Modelling competition in health care markets as a complex adaptive system: an agent-based framework

Abstract

Health market reforms necessitate continuous re-evaluation of initiatives, competitive regulations, and antitrust policies. Synergistic implications, evolution, and behaviour changes associated with the market competition are often overlooked due to methodological limitations. To rectify these limitations, parallels between defining features of health care markets (HCM) and complex adaptive systems (CAS) are drawn. The science of CAS develops complex system-level models of dynamic interactions to allow insights for heterogeneous agents and emergent behaviours. Agent-based modelling (ABM) is a computational tool of CAS science suitable for investigating competition in HCM. The proposed agent-based framework conceptualises agents, environment, and interactions, and formalises agent-specific attributes and modules that achieve agent roles to recreate HCM dynamics. The framework conceptualises competition in HCM into an implementable ABM for a CAS assessment, identifies data sources, and develops face-validity procedures. Developments in data, computational power, and decisions theory compel CAS approach to complement studies on pressing HCM issues.

Keywords: Health care competition; agent-based modelling; complex adaptive systems; complexity science; value-based competition.

Figure 1.

A framework of the interactions in a managed-competition HCM that represents the key roles among active market agents.

Figure 2.

A causal diagram that highlights key provider decisions, factors influencing their decisions, and the effects of provider decisions on total expenditures.

Figure 3.

The reductionist approach to study competition in HCM implies “black box” system and implicit assumptions.

Figure 4.

The natural components of the proposed framework to study competition in HCM when utilising a CAS approach highlights the interconnectedness levels of agents, mechanisms, and tensions.