Market Incentives Applied to Organ Transplants

By Bobby Ahluwalia

During the last decade there have been enormous advances in the transplantation of vital human organs.  Unfortunately, the benefits from these operations have been limited due to the shortage of available organs.  The current rationing system has repeatedly proven to be ineffective and inefficient.  As a result, there have been numerous proposals to help improve this terrible situation.  In my thesis, after providing a background, I will analyze various popular proposals.  I will then provide my personal opinion as to the best solution to the problem of organ shortages.  I would like to use some data analysis in order to support my conclusions.  

            I will first provide a brief history of organ transplants and the governmental regulation of them.  Basically, in 1984, Congress passed the National Organ Transplant Act, which outlawed the buying and selling of internal organs.  Therefore, the United States relies on a voluntary, altruistic system for supplying organs for transplantations.  The United Network for Organ Sharing (UNOS) allocates these donated organs according to patient rank on a regional waiting list (Dewar, 161).  After demonstrating this current allocation is ineffective and inefficient, I will evaluate some proposals that are currently on the table by using a cost versus benefit approach. 

            Many people feel that organs should be given to those who need them the most.  This sickest first policy may initially be beneficial because it is a fair method; however, it does not make much sense in the long run.  The case involving the baseball legend Mickey Mantle proves to be an excellent example.  On June 6, 1995, Mantle was diagnosed with end stage liver disease.  Yet, after he received the transplant, he died two months later.  In retrospect, the liver given to Mantle could have been used to save one of the 804 patients who died waiting for liver transplant that year (Sullum, 1).  In general, if transplantations are performed on very sick individuals, then people who have a higher likelihood of survival may not receive one.  Providing organ transplants to healthier patients will also lower the level of retransplantations, thereby freeing up more organs for others.

             Another allocation method is biological matching.  The actual match is measured by comparing the similarity of the antigen between the donor and patient.  This method is beneficial because it leads to an overall higher level of survival and less retransplantations.  However, this process is deemed bias when concerning certain groups, such as highly sensitized patients and minorities.  For instance, highly sensitized patients are much more likely to reject an organ transplant because of antibodies acquired from multiple blood transfusions or from rejecting a previous transplant.  Therefore, UNOS gives them preference when a kidney is found that will not necessarily be rejected; otherwise, they may never be transplanted.  Giving them preference is costly because it reduces the size of the waiting recipient pool searched.  Since highly sensitized patients make up less than 3 percent of all kidney patients awaiting transplants, discriminating for them is likely to cost more than if the group receiving preference were larger (Carlstrom and Rollow, 4).  Also, a matching system would further widen the disparity between blacks and whites.  For example, blacks already wait twice as long as whites for kidney transplants.  The quality of the biological match is usually better when donors and recipients are of the same race.  The fact that blacks as a group demand more kidneys than they supply largely explains the discrepancy between waiting times  (Carlstrom and Rollow, 4).  Using biological matching would have a racial impact, and in effect, place a higher value on the lives of some patients than others.

              Although these two prominent proposals, and some others that I will discuss in my thesis, have some positive aspects, they also have numerous shortcomings.  Therefore, I believe the best solution to increase the rate of organ donations is to create a market for organs so that property rights for organs could be sold.  Proposals for the use of market incentives can be classified into three types: sales by living donors, sales of future interests in organs and sales of organs from recently deceased people by the family of the deceased.

            Sales by living donors in no different than the sale of substances which are regenerated by the body, such as bone marrow, blood, sperm, hair, skin, and saliva.  Moreover, in most cases one kidney can be removed without serious risk to the donor.  Also, it is commonplace for people to assume substantial risks in return for compensation, such as coal miners and window washers who receive a compensating differential in exchange for their occupational hazards.  It is paternalistic and inefficient to prohibit this form of exchange (Spurr, 194).  As for the sales of future interests, there are two proposals to sell the right to obtain people’s organs upon death.  One, the federal government would currently purchase from individuals the right to future delivery of their organs.  Second, sellers would merely have the right to designate a beneficiary to receive payment in the event their organs are successfully harvested (Spurr, 195).  Finally, there could be a sale of organs from cadavers at the time of death. 

            In my view, there would be an enormous social benefit from a repeal of the current ban on the use of market incentives to augment the supply of organs.  The use of incentives to encourage the donation of both present and future interests in organs should be allowed.  Although the establishment of market incentives is not a foolproof method, it is better than any other proposal.  In my thesis, I will use established literature and data analysis to support this claim.