This paper explores issues in the designation of centers to provide organ transplantation procedures and aftercare, a decision faced increasingly by policymakers, planners, and payers. As background for consideration of the regionalization of organ transplantation services, an array of models of regionalization of health services, ranging from full-scale vertical integration to market-enhancing information provision, is described. In the United States, regionalization has mainly followed the designation model within the certificate-of-need system; vertical integration has been adopted only in limited ways. Next, the authors' review of current approaches to the regionalization of organ transplantation centers by public and private payers indicates that designation of centers is increasing, although the empirical evidence concerning the classes of hospitals upon which designation decisions rest is weak. The authors then review the literature on the relationship between volumes and outcomes on surgical services with particular reference to organ transplantation, which on the whole suggests that a relationship between volumes and outcomes exists. Original empirical analysis of data on kidney transplants that were secured from the Health Care Financing Administration is then presented. The study of the effects of hospital and surgeon volumes on graft and patient survival and of the effect of volume on charges found no systematic influence of hospital or surgeon volumes on graft or patient survival. Some evidence that charges are lower for larger centers was found. The authors conclude that the evidence implies that using volume as the provider characteristic upon which to base designation of transplantation centers is problematic, at least for kidney transplants. Steps policymakers might take to ensure quality of transplantation services is discussed in the final section.

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