The cost-benefit approach to an optimal charging scheme for an embryo storage service

Yael Lahav, Avi Herbon and Uriel Spiegel

Operations Research Perspectives, 2023, vol. 10, issue C

Abstract: Cryostorage of human embryos produced during the course of in vitro fertilization (IVF) treatment is an important issue for hospitals, governments and individuals who are facing fertility challenges. Embryo cryostorage is giving rise to increasing economic, ethical and legal concerns due to the increasing holding and operational costs of storage, the rise in the number of unused embryos, and the absence of economic incentives for hospitals to provide free cryostorage services. These issues may reduce the availability of storage services and encourage individuals to seek embryo donations from abroad with attendant medical risks and the possibility of illegal transactions. Given that both public and private healthcare institutions are increasingly motivated by economic factors, increasing the economic incentive to offer cryostorage has the potential to increase the provision of storage facilities. This paper proposes a nonlinear programming model to enable a hospital or other service provider to determine the optimal price it should charge for storage. The suggested pricing policy comprises three components; however, our analysis shows that an optimal solution can only include a maximum of two of these components. Finally, the paper introduces a numerical example as well as a real-data comparison among several providers to demonstrate the applicability and value of the proposed model.

Keywords: Pricing policy; Revenue management; Decision making; Three-part tariff; IVF (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:oprepe:v:10:y:2023:i:c:s2214716023000167

DOI: 10.1016/j.orp.2023.100281

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