Allocating Cost Savings (Gains) Between Cooperating Providers: Introduction to the Concept of the Shapley Value

This chapter presents an application of the concept of the Shapley value for “fair” allocation cost savings (gains) between cooperating providers. The following two cases are considered in detail: (i) the general application of the Shapley value methodology for cost allocation between cooperating providers of care applied to the bundled payment model mandated by the Center for Medicare Services (CMS) and (ii) an important particular case in which each participant uses only a portion of the largest participant’s asset (the so-called airport game framework).