To improve the inefficient prevention caused by customers unwillingness to adopt prevention strategies in health management,an incentive feedback mechanism that is based on game theory and contract design theory is introduced.The conditions for making customers and health maintenance organizations(HMOs)willing to participate in the proposed mechanism are given.A dual nonlinear programming model is used to identify the optimal prevention effort of customers and the pricing strategy of HMOs.Results show that to generate increased benefits,HMOs need to consider cost sharing when customers are not familiar with the proposed health services.When health services are gradually accepted,the cost sharing factor can be gradually reduced.Simulation shows that under random circumstances in which the market reaches a certain size,the proposed method exhibits a positive network externality.Motivated by network externality,HMOs only need to make their customers understand that the larger the number of participants,the greater the utility of each person.Such customers may then spontaneously invite others to purchase insurance.
