game theory, healthcare administration, strategic planning, strategy



  1. Dowd, Steven B. EdD, RT(R)(QM)(MR)(M)(CT)
  2. Root, Alexey PhD


Hospital management can be seen as a game, and doctors, nurses, and health maintenance organizations are its players. The astute hospital manager realizes the interdependence of individual career strategies and the hospital's success, just as players in a game are interdependent on each other. Managers familiar with game theory may successfully transfer that knowledge to the hospital realm. They may recognize patterns and calculate outcomes like chess players, bluff other hospitals into folding services as poker players do, and cooperate with their own team to maximize productivity. Knowledge of game theory may also make the hospital manager's job more personally enjoyable, as viewing life as a series of game-like challenges enriches experience.


WITH THE PUBLICATION of Sylvia Nasar's award winning book A Beautiful Mind1 and the resultant hit movie by Ron Howard, new interest has been focused on John Nash and game theory. Game theory has long found applicability in economics and business, although it does not appear to have been discussed extensively in the healthcare management literature. We will discuss some of the basic aspects of game theory and will suggest what type of game player the hospital manager may be. Although the term "playing games" is often used in a negative sense, life is improved when structured as a game with definite rules and outcomes.


We can view life from the perspective of a game. Human development occurs in stages, and "From this point of view, individual life appears to consist of a series of different 'games,' with different goals and challenges, which change with time as a person matures."2 The developmental psychologist Erik Erikson3 framed psychologic development of stages in adulthood, generativity versus stagnation. The terminology implies a game, one outcome versus the other or a win versus a loss. To successfully complete this game of adulthood requires that one learns, for example, how to pass one's knowledge on as one of the tasks or face stagnation.


As Csikszentmihalyi2 also noted, "The more a job inherently resembles a game-with variety, appropriate and flexible challenges, clear goals, and immediate feedback-the more enjoyable it will be regardless of the worker's level of development" (p. 152). Even so-called losers can benefit; losing a game is a form of learning, and in most games, such as chess, one must lose many games before one reaches expert or master status.