Game Analysis and Improvement of the Medical Expenses Payment

Fee for Service is a widely used way of medical expenses payment. However, this kind of payment often stimulates the excessive medical services. This paper reveals the mechanism of excessive medical service through economic game theory. It is difficult to control health care cost under a single payment mode. Under the framework of new rural cooperative medical schemes, this paper presents a mixed payment and analyzes the game between Medical Insurance and hospital. Results indicate that choosing a mixed payment strategy according to certain probability distribution can always achieve the Pareto equilibrium solution of resource allocation and can also be helpful to control the excessive growth of medical expenses.