, who is accountable for the health outcomes of a patient over the care cycle. The optimal contract can coordinate the objectives of the purchaser and the IPU and maximize social welfare. In addition, this is the first study to characterize the collaboration dynamics among the IPU members under different contractual agreements. The insights from this study can strengthen the work relationship of the providers within an IPU