Channel choice and incentives in the cadaveric organ supply chain

Abstract

The low rate of cadaveric organ donation is a challenge that most countries struggle with. In this study, we examine factors and alternate decision-making setups that influence the supply of cadaveric organs, and identify possible incentives and mechanisms to increase it. We develop a model that captures the interaction between supply-side entities – a coordinating organisation, whose objective is to maximise the social welfare, and a hospital that performs the organ retrieval. Under different setups, we evaluate the two levers available to the coordinating organisation, its own effort and reimbursement fees, which can be used to induce higher effort by hospitals. We contrast these decisions and payoffs to determine if any benefits are forthcoming from the coordinating organisation’s effort commitment. We also examine the hospital’s optimal channel decision in the presence of an unauthorised channel and a low paying authorised channel, and derive the conditions under which the hospital would prefer the authorised channel over the unauthorised channel. Our results provide insights that lead to better outcomes for the players, and result in the improved organ donation rate.