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A Market Economy for Kidneys

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A Market Economy for Kidneys


A Market Economy for Kidneys

A Market Economy for Kidneys

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The number of patients waiting for kidney transplants has more than tripled while the number of donors has failed to keep pace. An increasing number of doctors are advocating the adoption of what economists would call market-based innovations — in other words, pay people for their kidneys.


Actually, a story that we first saw in The Wall Street Journal - speaking of Dow Jones - we're going to talk about that coming up here. When I first moved to Brooklyn and I would be walking up and down Flatbush Avenue, I couldn't help but notice that there were a whole bunch of these little offices that were offering something called nephrology service. And I thought this was maybe like a place where you get your stars read or something.


Organs, something with your…

BURBANK: Exactly.

STEWART: My mother's a biology teacher.

BURBANK: Ha, ha.

STEWART: Ha, ha.

BURBANK: That's what I found out. Nephrology clinics are actually places where people with failing kidneys can go in…

STEWART: Kidneys, right.

BURBANK: …and have their blood cleaned by a dialysis machine. But, I mean, there are, like, 20 of these places in a three-block stretch on Flatbush. And I was wondering why are there so many of these nephrology centers. Well, part of is because the list of people waiting for kidney transplants has gone up five-fold in the last 20 years.

Meanwhile, the number of available kidneys has only barely inched up. It's not keeping pace at all. And the shortfall has caused a new wave of physicians. And even economists to start thinking about, well, the sort of unthinkable, creating a system through which people could get paid for donating their kidneys. We don't even have to tell you that that is a controversial idea.

Julio Elias is an economics professor at the University of Buffalo. He's an advocate for creating such a system, and he joins us now. Hi, Julio.

Dr. JULIO ELIAS (Assistant Professor, Economics, University of Buffalo): Good morning, Luke. And good morning, Alison.

STEWART: Good morning.

BURBANK: Thanks for coming on. I'm - what is this sort of economic rationale for letting people sell their kidneys? Let's just get that out there first.

Dr. ELIAS: Okay. So I think that in this particular case - in most cases, I think, well, economics is a really powerful tool to analyze the problem in the market for organs. So the basic idea that we proposed with Gary Becker - I mean, in the analysis that we performed, so we show basically that without increasing the total cost of transplant surgery, without increasing it by a lot, you can basically eliminate the shortage, the current shortage. And this will be - happen using basically living donors.

BURBANK: And you say you wouldn't have to increase the budget because, as I read your plan and with the other people you've worked on this with, the idea would be that it's very expensive to keep someone on dialysis. And so that money could be better used to pay someone else to donate their kidney, so then the other person is not on dialysis anymore. So you don't need to add money to the system.

Dr. ELIAS: Exactly. In fact, according to some calculations, you will breakeven even if you pay $90,000. However, according to our calculations, so we estimate that the price for the live donors, let's say, with an average annual income of $35,000, so we divide the price in three components. So one is the compensation because of the risk of death, that is really long, in the case of a transplant - a kidney transplant surgery. Then we also have a component for governments, so you lose four days at work more or less. And also we have a compensation for the risk of losing quality of life.

BURBANK: Well, so you've got the economics worked out in terms of where the money would come from, but let's talk about the sort of ethical - implications that is. I mean, how could this not lead to people, who are poor, selling their organs because they need the money? I don't see Bill Gates doing this; I see somebody who, you know, needs the money real bad doing it.

Dr. ELIAS: Okay. It was - a very good point. What I - what we see, what I think - I will speak for myself. So what I think is that the pool of donors, potential donors will be composed by basically low-middle income and healthy poor people of - and, of course, low-middle income healthy people because you need to be in really good health in order to be able to donate an organ.

What is clear is that you may even improve basically the average health of the pool donor if you move into a market system because donors will be younger than they are today, because now, I don't know, we have expanded the donor criteria in order - because of this pressure that we have with such a large waiting list.

So clearly, the average health of the pool of donors - I think that will be much higher in the market system. And one, I think, one useful comparison is the voluntary Army. So if when the United States moves from a draft system towards a voluntary Army, most people saw that, well, mostly the poor will be enrolled in the Army and this is not the case, I think.

BURBANK: Well, there does actually seem to be certain evidence that, you know, the Army does tend to draw people from different backgrounds. You know, a lot of people don't come to the Army because it's their favorite thing, but because it's a way out of various situations.

Dr. ELIAS: Yes.

BURBANK: I don't know if that's the greatest comparison.

Dr. ELIAS: So you don't think that that's the greatest comparison?

BURBANK: Well, because I think that one of the criticisms of the Army - I mean, people have called it a poverty draft. I mean, is this a sort of the organ donation equivalent of that, potentially?

Dr. ELIAS: I think that - okay, so what I think is that, clearly, you - the donor's potential - donor's - and I think that this is similar with the Army, so they are going to be healthy people.

I want - and I think that - one thing that we have to keep in mind is that at the core of any market system, okay, or for any system - not just for donation, but in particular of a market system, will be the transplant surgeons, doctors, physicians that they will be still in charge of controlling - well, that people are psychologically prepared to donate and that they are healthy enough to donate.

So I think that the role of physicians in a microsystem will be key. So we don't have to forget about that. So people usually think that, well, if you move to a market system, the whole procedure will be taken from doctors. And that's not the case. In fact, I think that will rely more on doctors.

BURBANK: Well, you make some interesting points. And reading this, I mean, certainly there are some very good arguments on the side of what you're saying. I - you still have a pretty big, I think, ick factor among a lot of people. You know, it's a - I think there's a - you guys have a term for it, the repugnance indicator or something?

Dr. ELIAS: Right.

BURBANK: Basically, people aren't in to this. How are you going to win this PR battle?

Dr. ELIAS: Well, okay, so the last point that you made, I think that - so we are in the discussion of moral issues, of course, they are important. But I think that in the end, this is reduced to the discussion that I have - the debate that I have with others, from the other side. And the others will say, we just don't like it. So a market for organs is simply repugnant. (Unintelligible).

BURBANK: Right. It's not a very logical argument in your mind, I guess.

Dr. ELIAS: It's not an illogical argument; in some sense, it's acceptable. So you - well, (unintelligible) I don't know, it's a matter of preference. However, what I think is that we cannot assign a dollar value to that, to that state. So you don't like it, well, there could be some sort of compensation for you, if you don't like it, okay?

And the other thing is that if we see, well, this is a cause for society because we, as a society, do not accept - or part of the society do not accept this. But on the other hand, if we measure the benefits, well, I have serious doubts that the benefits can be lower than this repugnancy cost.

BURBANK: Spoken like a true economist.

(Soundbite of laughter)

BURBANK: Julio Elias, economics professor at the University of Buffalo, thank you very much for coming on THE BRYANT PARK PROJECT. We appreciate it.

Dr. ELIAS: Thank you very much for you having me on.

BURBANK: We're going to link to that Wall Street Journal story on our blog, so you might want to check that out. Look at some of the data. It's pretty interesting stuff.

STEWART: Coming up on THE BRYANT PARK PROJECT, you know what, Imus coming back to radio on December 3rd.

BURBANK: Called it.

STEWART: Going to come back to the TV - to RFD-TV, which, based out of national, does mostly rural televisions. You're wondering, what do they want to do with Imus? Apparently, they've had trouble convincing cable systems in the big cities to carry them. They think Imus - their ticket in. We talked to the founder and the president on THE BRYANT PARK PROJECT. We'll bring you a piece of that interview.


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