Only Musical Organs Belong on eBay

I had my students present and discuss a study of the market for organ donations. The study points out that prices are not used to elicit supply of live organs or to ration demand, and that the shortage (waiting list) of kidneys and livers has been increasing.

The authors propose using prices to reduce the shortage of both live donations and cadaver organs.

If this were a market for beans, or water, or even housing — where the price is kept low because of government restrictions — I would agree completely. But in this market, it’s hard to agree entirely.

Perhaps on the supply side, why shouldn’t someone donate a kidney, perhaps earn $15,000, if s/he wishes to? So long as the donation locations are regulated, people should be able to offer informed consent in the face of the increasingly well-known (and decreasing) risks of donating.

On the demand side, however, allowing people to bid for organs seems repugnant to me. (I do not want livers — except perhaps foie gras — on eBay!) Ethically, it seems wrong to let richer people move to the front of queues for scarce organs (to let the market implicitly value their lives more than those of poorer people).

So here’s a case where even a free-market economist might not welcome the full working of the market and might instead prefer governmental, or quasi-governmental rationing of a scarce resource. At least in part, equity would trump efficiency.


Bill Callahan

One thing that often happens is that someone needs a kidney, and a family member is willing to donate his (or hers), but there isn't a match. So, there is actually a matching service which allows families to donate to a stranger that they match, and in return their family member gets a donation of kidney that matches. This has increased the number kidney transplants and saved lives.

Most people don't have a problem with a matching service like this, but what if it expanded to liver transplants, and then mixed organ transactions, such as kidneys for liver. What if there were a "banking" aspect which allowed a person to donate in case some other donation is needed in the future, or to receive an organ with a promise leave their organs upon death, or simply when they are healthy enough to donate while alive?

If the bottom line is to get more lives saved by increasing the number of organ transplants, how much is that worth in dollars? If it's nonzero, why not allow payments?

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P

Some other points to consider without even delving into the ethical implications:

*With regards to organ transplants, the demand will always FAR exceed the supply, so it is difficult to establish market equilibrium.

*The actual costs of organ transplantation (pre-operative, operative, and post-operative) usually run from several hundred thousands to millions, very little of which is directly paid by the recipient (invariably, most is paid by insurance and Medicare)

*Free markets establish value for consumer goods, but how does one begin to place a dollar value on human life?

Leo

We free marketeers want government rationing of organs like we want government rationing of housing, education, and health services.

Subsidize the poor, if you'd like, but I find a policy of allowing the rich to die unnecessarily to be repugnant.

Kevin H

I think the big difference between organs and safe cars is flexibility in production capacity.

If everyone highly valued safe cars, more could be produced. If medical care were highly valued, more emphasis on medical education could adjust for demand. This behavior also has the large scale effect of increasing the desired outcome at all levels. Safer cars become cheaper, and more medical knowledge would spread throughout the population; 'raising the tide' so to speak. This ensures that while the rich benefit first, everyone benefits in the long run.

However, with organs, there is currently no way to adjust or positively effect their production. We cannot simply make more, nor do the benefits of increased demand ripple through the economy. Either way, free or payed for, the organs save the same number of lives. Everyone can't win, even in the long run. If stem cell technology advances to the point where we can grow donor organs, then this no longer applies. We can just make more and higher quality organs; everyone can win.

So I agree with Mr. Hamermesh. Increasing supply a little bit by paying for donation sounds reasonable, but allowing for one to bid on organs is not beneficial to society.

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Seannibal

The problem that arises when you start to think of this as a 'free market' problem, rather than an ethical issue, can come back to supply.

China RIGHT NOW is selling organs taken from executed prisoners. http://news.bbc.co.uk/2/hi/asia-pacific/5386720.stm
Considering the make-up of the Chinese prison population, is it worth it? In my opinion (and possibly Larry Niven's as well,) THIS is the danger of looking at organ donation (or, indeed, most health care issues) from a strict dollar bottom line.

Oana

I agree: the poor takes the money, the rich is healed...but what about the cases when people are killed for their organs? Things are out of control...this is actually happening.

Naim

I would like to see the demographics of who is in need of kidney transplants. How many of them are 'rich?' And who is on the waiting list? Are they 'poor?'

MIchael

Why not a an organ supplier, an Innards Middle Man? Government subsidized and grant-underwritten, it could buy organs from willing donors and then provide them to those who can afford them at "market" value (though which market would determine that I'm not sure, hopefully not India), while also providing financial aid to those who can't. We already do this with things like college tuition, why not with organs? A third-party non or not-for-profit might also provide more accountability, especially if it were governed by a board of medical professionals.

DJH

An easy way to increase the number of organs available for donation in the US, without costing anyone a penny, would be to change the current "opt-in" system to an "opt-out." That is, everyone who dies is assumed to be an organ donor unless next-of-kin take steps to prevent it.

Currently the system allows organ donation ONLY if next-of-kin expressly permit it. Many times this means that the organs of willing donors are never actually donated, due to the squeamishness of next-of-kin.

Of course, this applies only to organ donation by the deceased, not the living. Still, it's preposterous that we would even begin to think of paying living donors to give up e.g. a kidney, when plenty of perfectly-fine kidneys get buried or cremated, every day.

Unfortunately, the same squeamishness that sometimes prevents next-of-kin from donating organs, also appears to grip our policy-makers. This is a topic that Americans really need to get over; too many people are suffering or dying needlessly, in the name of mass immaturity, insecurity, and squeamishness.

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david

Given all the other ways in which the lives of the rich are implicitly valued over others', I think it's fairly hypocritical to shut down this channel.

Unless you plan to address the others...?

Ranjit Mathoda

One could argue that it's just as morally repugnant for plenty of people die or live far worse lives for long periods of time because other people are uncomfortable with them having the freedom to pay for an organ from someone who wants the freedom to sell it to them. One person's moral repugnance is another's cup of tea, but even in a democracy the majority's moral repugnance gets to dictate what the minority can do.

Selling dead bodies seems morally repugnant as does making them into plastic, but the first act was responsible for a tremendous amount of medical knowledge we rely on today, and the second act now tours the world in a very visited exhibit called Bodyworlds.

scottro

The market already determines the cost of health care. If organ transplants are under the banner of health care, the market should set the price as well.

Organs on eBay? Why not? With the proper safety regulations in place, it's a perfect opportunity for someone to save the life of a loved one.

Excluding the wealthy from making these purchases because they have more money is just another form of class warfare in favor of those less fortunate. Punishing the success of others is not the way to create equality.

Jeff

If selling organs were legal, two important benefits would occur:

1. The poor would profit as organ sellers.
2. More organ transplats would occur.

And for us repugnanted by the process we do not have to participate in the the ordeal...until we need a kidney to save our life or a few bucks to help pull us out of poverty.

Matt

Iran is one of the only countries in the world that has eliminated its kidney shortage. Incidentally, they've also legalized payments to kidney donors.

Marginal Revolution wrote about it a few days ago.
http://www.marginalrevolution.com/marginalrevolution/2008/04/financial-compe.html

Carl

@19: I think your logic is partially wrong. Person A will wait longer if the first kidney to become available is a free market kidney. In the current system, Person A will get the first kidney available no matter what. In a free market system, they would have to wait for the first altruistic kidney, which is potentially a smaller supply now.

And once cash and a market is involved, the kidneys of dead people theoretically become willable property of their estate and may not necessarily enter the altruistic donor channel. If I knew my dead body were now potentially worth $200k (because in a dead body, every transplantable organ would be worth something as compared to only kidneys in a living person), wouldn't I will my body down to my family rather than donate it?

@everyone else: Some questions for supporters: in a free market organ donation system with no price constraints, will insurance companies be willing to pay prices at 20k? 50k? 100k? Or will insurance companies relegate covered people to the altruistic system? In which case free market kidneys will truly become a market solely for millionaires and up?

The market I immediately see forming is something akin to concert tickets. I see demand far out-stripping supply, especially with obesity and diabetes a continuing and growing problem.

Also, has anyone considered the after effects for the donors (and society)? I would venture to say that most participants on the supply side would be poor in the first place, who else except the desperate would undergo serious surgery for $15k? They arguably have poorer insurance options. What of the future burden on society when they need dialysis in 20-30 years?

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Brad

Provide for a special organ purchase tax and use the proceeds to subsidize low income organ recipients in their purchases of organs. Poor dying people like filling out government forms, right?

Ooh! Or you could do something where organ recipients are advanced up the waiting list if they have a family member or friend donate an organ. Certainly the sponsor donor wouldn't generally match the person he is sponsoring, but he would match somebody.

chase

In regards to organ sales.

How can you, as an economist, view this in such static terms? If organs could be sold, that would increase the supply of organs on the market so the "rich" would not be skipping the line, they would be shortening the line by removing themselves from it. Obviously regulation would be required but the core concepts of supply/demand still exist.

Thanks,
Chase

William Bulkeley

It seems to me that fixing a price for an organ sale is just as bad from an equity point of view as letting rich people bid. If the governement will pay $15,000 for a donated kidney, that won't tempt Alex Rodriguez to donate one, even though he probably has fine kidneys. But it would tempt a poor person with bills to pay. So the equity argument against paying for organs remains strong. Perhaps the benefit of having an adequate supply of donated organs outweighs the fairness consideration in this case, however.

Mike B

As much as it stinks that the wealthy would receive better medical care one simply needs to place the two situations side by side.

Without an organ market the person in organ failure dies and the poor donor remains poor. With am market the person in organ failure lives and the donor receives a financial boost. It's a win win situation just lime most market transactions.

The reality is that the wealthy are already receiving better medical care and probably wouldn't need a transplant in the first place due to access to better food and a healthier lifestyle. By outlawing an organ market all you achieve aside from killing people is forcing those that can afford it to go to India where the "market" is has little or no regulation (see recent news reports on the organ theft ring that was recently busted).

If you want to achieve a better level of equality you should support the wealthy transferring sizable amount of their wealth to the less fortunate via taxes, stupid luxury spending and yes, payment for organs.

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Kevin

While I agree that an auction-based system is not the most fair way to determine who receives an organ, I can see ways that a government rationing system could be unfair as well. If the decision were just determined by the hospital or surgeon performing the operation it would leave the door open for all kinds of scandalous behaviour (bribery, political queue-jumping, being golf buddies with the chief of staff, etc). The rationing system would need to be transparent to society so if someone cries foul because the mayor got a kidney before their teenager there will be a comparison showing that he needed it more than she did.
On the supply side, I don't see how having a set price of $15,000 (or whatever the market-clearing value ends up being) is much worse than an auction system. People who value $15,000 less than their kidney will not enter the market and those who value it more will enter the market receiving whatever producer surplus is the difference. I don't see this as more or less repugnant than an auction system. It's just that there is a single bid rather than many. The rich will likely still keep their kidneys.

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