Gently-used Kidney for Sale (would like it to go to a good home)

Kidney_Transplant

There is a significant kidney shortage in the United States.  About 100,000 people in the United States are on a waiting list for a kidney,1 but only 17,000 kidney transplants will take place.2  The consequences of this shortage are lethal; close to 4,761 people died in 2014 because a kidney was not available.3

Economists say the shortage exists because the market for kidneys is not being allowed to clear.4  Since 1984, it has been illegal to sell a kidney (or any human organ) in the U.S.5  People can sell blood, sperm, and eggs but not organs.  The government has restricted the price for a kidney to zero, and at this price the demand for kidneys far exceeds the supply.

Government actions distorting markets

Economists argue that the solution is straightforward:  allow people to sell their kidneys in a free market and the shortage will disappear.6  There is evidence beyond economic theory to support this.  In 1988, Iran began allowing people to be paid for donating a kidney and “eliminated the entire backlog of kidney transplant patients, something no other nation has achieved.”7  It makes sense; allowing people to receive money for their kidneys will encourage more people to donate.  If people don’t believe the market price is attractive enough, they can choose not to donate, which will in turn prompt those in need of a kidney to offer more money until an equilibrium is reached.

There’s just one problem. 

People find the idea of selling kidneys to be morally repugnant.8

Kermit the Frog selling kidney
Anti-commodificationists believe that some things should not be bought and sold.9  In some situations, a market sale corrupts the nature of the thing being sold (someone who must be paid to be your friend is not really your friend) or is coercive (someone who is poor and doesn’t want to sell their kidney, but feels they have no other choice).10  The most dramatic form of the coercive aspect is the prospect of involuntary donation – the fear that you will wake up in a room next to an ice chest with stitches across your abdomen.  While such reports may be exaggerated by the media, China has been involuntarily extracting kidneys from its prisoners for years.11  With respect to the corruption argument, it is feared that making kidneys available for sale would reduce the number of altruistic donations.12  There are also concerns that people of low socioeconomic status would be inadequately informed of the risks of donating a kidney, although research suggests that kidney donors are similar to non-donors in terms of life span, health, and quality of life.13
Say again?

Thus, it would appear that society is faced with two equally unappealing choices:  repeal the National Organ Transplant Act of 1984 and pave the way for kidneys to be sold on Amazon, or continue to let people die to avoid coercing or corrupting others.  But researchers have recently identified a third alternative.

Create a kidney Co-operative.

According to the authors of the study,14  Here’s how the kidney co-operative would work: the co-operative purchases kidneys from donors, and patients in need of a kidney apply to receive a kidney from the cooperative.  In terms of who gets priority to receive the kidneys, the pecking order is as follows:

1.  People who previously donated a kidney to the co-operative

2.  People who pay a fee to the co-operative (“contributing patients”)

3.  People who do not pay a fee to the co-operative (“non-contributing patients”)

If you’re thinking that this sounds a lot like a market for kidneys, hang on just a second.  There are two important characteristics of the kidney co-operative that distinguish it from a market.15  First, the goal of the kidney co-operative is not to make a profit.  Second, the fee paid by the contributing patients is higher than the amount of money that the kidney donors receive for their kidneys.

Rich People Laughing

Let me give you an example to show how this works.  You decide to start a kidney co-operative called Kidneys R’ Us by purchasing kidneys for $5,000/each from living donors.  When Wealthy William finds out he needs a kidney, he requests one from Kidneys R’ Us.  You approve his application, but here’s the catch:  Wealthy William has to pay $10,000 for the kidney.  Think of the extra $5,000 paid by Wealthy William as an excise tax that will allow a second person who cannot afford the fee to also receive a kidney.  Wealthy William is getting the kidney he needs but is also subsidizing the purchase of a kidney for someone of lesser financial means. 

This design blatantly violates the Law of One Price, which says that goods (in this case, a kidney) should be available for the same price in two separate markets.  In other words, it seems unintuitive we could reach an equilibrium when donors are receiving $5,000 for their kidneys which are then re-priced at $10,000.  But the researchers theoretical model suggests that, “an efficient kidney co-operative can never perform worse – in terms of the number of transplants – than the market mechanism.”16

Homer Spare Kidney

The kidney co-operative has never been tested in a real setting, so there may be difficulties implementing the system.  One readily apparent issue is determining who has to pay the fee.  Is it based on income?  If so, what about a wealthy person who has no income the past year because he or she has not been working and is on dialysis waiting for a kidney?  Middle and upper-class folks have a number of financial advisors to show how to shift assets and/or income to qualify for Medicaid, financial aid for their children’s college education, etc.  Why would the kidney co-operative be any different, particularly if the price of a kidney is high?

Rich People Laughing

Setting the price too high for kidneys might simply encourage more people to travel to other countries to obtain a kidney.  Such “transplant tourists” already exist and are another effect of increased globalization.17  Americans hit hard by the cheap foreign labor might one day curse cheap foreign kidneys. 

In spite of these obstacles, the idea of a kidney co-operative should be taken seriously.  Many lives will be lost if we continue to accept the status quo.

The Rock in 80's outfit

1. Eames, K. C., Holder, P., & Zambrano, E. (2017). Solving the kidney shortage via the creation of kidney co-operatives. Journal of Health Economics, 54, 91-97.

2. Miller, R. L., Benjamin, D. K., & North, D. C. (2016). The economics of public issues (19th ed.). Pearson.

3. Eames, K. C., Holder, P., & Zambrano, E. (2017). Solving the kidney shortage via the creation of kidney co-operatives. Journal of Health Economics, 54, 91-97.

4. Becker, G. S., & Elias, J. J. (2007). Introducing incentives in the market for live and cadaveric organ donations. Journal of Economic Perspectives, 21(3), 3-24.

5. 42 U.S. Code § 274e – Prohibition of organ purchases. https://www.law.cornell.edu/uscode/text/42/274e

6. Becker, G. S., & Elias, J. J. (2007). Introducing incentives in the market for live and cadaveric organ donations. Journal of Economic Perspectives, 21(3), 3-24.

7. Miller, R. L., Benjamin, D. K., & North, D. C. (2016). The economics of public issues (19th ed.). Pearson.

8. Leider, S., & Roth, A. E. (2010). Kidneys for sale: Who disapproves and why? American Journal of Transplantation, 10, 1221-1227.

9. Ertman, M. M., & Williams, J. C. (2005). Rethinking commodification: Cases and readings in law and culture. New York, NY: New York University Press.

10. Sandel, M. J. (2012). What money can’t buy: The moral limits of markets. New York, NY: Farrar, Straus, and Giroux.

11. Griffiths, J. (2016, June 23). Report: China still harvesting organs from prisoners at a massive scale. Retrieved from: http://www.cnn.com/2016/06/23/asia/china-organ-harvesting/index.html

12. Miller, R. L., Benjamin, D. K., & North, D. C. (2016). The economics of public issues (19th ed.). Pearson.

13. Ibraham, H. N., Foley, R., Tan, L., Rogers, T., Bailey, R. F., Guo, H., Gross, C. R., & Matas, A. J. (2009). Long-term consequences of kidney donation. New England Journal of Medicine, 360, 459-469.

14. Eames, K. C., Holder, P., & Zambrano, E. (2017). Solving the kidney shortage via the creation of kidney co-operatives. Journal of Health Economics, 54, 91-97.

15. All of the details regarding the kidney co-operative are from the Eames, Holder, and Zambrano research study referenced in footnote 14.

16. Ibid.

17. Miller, R. L., Benjamin, D. K., & North, D. C. (2016). The economics of public issues (19th ed.). Pearson.

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