Dynamic Multi-Hospital Kidney Exchange: Coordination Costs, Complementarities, and Threshold Policies
Abstract
Cross-hospital kidney exchange can increase transplantation, but it requires transportation, regulatory compliance, and surgical synchronization, costly activities whose benefits accrue to patients. We study the socially optimal timing and organization of cooperation in a dynamic two-hospital kidney-exchange system with a per-exchange coordination cost, formulated as a continuous-time Markov decision process. Two analytical benchmarks, complementary and substitutable pools, yield supermodular and submodular value functions and monotone threshold policies: a larger partner pool lowers the threshold for using the partner’s inventory but raises the threshold for consuming one’s own, under a single-crossing condition in the substitutable case. We solve a literature-calibrated model in a net-position representation that is exact under an immediate-clearing restriction whose cost we quantify. In the symmetric baseline, cooperation becomes negligible on the optimal path well before the coordination cost exhausts the two-way surplus, and in the three-way exchange channel the planner preserves scarce reciprocal pairs instead of consuming them across hospitals. The value of cooperation is governed by arrival composition and cross-hospital asymmetry: hospitals with similar mixes gain little even at zero cost, while equal-sized hospitals with different mixes gain up to one third. The results provide a first-best benchmark for when costly cooperation creates value.