Tuesday, February 19, 2008

Tuesday Column: We are short of kidneys. So why not buy them?

What kind of society would routinely bury or burn its most valuable resources rather than use them?

I am talking about our own body parts. The Nobel Prize winning economist Gary Becker reckons that each still-usable kidney we bury is worth $US15,000; each still-usable liver: $US35,000.

Don’t doubt that there are people prepared to pay that much money. Right now more than 1,800 Australians are waiting for kidneys, livers and so on - hooking themselves up to equipment each night and gradually getting sicker while waiting for that phone call that may never arrive.

Some of them live in Canberra.

One in every five will die before the phone call comes.

To an economist, it’s a straightforward problem of matching supply to demand.

Big promotional events such as the current National Organ Donation Awareness Week notwithstanding, the supply of usable kidneys, livers and corneas is actually falling - in the main because fewer or us are dying in road accidents.

Meanwhile the number of people whose lives (or sight) could be saved continues to climb...

Non-economists put forward non-economic means of boosting the supply to match demand. On this page today a former ACT Health Minister Gary Humphries comes out in favour of “presumed consent” – changing the legal assumption that says if a dead person didn’t explicitly decide to donate, their organs can’t be used to one that says unless they explicitly forbad donation, their organs are available for recycling.

For reasons that haven’t been made clear the Commonwealth Health Minister and her Parliamentary Secretary have ruled out changing the presumption of consent, as has an expert committee whose report they are yet to release.

In Britain by contrast the new Prime Minister Gordon Brown is pushing ahead with the idea.

It may be that our leaders are worried about upsetting the families of accident victims. It may be that they care more about them than they do about the lives of the people their inaction could be condemning to death. If so, it sits poorly with our Prime Minister's claim that his decisions will be “evidence-based”.

For economists, presumed consent is just one of a number of good ideas for boosting supply to match demand. Most of them involve money.

One argument against presumed consent is that is that it isn’t real consent. Andrew Oswald of the University of Warwick wants to use money to make it real.

He has suggested that each year’s UK income tax form include a box that taxpayers can tick to unequivocally grant the authorities the right to harvest their organs after they die. In return they would get a small tax deduction. Oswald guesses that as little as 10 UK pounds or $A20 would do the trick. Most of us are surprisingly amenable to small bribes.

In Australia such a scheme would cost less than $200 million, chickenfeed compared to the billions the government spends annually on a Private Health Insurance Rebate that as far as anyone knows doesn't save a single life.

It would save the government money as well. It wouldn't need to buy all those dialysis machines. The net cost to Wayne Swan's budget could be close to zero.

If you want to keep money out of it economists can help there as well. Alexander Tabarrok of George Mason University sees the whole thing as a trade: I agree to give you something after I die if needed in return for you agreeing to give me something after you die. But he says if there’s no trade there should be no deal.

His slogan would be “no give, no take”. Spare parts would be available only to people who had signed up some years before to donate their own. A less severe rule would move people who had previously signed up as donors to the top of the queue. It would motivate me.

And then there’s live trade. Most of us have two kidneys. We only need one. If I sell one I don't need to someone who has none in return for money, both of us have been made better off, probably a lot better off. Economists call this a gain from trade.

It is true that I would be taking a risk in order to earn the money. But people take risks in return for money all the time, construction workers on building sites and coal miners among them. Most of the time we don't seem to mind.

In any event the risk of dying from such an operation is small - apparently about the same as the risk of dying during cosmetic surgery.

Doctors are naturally resistant to the idea of removing kidneys from healthy people. Their oath requires them to do no harm. But they are already taking kidneys from healthy brothers, sisters, wives and husbands who donate their organs out of love.

All that the Nobel Prize winning economist Gary Becker proposes that that they also do it for people who sell their organs for money.

If you find the idea abhorrent you are in good company at the moment. But our idea of what is abhorrent changes over time. Once it was widely regarded as abhorrent to lend money for interest. Life insurance (where I make a bet that my loved one will die early) was similarly regarded as beyond tasteful.

The US Economist Virginia Postrel argues that by restricting living donations to friends and family (and sometimes helicopter pilots like Kerry Packer's) we are discriminating against people who don’t have friends or family.

She means it. Two years ago she donated one of her kidneys to an acquaintance because she knew no-one else would. She says it would have felt better had money changed hands.

She has an answer too for people who say that the poor would be the most likely to lose their organs in a legal trade in living kidneys, creating a one-way traffic in body parts to the rich.

She says we could give anyone who donated a living kidney a one-year tax holiday. That's not worth much to a poor person but it's worth an awful lot to a rich one. “Suddenly all of the founders of Google would be lining up” she says.

They are ideas worth taking seriously. What's happening now is an appalling needless tragedy.

While writing this article I logged on to www.australiansdonate.org.au and typed in my Medicare number. I'd signed up as a donor in 45 seconds.


Gary Becker,
Should the Purchase and Sale of Organs for Transplant Surgery be Permitted? The Becker-Posner Blog, January 01, 2006

Gary Becker and Julio Jorge ElĂ­as,
Introducing Incentives in the Market for Live and Cadaveric Organ Donations, The Journal of Economic Perspectives, Volume 21, Number 3, Summer 2007 , pp. 3-24(22)

Stephen Dubner and Steven Levitt,
Flesh Trade, New York Times, July 9, 2006

Alexander Tabarrok,
A Moral Solution to the Organ Shortage, The Independent Institute, February 19, 2001

Alexander Tabarrok,
How to Get Real About Organs, Econ Journal Watch, Volume 1, Number 1, April 2004, pp 11-18

Virginia Postrel,
"Unfair" Kidney Donations, Forbes Magazine, May 6, 2006

Virginia Postrel,
The surgery was simple; the process is another story, USA Today, October 25, 2006

Sally Satel,
Death's Waiting List, New York Times, May 15, 2006

Sally Satel,
A living donor let me live on, USA Today, October 25, 2006

Alvin E. Roth,
Repugnance as a Constraint on Markets, Journal of Economic Perspectives Volume 21, Number 3—Summer 2007—Pages 37–58

Tim Harford,
Repugnant Markets, BBC Radio, July 12, 2007

Ian Walker,
The greatest gift, Background Briefing, ABC Radio National, 17 September 2006

Catherine Waldby,
The logistics of altruism, Australian Review of Public Affairs, June, 2007