Wednesday, May 04, 2005
Let Them Live: A Proposal for a Market in Kidney Procurement
Let Them Live: A Proposal for a Market in Kidney Procurement
Every year, thousands of individuals die awaiting kidney transplants. The official—and, presumably, undercounted--waiting list approaches 42,000 people as of 1998 (Kaserman 17). The problem is simple and those facts are salient; a shortage of kidneys afflicts all who have come by end-stage renal disease. Not only is the problem simple—so is the solution. The only obstacle to saving these lives is the lack of will arising from misplaced ethical objections and from financial self-interest. The well-known story of Mickey Mantle having received special treatment in the acquisition of his kidney in 1996 serves to illustrate the point: this country faces a shortage of kidneys, and the hard ethical choices of allocation that follow proceed as logically as night follows day.
As students of economics, you should be aware of the classic problem of a shortage. It occurs as predictably in a market for organs as it would in a market for oranges or automobiles, when certain conditions take place. As Andy H. Barnett and others warn, “responsibility for the unnecessary deaths and human suffering that are caused by this policy-created shortage falls squarely on the sponsors and supporters of the ill-conceived law that proscribes voluntary market exchange at a positive price” (Tabarrok 91). The condition which ensures a shortage occurs is when the price available to market participants—to buyers and sellers—is set below that which they would freely agree upon. As a result, demand exceeds supply, and some would-be recipients are left without the benefits of supply. This is the case in the system of organ transplants, where the price is set at zero. This follows upon the act of Congress of 1984, the National Organ Transplant Act, which codified the existing practice. Before then, organs were largely transferred between family members who were willing to act outside of a market; but, improvements in organ transplant technology developed, like, notably, cyclosporine to counteract the body's inclination to reject organs. Instead of permitting the market to develop as it naturally would have, the implementation of the law made it so that those who would otherwise have been willing to part with their organs for pay were barred from doing so. Andy H. Barnett and others explain that “with the price fixed at zero, altruism is the sole motivating force for generating a supply of cadaveric organs” (Andy H. Barnett 2). This is the system as it currently exists.
The United Network for Organ Sharing procures organs from those donors willing to donate from mere altruism. It faces two major problems, however: the failure of treatment providers (like doctors and nurses) to ask would-be donors to part with their organs (the failure-to-ask problem); and the failure of would-be donors to part with what they would do so for compensation (failure-to-donate problem). Furthermore, it should be noted in passing that the system has been credibly accused of allocating organs inequitably as a result of the necessary hard choices. William Barnett and colleagues find that “the literature indicates that certain groups in society are currently underepresented... [including] the elderly, people with physical disabilities, people with mental disabilities, and minorities” (Barnett 376). For all its problems, though, it is not for the system's inability to capitalize on the altruistic spirit that it founders. Indeed, reforms which intend to better inform the would-be donors have been implemented, as have reforms to regularize the referral of the information regarding available donors by the care-givers to the organ procurement system.
Such reforms (known in the literature as routine request and required referral) have failed. Other reforms which fail to address the heart of the problem—an economic one—will fail as well. One such solution is called presumed consent, whereby the would-be donor has, in effect, his property right to his kidneys weakly transferred to the future recipient, until such time as the would-be donor formalizes his will to keep his kidneys intact. It will be apparent that this solution stands in tension with the autonomy of the donor, and, taken to its extreme, the solution resembles another proposal: conscription, or, the organ draft. At first blush, it appears that this solution should solve the problem thoroughly, by taking the organs from those who die under the right conditions. However, a major shortcoming presents itself to students of economics, and in particular of welfare economics. Because the price set lies below that at which certain suppliers are willing to part, and because the suppliers with the highest (subjective) costs of supplying organs are treated in the same way as those with the lowest (subjective) costs of supplying organs, the outcome ensues in which organs may be procured from those individuals with “strong views in opposition to such an action, perhaps on the basis of religious beliefs” (Kaserman 47) even before they come from those individuals willing to supply them. This arrangement represents a major loss of utility that can be avoided, as we shall see. Furthermore, a conscription is likely to encounter practical resistance and legal troubles.
One final alternative solution should be considered, before I present to you the one which I believe addresses the problem most fully. This is the so-called compensation solution, whereby would-be donors are compensated at a prearranged price set by the procurement system (UNOS). The problems are twofold with this. One is that the price set would be only a guess at the price as set by market forces. Bureaucratic diktat rather than the agents of buyer and seller freely interacting would set the price. The other problem is the crucial one that it fails to address the failure-to-ask problem. As we have seen, doctors and nurses face psychological costs in approaching the grieving relatives of the recently deceased to inquire into their proclivity to donate organs. They face no financial incentive to overcome these psychological costs, however; so, many organs that would be donated, if asked of the donor, are not.
We have explored several alternative solutions and found them lacking. What, then, is left to propose, but the most obvious one to students of the field most directly invested in a thorough solution to the problem. I say this of you because I claim that economics is the discipline best designed for a solution to this problem. Economics, as you know, is the science of scarcity and the ways and means of various systems of working around scarcity. The problem at hand is fundamentally a problem of scarce resources—not enough kidneys to meet the demand. The solution is, simply, that we must legalize a market for kidney sales.
To be clear, let me note at the outset what I do not propose or envision. I do not envision auctions by patients of end-stage renal disease battling it out for a kidney. This is because I foresee that, with the problem of shortages overcome, the problem of allocation would no longer be of great importance; enough kidneys would be in the market to go around. I do not specifically propose the sale of organs from live donors—not because I do not believe such a system would offer the same benefits as of cadaveric organs, but because the result of a market in cadaveric organs would so alleviate the problem of scarcity that the greater-cost process of procurement from live donors would be curtailed. Finally, I do not propose a market for the allocation of the organs (for all the good that that may do), instead focussing on the problem of procurement, and leaving to the side the option of leaving the United Network for Organ Sharing to distribute the organs on the basis it sees fit.
How a market might operate is an important question which should be addressed at least briefly. Organ procurement firms would pay donors at market-determined prices. They would pay in either a futures market—for the rights at time of death—or a spot market—for the rights to the organs of the recently deceased. They would sell the harvested organs to transplant centers. The price of the organs would be added to the cost of the transplant. One possible system in which this would occur would involve having the health-insurance companies act as the organ procurement firms, deducting a sum from the premiums of sellers and being reimbursed by transplant centers.
The next important point to be made is the manner in which the supply and demand curves, as may be reasonably predicted based on basic economics and preliminary data, would support certain beneficial effects with respect to the functioning of a market. First, note that the supply curve would likely be price-elastic, that is, highly responsive to changes in price. This means that the number of organs procured would be great with only small changes in price. The reason for this is that most people place small opportunity cost on their organs, as their main alternative use is to feed the worms, so to speak. The second observation to make regarding the supply and demand curves is that the demand curve would likely be relative price-inelastic, or unresponsive to changes in price in quantity demanded. The reasons for this are twofold. One, because organ transplants are paid for by a third party, the Federal End Stage Renal Disease program, the demand would vary little with price. Two, the same effect results from the fact that few subsitutes exist for transplantation--dialysis being a poor substitute. The outcome of this fact would be that the number of organs supplied at the market price would very nearly equal the number that would be demanded at price of zero, and hence, that the allocation of organs would become a trivial problem. I note in passing that the presence of the prevailing third party payment makes it unnecessary that poor people would be priced out of the market.
It is obvious that the financial incentive offered to the potential donor would induce a greater supply. What must also be noted is how a market deals with the presently existing failure-to-ask problem (in which doctors fail to ask donors). Because the organ procurement firms would treat organs as valuable commodities, they would clearly have an incentive to broach the sensitive subject with potential donors. Hence, the problem of organ supply would be met at both ends—the supplier and the demander.
It is worth considering some of the side effects that would benefit society as a result of a functioning market. One concerns the great costs of dialysis which today are needed as an imperfect substitute for transplantation, but which would potentially be saved in the event of a greater supply of organs. Associated with this are the intangible costs of dialysis which patients incur, in such medical effects as loss as of energy and in such other effects as the amount of time needed to be connected to the machine. Of the 185,000 dialysis patients, only 24% appear on the waiting lists for transplants, indicating just how extensive the costs are, as compared with the figures at first glance (Kaserman 34). Two, the induced enlargement of the supply of kidneys from the cadaveric market would price out of existence the supply of kidneys from live donors: a supply which comes at a greater financial cost. The benefits of this would mean less disruption of life for donors and the disposal of the need to ask difficult ethical questions concerning the sales of organs from live donors. Also, as the idea of organ donation becomes less and less novel as a result of the increased incentives, we may expect that the desire to bury the body intact will wane. Finally, we may expect, as does Marvin Brams, that success rates for transplant operations would improve, as the increased quantity of organs allows for better tissue matching between donor and recipient (Brams 190).
With all the benefits as considered above, one may wonder what the objections are. One prominent one concerns the supposed practice of so-called economic coercion against donors. That is, it is presumed that the poor would be prevailed upon against their will to become donors, despite their better judgment. It is, however, a bizarre notion of coercion that condemns a man to poverty in the name of freeing him from himself, for such situations in which the man may position himself to extricate himself from poverty by way of his donation. As ethicist J. Radcliffe-Richards and others note, “the worse we think the selling of a kidney, therefore, the worse should seem the position of the vendors when that option is removed” (Caplan 225). It is more harmful to the vendor to remove one of his choices than to leave him free to exercise it.
Another objection concerns the pricing of the poor out of the market for such a vital resource. As has been noted, however, the presence of the third-party payment system already in place would ensure that such would not happen. Additionally, we may note that one countervailing effect of the increased price of the organ on the surgery would be the fall in the price of the service of surgery itself, as the increased supply of organs would induce surgeons to enter that field. Stephanie R. Murphy notes the contrast of the comparatively low price of organs to the costs associated with waiting: “Regardless of a patient’s financial status, a condition which requires having an organ transplant is bound to incur huge costs” (Murphy 2). Finally, as Roger D. Blair and David L. Kaserman explain, the cost savings that the Federal End Stage Renal Disease program gain, which would come from savings in advertising to persuade donors and from not needing to pay for dialysis, could help fund even more transplants for persons without financial means (Blair 448).
The ethical objections appear to be disposed of rather easily. What may then account for the entrenched position of the argument against markets may be mere self-interest, subconsciously understood as the case may be. Transplant suppliers—doctors and hospitals—as represented, for example, by the American Medical Association, stand to lose in a market setting, as the economic 'rents' or artificial profits from their limited supply would be eroded in the event of increased entry into the profession. The other major loser in a market environment would be the Organ Procurement and Transplantion Network (OPTN) and the United Network for Organ Sharing, the two organizations set up by the National Organ Tranplant Act, the former of which has a monopoly on the registry of organ donors, and the latter of which undertakes the task of procuring organs.
I have looked at the nature and history of the problem, at alternative proposals for the resolution of the problem, and proposed the solution of allowing a market to operate in organ procurement. I have shown how economics works in the favor of patients and donors alike, especially by virtue of the shapes of the demand and supply curves likely to ensue. I have shown the various side benefits which result from markets. Finally, I have demonstrated the emptiness of the ethical objections to the market. As students of economics, it is your job and duty to go forth and educate others in these neglected truths. You may yet be professors, with an intellectual duty to teach your students and to further the research. You may yet be businessmen, with a general duty to be aware of these things. In any event, and whatever your situation, please remember the benefits a market would bring to the many suffering patients of kidney disease.
Works Cited
Barnett, Andy H. and Roger D. Blair. “A Market for Organs.” Society 33.
Barnett, William, et al. “A Free Market in Kidneys: Efficient and Equitable.” The Independent Review 5: 373-385.
Blair, Roger D. and David L. Kaserman. “The Economics and Ethics of Alternative Cadaveric Organ Procurement Policies.” Yale Journal of Regulation 8: 403-452.
Brams, Marvin. “Transplantable Human Organs: Should Their Sale Be Authoriuzed by State Statutes?” American Journal of Law and Medicine 3: 183-95.
Caplan, Arthur R. and Daniel H. Coelho, ed. The Ethics of Organ Transplants: The Current Debate. Amherst NY: Prometheus Books, 1998.
Kaserman, David L. and A.H. Barnett. The U.S. Organ Procurement System: A Prescription for Reform. Washington DC: AEI Press, 2002.
Murphy, Stephanie R. “Eight Ethical Objections to an Organ Market... and Why They're Wrong.” LewRockwell.com. 3 January 2005. 3 pages. 5 April 2005.
Tabarrok, Alexander, ed. Entrepreneurial Economics: Bright Ideas from the Dismal Science. Oxford: Oxford University Press, 2002.
Every year, thousands of individuals die awaiting kidney transplants. The official—and, presumably, undercounted--waiting list approaches 42,000 people as of 1998 (Kaserman 17). The problem is simple and those facts are salient; a shortage of kidneys afflicts all who have come by end-stage renal disease. Not only is the problem simple—so is the solution. The only obstacle to saving these lives is the lack of will arising from misplaced ethical objections and from financial self-interest. The well-known story of Mickey Mantle having received special treatment in the acquisition of his kidney in 1996 serves to illustrate the point: this country faces a shortage of kidneys, and the hard ethical choices of allocation that follow proceed as logically as night follows day.
As students of economics, you should be aware of the classic problem of a shortage. It occurs as predictably in a market for organs as it would in a market for oranges or automobiles, when certain conditions take place. As Andy H. Barnett and others warn, “responsibility for the unnecessary deaths and human suffering that are caused by this policy-created shortage falls squarely on the sponsors and supporters of the ill-conceived law that proscribes voluntary market exchange at a positive price” (Tabarrok 91). The condition which ensures a shortage occurs is when the price available to market participants—to buyers and sellers—is set below that which they would freely agree upon. As a result, demand exceeds supply, and some would-be recipients are left without the benefits of supply. This is the case in the system of organ transplants, where the price is set at zero. This follows upon the act of Congress of 1984, the National Organ Transplant Act, which codified the existing practice. Before then, organs were largely transferred between family members who were willing to act outside of a market; but, improvements in organ transplant technology developed, like, notably, cyclosporine to counteract the body's inclination to reject organs. Instead of permitting the market to develop as it naturally would have, the implementation of the law made it so that those who would otherwise have been willing to part with their organs for pay were barred from doing so. Andy H. Barnett and others explain that “with the price fixed at zero, altruism is the sole motivating force for generating a supply of cadaveric organs” (Andy H. Barnett 2). This is the system as it currently exists.
The United Network for Organ Sharing procures organs from those donors willing to donate from mere altruism. It faces two major problems, however: the failure of treatment providers (like doctors and nurses) to ask would-be donors to part with their organs (the failure-to-ask problem); and the failure of would-be donors to part with what they would do so for compensation (failure-to-donate problem). Furthermore, it should be noted in passing that the system has been credibly accused of allocating organs inequitably as a result of the necessary hard choices. William Barnett and colleagues find that “the literature indicates that certain groups in society are currently underepresented... [including] the elderly, people with physical disabilities, people with mental disabilities, and minorities” (Barnett 376). For all its problems, though, it is not for the system's inability to capitalize on the altruistic spirit that it founders. Indeed, reforms which intend to better inform the would-be donors have been implemented, as have reforms to regularize the referral of the information regarding available donors by the care-givers to the organ procurement system.
Such reforms (known in the literature as routine request and required referral) have failed. Other reforms which fail to address the heart of the problem—an economic one—will fail as well. One such solution is called presumed consent, whereby the would-be donor has, in effect, his property right to his kidneys weakly transferred to the future recipient, until such time as the would-be donor formalizes his will to keep his kidneys intact. It will be apparent that this solution stands in tension with the autonomy of the donor, and, taken to its extreme, the solution resembles another proposal: conscription, or, the organ draft. At first blush, it appears that this solution should solve the problem thoroughly, by taking the organs from those who die under the right conditions. However, a major shortcoming presents itself to students of economics, and in particular of welfare economics. Because the price set lies below that at which certain suppliers are willing to part, and because the suppliers with the highest (subjective) costs of supplying organs are treated in the same way as those with the lowest (subjective) costs of supplying organs, the outcome ensues in which organs may be procured from those individuals with “strong views in opposition to such an action, perhaps on the basis of religious beliefs” (Kaserman 47) even before they come from those individuals willing to supply them. This arrangement represents a major loss of utility that can be avoided, as we shall see. Furthermore, a conscription is likely to encounter practical resistance and legal troubles.
One final alternative solution should be considered, before I present to you the one which I believe addresses the problem most fully. This is the so-called compensation solution, whereby would-be donors are compensated at a prearranged price set by the procurement system (UNOS). The problems are twofold with this. One is that the price set would be only a guess at the price as set by market forces. Bureaucratic diktat rather than the agents of buyer and seller freely interacting would set the price. The other problem is the crucial one that it fails to address the failure-to-ask problem. As we have seen, doctors and nurses face psychological costs in approaching the grieving relatives of the recently deceased to inquire into their proclivity to donate organs. They face no financial incentive to overcome these psychological costs, however; so, many organs that would be donated, if asked of the donor, are not.
We have explored several alternative solutions and found them lacking. What, then, is left to propose, but the most obvious one to students of the field most directly invested in a thorough solution to the problem. I say this of you because I claim that economics is the discipline best designed for a solution to this problem. Economics, as you know, is the science of scarcity and the ways and means of various systems of working around scarcity. The problem at hand is fundamentally a problem of scarce resources—not enough kidneys to meet the demand. The solution is, simply, that we must legalize a market for kidney sales.
To be clear, let me note at the outset what I do not propose or envision. I do not envision auctions by patients of end-stage renal disease battling it out for a kidney. This is because I foresee that, with the problem of shortages overcome, the problem of allocation would no longer be of great importance; enough kidneys would be in the market to go around. I do not specifically propose the sale of organs from live donors—not because I do not believe such a system would offer the same benefits as of cadaveric organs, but because the result of a market in cadaveric organs would so alleviate the problem of scarcity that the greater-cost process of procurement from live donors would be curtailed. Finally, I do not propose a market for the allocation of the organs (for all the good that that may do), instead focussing on the problem of procurement, and leaving to the side the option of leaving the United Network for Organ Sharing to distribute the organs on the basis it sees fit.
How a market might operate is an important question which should be addressed at least briefly. Organ procurement firms would pay donors at market-determined prices. They would pay in either a futures market—for the rights at time of death—or a spot market—for the rights to the organs of the recently deceased. They would sell the harvested organs to transplant centers. The price of the organs would be added to the cost of the transplant. One possible system in which this would occur would involve having the health-insurance companies act as the organ procurement firms, deducting a sum from the premiums of sellers and being reimbursed by transplant centers.
The next important point to be made is the manner in which the supply and demand curves, as may be reasonably predicted based on basic economics and preliminary data, would support certain beneficial effects with respect to the functioning of a market. First, note that the supply curve would likely be price-elastic, that is, highly responsive to changes in price. This means that the number of organs procured would be great with only small changes in price. The reason for this is that most people place small opportunity cost on their organs, as their main alternative use is to feed the worms, so to speak. The second observation to make regarding the supply and demand curves is that the demand curve would likely be relative price-inelastic, or unresponsive to changes in price in quantity demanded. The reasons for this are twofold. One, because organ transplants are paid for by a third party, the Federal End Stage Renal Disease program, the demand would vary little with price. Two, the same effect results from the fact that few subsitutes exist for transplantation--dialysis being a poor substitute. The outcome of this fact would be that the number of organs supplied at the market price would very nearly equal the number that would be demanded at price of zero, and hence, that the allocation of organs would become a trivial problem. I note in passing that the presence of the prevailing third party payment makes it unnecessary that poor people would be priced out of the market.
It is obvious that the financial incentive offered to the potential donor would induce a greater supply. What must also be noted is how a market deals with the presently existing failure-to-ask problem (in which doctors fail to ask donors). Because the organ procurement firms would treat organs as valuable commodities, they would clearly have an incentive to broach the sensitive subject with potential donors. Hence, the problem of organ supply would be met at both ends—the supplier and the demander.
It is worth considering some of the side effects that would benefit society as a result of a functioning market. One concerns the great costs of dialysis which today are needed as an imperfect substitute for transplantation, but which would potentially be saved in the event of a greater supply of organs. Associated with this are the intangible costs of dialysis which patients incur, in such medical effects as loss as of energy and in such other effects as the amount of time needed to be connected to the machine. Of the 185,000 dialysis patients, only 24% appear on the waiting lists for transplants, indicating just how extensive the costs are, as compared with the figures at first glance (Kaserman 34). Two, the induced enlargement of the supply of kidneys from the cadaveric market would price out of existence the supply of kidneys from live donors: a supply which comes at a greater financial cost. The benefits of this would mean less disruption of life for donors and the disposal of the need to ask difficult ethical questions concerning the sales of organs from live donors. Also, as the idea of organ donation becomes less and less novel as a result of the increased incentives, we may expect that the desire to bury the body intact will wane. Finally, we may expect, as does Marvin Brams, that success rates for transplant operations would improve, as the increased quantity of organs allows for better tissue matching between donor and recipient (Brams 190).
With all the benefits as considered above, one may wonder what the objections are. One prominent one concerns the supposed practice of so-called economic coercion against donors. That is, it is presumed that the poor would be prevailed upon against their will to become donors, despite their better judgment. It is, however, a bizarre notion of coercion that condemns a man to poverty in the name of freeing him from himself, for such situations in which the man may position himself to extricate himself from poverty by way of his donation. As ethicist J. Radcliffe-Richards and others note, “the worse we think the selling of a kidney, therefore, the worse should seem the position of the vendors when that option is removed” (Caplan 225). It is more harmful to the vendor to remove one of his choices than to leave him free to exercise it.
Another objection concerns the pricing of the poor out of the market for such a vital resource. As has been noted, however, the presence of the third-party payment system already in place would ensure that such would not happen. Additionally, we may note that one countervailing effect of the increased price of the organ on the surgery would be the fall in the price of the service of surgery itself, as the increased supply of organs would induce surgeons to enter that field. Stephanie R. Murphy notes the contrast of the comparatively low price of organs to the costs associated with waiting: “Regardless of a patient’s financial status, a condition which requires having an organ transplant is bound to incur huge costs” (Murphy 2). Finally, as Roger D. Blair and David L. Kaserman explain, the cost savings that the Federal End Stage Renal Disease program gain, which would come from savings in advertising to persuade donors and from not needing to pay for dialysis, could help fund even more transplants for persons without financial means (Blair 448).
The ethical objections appear to be disposed of rather easily. What may then account for the entrenched position of the argument against markets may be mere self-interest, subconsciously understood as the case may be. Transplant suppliers—doctors and hospitals—as represented, for example, by the American Medical Association, stand to lose in a market setting, as the economic 'rents' or artificial profits from their limited supply would be eroded in the event of increased entry into the profession. The other major loser in a market environment would be the Organ Procurement and Transplantion Network (OPTN) and the United Network for Organ Sharing, the two organizations set up by the National Organ Tranplant Act, the former of which has a monopoly on the registry of organ donors, and the latter of which undertakes the task of procuring organs.
I have looked at the nature and history of the problem, at alternative proposals for the resolution of the problem, and proposed the solution of allowing a market to operate in organ procurement. I have shown how economics works in the favor of patients and donors alike, especially by virtue of the shapes of the demand and supply curves likely to ensue. I have shown the various side benefits which result from markets. Finally, I have demonstrated the emptiness of the ethical objections to the market. As students of economics, it is your job and duty to go forth and educate others in these neglected truths. You may yet be professors, with an intellectual duty to teach your students and to further the research. You may yet be businessmen, with a general duty to be aware of these things. In any event, and whatever your situation, please remember the benefits a market would bring to the many suffering patients of kidney disease.
Works Cited
Barnett, Andy H. and Roger D. Blair. “A Market for Organs.” Society 33.
Barnett, William, et al. “A Free Market in Kidneys: Efficient and Equitable.” The Independent Review 5: 373-385.
Blair, Roger D. and David L. Kaserman. “The Economics and Ethics of Alternative Cadaveric Organ Procurement Policies.” Yale Journal of Regulation 8: 403-452.
Brams, Marvin. “Transplantable Human Organs: Should Their Sale Be Authoriuzed by State Statutes?” American Journal of Law and Medicine 3: 183-95.
Caplan, Arthur R. and Daniel H. Coelho, ed. The Ethics of Organ Transplants: The Current Debate. Amherst NY: Prometheus Books, 1998.
Kaserman, David L. and A.H. Barnett. The U.S. Organ Procurement System: A Prescription for Reform. Washington DC: AEI Press, 2002.
Murphy, Stephanie R. “Eight Ethical Objections to an Organ Market... and Why They're Wrong.” LewRockwell.com. 3 January 2005. 3 pages. 5 April 2005.
Tabarrok, Alexander, ed. Entrepreneurial Economics: Bright Ideas from the Dismal Science. Oxford: Oxford University Press, 2002.
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