The Microeconomics Behind America’s Organ Trade

The United States of America is said to be the land of equal opportunity for all its citizens, but if people are dying while waiting for an organ donor that might not ever show up, how can we expect them to benefit from that promise? There is a shortage in organ donors across America, and this could be due to the fact that it is illegal to accept payment for any organs given. According to Kristin Houser in her article Black Market Bodies, 4,761 Americans died in 2014 while waiting for a kidney donor, and 3,668 had to be taken off the list because they became too sick to go through with the procedure. With no guarantee that one will receive a donor, and the high demand for the donors currently provided, many people resort to relying on the black market for their transplant. This can lead to unsafe practices that could, unfortunately, put the recipient in a worse position than they were in before.

Currently, there is a shortage in the supply of organs to people awaiting a transplant, especially kidneys. This shows that the demand for human organs exceeds what is being supplied and further implies that people are dying from waiting too long to receive them, or from not receiving them at all. If the United States eventually allowed payment in exchange for kidney donations by introducing a free market economy, this would most likely not be the case. As we have learned, consumers respond to both positive and negative incentives. In this case, we are providing a positive incentive by allowing donors to inherit a monetary reward for their donation. Due to the incentive being provided, supply will then begin to increase and eventually reach market equilibrium, as shown in Figure 1.

With deregulation in the market for organ donation, the associations that handle the selling and transplant processes would benefit more than patients physically receiving the organs. Businesses would profit because there would be an increase in organ supply to meet the preexisting demands, but the consumers would be at a disadvantage since there would be no set price standards, or even as much of a guarantee for health standards. The current market is not economically efficient; that is, the current method or system of allocation when it comes to the organ donation market is not operating at its maximum potential. If the market was economically efficient, there would not be such a large amount of people dying from not receiving organs in time. However, even if there was an allocation process that allowed the economy under our circumstances to become efficient, there is still the issue of equity. What is the equity of our current market? According to a study by economists William Barnett II, Michael Saliba, and Deborah Walker in The Independent Review, by disallowing donors to receive payment for their kidneys (or other organs), we are furthering our market from a place of equity, or fairness. The study explains that equity is not being achieved largely because by taking away the ability to receive monetary compensation for a donation, the opportunity for the poor to earn money that could be spent on bettering their well-being is taken away. However, after deregulation took effect, there would be more economic efficiency because there would most likely be an increase in supply which would then allocate more to a greater amount of people. The issue of equity would also be improved because the vast majority of people, if not all, would be able to benefit from their donation, and, referencing back to the aforementioned article, the poor would have another option for income if they so choose.

Israel has implemented a policy called the "no give, no take" policy, which places those who are willing to donate an organ at the top of the list if they were to ever need one, and those who are not willing at the bottom. Here, it is legal to accept payment for your donation. This policy is another example of utilizing an incentive to encourage people to become a donor. However, instead of being a positive, monetary incentive, this would be a negative incentive because most people would not want to be at the bottom of the list. One of the biggest limitations to this according to Dimitri Linde in his article Israel, A Leader in Transplant Tourism, Finds a Formula for Increasing Domestic Donations, are the religious factors that made it difficult to convince people to donate. Linde writes that many observant Jews do not believe in any sort of mutilation to a body after death, which would sully their chances of being at the top of the list and could be seen as discriminatory. In my opinion, I think this policy handles equity well. It is in the hands of the donor and/or potential consumer to choose whether they are willing to donate and be at the top of the list, or not. It is also more efficient to utilize this system because more people will want to donate if there is an incentive in play, thus, the supply will increase to help minimize the shortage and reach an equilibrium point. Another policy is routine removal, which is the legal practice of removing tissue or organs not long after a patient is declared deceased. There is a large debate regarding this policy on whether it is ethical, and morally sound. In my opinion, this policy is lacking in equity because in some places around the U.S., legally, it is not necessary to get consent from the individual's families before conducting the surgery, if they did not follow specific opt-out rules beforehand. In regard to efficiency, the policy is efficient, but at a cost. By salvaging organs after someone has died, we are ensuring that all resources are being utilized and not wasted. With a market that has such a profound shortage, it is understandable why measures such as this would be taken. However, if there is a better policy that did not question certain morals of the public, shouldn't that be preferred?

If our focus is specifically on kidneys, we can introduce a policy that increases the amount of donors by changing the way the donor options are listed. Since kidneys are statistically proven to be the most needed and demanded organ for transplant, there should be a separate option when agreeing to be a donor for just kidney donation. This will encourage more people to become kidney donors that would originally be hesitant to become an absolute organ donor due to how severe it may come across to those who are unfamiliar with the processes. However, this may not be enough. While those who were skeptical about organ donation as a whole may be accounted for now, it is also significant to think about those who have no interest in being a donor at all. For this demographic, we must propose an incentive. I believe it would motivate a large majority to become a kidney donor if that donation promised health care benefits. The level to which those benefits apply would be based on whether the donor was just a kidney donor, or a complete organ donor. Now, in a discussion of equity, it would make sense to offer a higher level of benefits to those who are complete organ donors since that encompasses kidney donation as well. However, the kidney donors are still receiving more of a benefit than they were before, so it still is classified as an incentive that puts them in a better situation. As a whole, this new policy will encourage citizens who were disinclined to become donors to now consider the option. As a result, we expect to see an increase in kidney (and organs as a whole) supply which will further the market to reaching a place of equilibrium and help save the lives of many recipients. Society would be better off from this because more people would get a second chance at life, and if all goes well, black market activity will reduce until it is unable to function. The reduction and eventual deconstruction of the black market will help ensure safer procedures and that all prices and conditions are fair and work for everyone.

I recommend the U.S. adopts the "no give, no take" policy that was showcased by Israel. I think this incentivizes people to become donors without the additional problem of finding efficient ways to disperse a monetary or insurance-related incentive. This policy also has equity and efficiency that is suitable and reasonable for what the U.S. is trying to achieve, as mentioned earlier in this document. Referencing back to Dimitri Linde's article, the United Kingdom is currently thinking about adopting this proposal for their nation, which would be beneficial considering this policy boosted Israel's organ donor consent rate from 45% to 56%. By offering the incentive of being at the top of the list, the supply of donors will begin to increase and should, over time, reach equilibrium with the pre-existing demand. To reiterate, equilibrium will take time to achieve, much like for any policy, but the imminent effects are likely to ensure a supply greater than what there is currently.

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