12/5/02

Bob Lowry, 334/844-9999

COMMENTARY: PAYING ORGAN DONORS -- WHERE DO WE GO FROM HERE?

For many years, the medical community in general and organ procurement, allocation, and transplant groups in particular strongly opposed the use of any payments to organ donors -- either cadaveric or living -- to encourage increased organ collection rates. The principal source of that opposition was alleged ethical concerns. It was argued that offering money to potential organ donors or their surviving family members would somehow violate widespread perceptions of human dignity and contribute to an ethically unacceptable "commodification" of the human body. In response to these sorts of arguments, payments to organ donors were legally proscribed by the 1984 National Organ Transplant Act. That Act makes it a felony to buy or sell human organs for purposes of transplantation. The legal price of organs, then, was effectively set at zero by this legislation.

Predictably, this zero-price (or so-called altruistic) policy has resulted in a severe and chronic shortage of cadaveric human organs available for transplantation. Today, the official waiting list of potential transplant recipients stands at approximately 85,000. And, due to the organ shortage, less than half of these patients are expected to live to receive the needed transplants. Presently, more than 16 people die each day while waiting for a suitable donor organ to become available. And the death toll is continuing to mount as the organ shortage worsens each year.

This increasingly untenable situation has recently led the medical and transplant communities to rethink the legal ban on organ donor payments. Earlier this year, both the American Medical Association and the Board of Directors of the United Network for Organ Sharing passed resolutions condoning trials in which potential cadaveric organ donors -- generally, the families of recently deceased accident or stroke victims -- would be offered some sort of financial incentive to consent to removal of their loved oneıs organs. The specific incentives offered could vary according to the donor familyıs preferences -- e.g., funeral expenses, donations to charities, or direct monetary payments. The purpose of these trials is to gauge empirically the effectiveness of positive prices in eliciting increased rates of organ procurement.

Assuming that such trials come to fruition and that they demonstrate that positive prices are, in fact, capable of resolving or, at least, ameliorating the organ shortage, an important question then arises: If donor payments are to be allowed, then what sort of institutional arrangement should be put in place to administer organ procurements in that new, positive-price environment?

Two broad policy options are apparent. First, we could maintain the current system of government franchised, non-profit organ procurement organizations. Or, second, we could allow the free entry of for-profit firms into the organ procurement business, thereby permitting competitive organ markets to form. Importantly, the performance achieved under these alternative institutional structures is likely to differ markedly. Consider each option.

Under the first approach (which appears to be the approach presently favored by the medical community), the current system would remain in place. The only change would be that organ procurement personnel would be authorized to offer families of potential organ donors a financial incentive (positive price) to help solicit their agreement to donate. All other important characteristics of the current system, however, would remain intact. Specifically, three important characteristics would define that system: (1) organ prices would be set administratively; (2) organ procurement firms would remain non-profit organizations; and (3) these firms would maintain monopoly status within their franchised geographic regions. The underlying presumption behind this approach, then, is that the sole cause of the organ shortage is the absence of any financial incentive for families to donate. The procurement organizations themselves bear no responsibility for the failure to achieve higher collection rates.

Under the second approach, for-profit organ procurement firms would compete with one another in an open market. It appears likely that these companies would bid against each other for the right to solicit organ donations at each hospital. Hospitals, in turn, would likely receive findersı fees for notifying these companies of potential organ donors. Receiving such notification, the procurement firm would then approach the family and offer some sort of remuneration (tailored to the familyıs preferences) to encourage their agreement to donate. Prices paid to donors would then be determined by market forces; and both the carrot of profits and the stick of competition would drive these procurement companies to devise efficient and effective methods of solicitation. Moreover, the prices would be free to fluctuate to equilibrate supply and demand and, thereby, eliminate any shortages or surpluses, just as they do in other markets. The acquired organs, then, would be sold to organ transplant centers which would then pass the costs of organ acquisition on to third party payors, just as they currently do.

Economically, it is apparent that the second approach -- a market-based system of organ procurement -- is likely to yield far superior performance. Once we have agreed (as most now have) that there is nothing inherently unethical about paying positive prices to organ donors, there remain no apparent grounds on which to base opposition to organ markets. The policy choice of what sort of institutional arrangement to put in place to organize organ procurement then becomes a practical, economic one -- which organizational structure is likely to function better. The overriding objective driving this policy choice should be to select the option that offers the best hope for eliminating the shortage, because that is the policy that will save the most lives. Economic considerations clearly favor organ markets on these grounds.

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(Kaserman is the Torchmark Professor of Economics at Auburn University. He is the principal co-author of The U.S. Organ Procurement System: A Prescription for Reform.)

dec02:AU-organs