Healthcare Mechanisms from Policy-as-Code Search under Strategic Provider Response

Artificial intelligence (AI) is increasingly integrated into medical decision-making, yet its liability implications remain complex, particularly when physicians differ in diagnostic skills and their quality is unobservable. This paper develops a principal-agent model in which a social planner designs medical liability to regulate a physician with private quality information who chooses between a standard treatment, a personalized judgment-based treatment, or following an imperfect AI recommendation. Our analysis yields several novel insights. First, we show that the optimal mechanism under asymmetric information is surprisingly simple: a uniform, one-size-fits-all liability level for all physician types who deviate from the standard of care. Despite physician heterogeneity, this simple policy often achieves the full-information first-best outcome, particularly when standard care is reliable or AI is highly accurate. Second, the relationship between AI accuracy and optimal liability is non-monotonic. Contrary to common intuition, better AI does not always imply more relaxed liability. As AI accuracy increases, the optimal liability either decreases monotonically or follows an inverted-U pattern, depending on the uncertainty of the standard treatment. Third, asymmetric information does not universally reduce social welfare. Welfare loss arises only when standard care is unreliable and AI accuracy is too low; even then, its magnitude follows an inverted U-shape, initially increasing as AI complicates the regulatory problem, but declining as more accurate AI helps mitigate it. Finally, we find that information asymmetry is a double-edged sword in the presence of AI, and greater transparency does not benefit all stakeholders equally.

End-to-end automation of realistic healthcare operations stresses three capabilities underrepresented in current benchmarks: policy density, decisions must be grounded in a large library of medical, insurance, and operational rules; Multi-role composition: a single task requires the agent to play multiple roles with handoffs; and multilateral interaction: intermediate workflow steps are multi-turn dialogs, such as peer-to-peer review and patient outreach. We introduce $χ$-Bench, a benchmark of long-horizon healthcare workflows across three domains: provider prior authorization, payer utilization management, and care management. Each task hands the agent a clinical case in a high-fidelity simulator of 20 healthcare apps exposed via 87 MCP tools, which it must drive to a terminal status through tool calls and writing the role's artifacts, guided by a 1,290+ document managed-care operations handbook skill. Across 30 agent harness/models configurations, the best agent resolves only 28.0% of tasks, no agent clears 20% on strict pass^3, and executing all tasks in a single session slumps the performance to 3.8%. These results raise the hypothesis that similar gaps are likely to surface in other policy-dense, role-composed, irreversible enterprise domains.

Clinical reasoning agents based on large language models (LLMs) aim to automate tasks such as intensive care unit (ICU) monitoring and patient state tracking from electronic health records (EHRs). Existing systems typically rely on manually curated clinical tools or skills for concepts such as sepsis detection and organ failure assessment. However, maintaining these tool libraries requires substantial expert effort, while zero-shot querying or code generation often produces inefficient and unreliable reasoning chains, especially under institution-specific clinical policies. We introduce CodeClinic, a benchmark built on MIMIC-IV for evaluating whether LLM agents can synthesize and compose reusable clinical skills instead of relying on fixed toolboxes. The benchmark contains two complementary tasks: longitudinal ICU surveillance and compositional information seeking. The longitudinal setting simulates monitoring patient trajectories with structured decisions every four hours across 25 findings and eight clinical families, while the compositional setting spans 63k instances across 259 tasks in nine domains and is stratified by compositional dependency depth to evaluate increasingly complex multi-step reasoning. We further propose an offline autoformalization pipeline that converts natural-language clinical guidelines into reusable and verified Python skill libraries through iterative LLM refinement. Compared with zero-shot code generation, the resulting libraries improve consistency while reducing per-query token usage by up to 40%.