The Value of Private Patient Information in the Physician-Patient Relationship: A Game-Theoretic Account

Kris De Jaegher

doi:10.1155/2012/847396

Abstract

This paper presents a game-theoretical model of the physician-patient relationship. There is a conflict of interests between physician and patient, in that the physician prefers the patient to always obtain a particular treatment, even if the patient would not consider this treatment in his interest. The patient obtains imperfect cues of whether or not he needs the treatment. The effect of an increase in the quality of the patient's private information is studied, in the form of an improvement in the quality of his cues. It is shown that when the patient's information improves in this sense, he may either become better off or worse off. The precise circumstances under which either result is obtained are derived.

Highlights

All across developed countries, in the aftermath of the financial crisis of 2008, cash-strapped governments are currently seeking ways to cut their budgets
Given the rising costs of health care, this seems a good area for cutting the budget, as suspicion may arise that physicians prescribe unnecessary treatments
Proposition 1 shows the existence of a mixed equilibrium for this game, where we note that all proofs in this paper can be found in Appendix A

Summary

Introduction

In the aftermath of the financial crisis of 2008, cash-strapped governments are currently seeking ways to cut their budgets. Given the rising costs of health care, this seems a good area for cutting the budget, as suspicion may arise that physicians prescribe unnecessary treatments. A good way to cut the budget would seem to provide patients with more information so that they can better assess their health status, and in such a way that they avoid unnecessary treatment. The question we seek to address is whether better patient information can counter the conflict of interest between physician and patient. We analyze this question using a simple game-theoretic model of the physician-patient relationship, which is an extension of de Jaegher and Jegers [4]

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