Background: Behavioral reference points partition preferences and define the regions over which an outcome is perceived as a “gain” or “loss.” Whether or not behavioral reference points generate loss aversion where physician preferences change depending on whether or not they are above or below the reference point is investigated. Two potential reference points are explored: (1) a regulatory induced reference point created by the Centers for Medicare and Medicaid Services (CMS) Conditions of Participation (CoP); and (2) kidney donor risk index (KDRI).

Methods: UNOS data on 187 high-volume transplant centers from 6/30/2007- 6/30/2010 was used to analyze the utilization decisions from 2,010,966 deceased donor kidney match run offers resulting in 29,552 transplants. Using SRTR program reports indicator variables were constructed for whether or not a center did not meet the CMS CoP for either 1-year patient or graft survival. The KDRI was constructed with donor information. A series of probit regressions were estimated using the CMS CoP indicators and the KDRI by determining the marginal effect of being above or below the median KDRI or the CMS CoP.

Results: The probability of accepting an organ increases in the quality of the donor organ for all regions. For two regions the probability of acceptance decreased when they did not meet the CMS CoP (below the regulatory reference point) (p-values < 0.10) and for five regions it increased (p-values < 0.10). For five regions physician preferences over organ quality generated behavior consistent with loss aversion (p-values < 0.05). For these five regions a larger increase in organ quality is required below the KDRI reference point than above it to generate an organ acceptance decision. For three regions (subset of those who increased utilization when CMS CoP not met) the interaction of the CMS CoP and KDRI reference points further exacerbated the impact of the KDRI reference point (p-values < 0.10), negating the positive effect observed for the CMS CoP reference point.

Conclusion: Physicians utilize behavioral reference points that facilitate the decision process but generate loss aversion. Physicians value improvement in organ quality more when the organ is below the median quality than above it. The regulatory environment also generates a reference point that for some regions exacerbates this outcome. Understanding the use of behavioral reference points may facilitate our understanding of organ utilization.

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