Transcript Using Incentives to Increase Kidney Donation

Alex Tabarrok
Department of Economics
George Mason University
The Growing Shortage
1989-2009
100000
80000
60000
40000
20000
1990
1995
2000
Year
WaitingList
Source: United Network for Organ Sharing.
Waiting list and transplants for all transplant organs.
2005
Transplants
2010
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Millions of people suffer from kidney disease
and the numbers are increasing rapidly but in
2007 there were just 64,606 kidney-transplant
operations in the entire world.
Due to the shortage many countries are now
experimenting with innovative incentive
systems designed to increase the supply of
organs.

The National Organ Transplant Act (NOTA) of 1984
states:
“It shall be unlawful for any person to knowingly
acquire, receive, or otherwise transfer any human
organ for valuable consideration for use in human
transplantation...”
In other words, incentives for organ donors are
illegal. But incentives could increase the supply of
organs and save lives.
 Let’s look at the problems and paradoxes of NOTA.
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About one-third of potential living
donors are incompatible with their
intended recipient.
Kidney exchanges (trade) make everyone
better off.
Kidney exchanges encourage donation
with incentives: Donors give a kidney so
that their loved one gets a kidney.


A kidney is clearly “valuable consideration” so
kidney exchanges could be illegal under NOTA.
The Norwood Act (2007) amended NOTA so it
would not apply to kidney exchanges.
Kidney exchanges are important but
limited because barter is much harder
than monetary exchange.
Picture from UCLA Kidney Exchange.
www.transplants.ucla.edu/KidneyExchange
NOTA prohibits the receipt of valuable
consideration for any organ for human
transplantation but it’s not illegal to compensate
organ donors when the organs are used for other
reasons.
 Absurd situation: Whole body donation for
medical and scientific uses is often
compensated—typically a free cremation.
 As a result, there is a surplus of whole bodies
used for scientific research and a shortage of
organs needed to save lives.
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Following the whole body donation model consider the following:
Dear Ms. Jones, as you may know, it is our standard policy to offer a gift
of $5,000 to the estate of the deceased, as a way of saying "Thank you
for giving the gift of life." The money can be used to help offset funeral
or hospital expenses, to donate to your loved one’s favorite charity, or
simply to remain with the estate, to be used in any manner the heirs see
fit. No price can be placed upon the many lives that can be saved by your
gift. The gift for the gift of life is merely a token of our deep and sincere
appreciation for your generosity at this most difficult time.

Support for financial compensation is growing. All of the following
are now in favor of testing the idea of financial compensation for
cadaveric donation.
▪ The American Medical Association
▪ The American Society of Transplant Surgeons
▪ The United Network for Organ Sharing (UNOS)

In 2010 Israel legalized payments to donor families to
"memorialize" the deceased.
 Funds for memorials may be as high as 50,000 shekel, or $13,400.
 The money is paid by a nonprofit group and may be used in any way
the families see fit to memorialize the deceased.

In the ceremony to present the first check under this program the
director of the charity making the memorial payment, said:
 "In this country we always talk about military heroism. ... [T]his is
clearly a case of civilian heroism. [His organs] saved four lives. ... [T]he
family should be blessed.“

In 1994 the Pennsylvania legislature established a trust fund to
reimburse donor families up to $3000 for funeral expenses but the
plan was never implemented because of fear that it violated NOTA.
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Organs today are treated like a commons – anyone
can receive any organ whether or not they were
willing to contribute to the commons, i.e. be an
organ donor.
Consider a no-give, no-take policy for organs.
People who have signed their organ donor card are
given priority if they should one day need an organ.
Advantages of no-give, no take.
A. Satisfies most people’s moral intuitions.
B. Can be implemented easily be adding points to
current system. (Similarly to program already in place
for live organ donors.)
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In Singapore anyone may opt out of its presumed consent
system but those who opt out are assigned a lower priority
on the transplant waiting list.
In Israel in the case of kidneys two points on an 18 point
scale are given if the candidate had three or more years
previous to being listed signed their organ card.
LifeSharers.org is an “organ club.” Anyone can join.
Members agree that if their organs should become available
they will go first to a fellow LifeSharers member.
Important. No-give, no-take systems are widely seen as
ethical but their primary virtue is to increase the incentive
to donate!

About 40% of all kidney transplants are from
live donors.

Nobel prize winner Gary Becker and Julio Elias
(2007) combine estimates of the value of life
(willingness to take risks for monetary
compensation) and the small risk of donating
a kidney to calculate that:
 A payment in the range of $15,000 would
double the number of live transplants and
eliminate the shortage.
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Kidney chains begin with a donor who does not receive a kidney (to a
loved one) in return. If the original donor gives to someone who has a
willing but incompatible live donor a chain can be created.
Financial compensation could potentially be used to begin many more
kidney chains.
Picture from People Magazine, Nov. 30, 2009

Iran is the only country in the world regularly paying
compensation for live donors.
 In a new program, Singapore allows payments for lost
income, medical costs and lifetime insurance coverage.
First payment was Nov. 2009.
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The Iranian system began in 1988 and eliminated the
shortage of kidneys by 1999.
 Iran is the only country in the world without a shortage of
kidneys.
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The Iranian system is managed by a nonprofit,
volunteer-run patient association.
 Payments from government and charity are ~$3,500-
$6,000.
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Compensating donors does not necessitate any
change in how organs are allocated.
We can compensate donors but continue to
allocate organs according to the UNOS point
system.
Compensation need not be upfront but could
come in the form of an annuity, tuition voucher
or contribution to a retirement plan.
 In the latter case compensation should be a higher

amount.
Compensation should also include a substantial
non-monetary recognition for the gift of life.

Dialysis is expensive and most of the cost is paid by the
Federal government through the End Stage Renal Disease
(ESRD) program which serves over 500 thousand patients and
has expenditures of $24 billion a year (2007).
Medicare Cost of Dialysis Versus Transplant
Per-year cost for dialysis: $72,064.
Cost of transplant (year one): $106,373.
Per-year cost of transplant after year one: $24,572.
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Transplants pay for themselves within 2 years and are
considerably cheaper than dialysis over prospective lifetimes.
Matas and Schnitzler (2004) calculate that on a discounted
basis each transplant saves $120,000 compared to dialysis
(2010 dollars).
A transplant saves $120,000.
 What would it take to increase
cadaveric donation from 8000 to
12,000 a year? $2500, $5,000,
$10,000? Assume, $10,000.
 What would it take to increase live
donation from 6,000 per year to
12,000? Assume, $15,000.
 Thus increased organ donation
could easily save the Federal
government billions of dollars. On
a pure cost-benefit analysis paying
donors pays for itself!

More importantly transplants
increase life-expectancy and
quality of life.
At $10,000 per cadaveric
donation the cost of
financial compensation for
12,000 organs would be
$120 million and savings
would be $480 million.
Net savings of $360 million
per year.
At $15,000 per live donation
the cost of financial
compensation for 12,000
organs would be $180
million and savings would
be $720 million.
Net savings of $540 million
per year.
Is it wrong to pay people to take
on risk?
 Compensation is widely accepted
as a payment for risk.
 The annual fatality risk from being
a commercial fisherman in Alaska
is 4 to 5 times higher than the
one-time risk of donating a
kidney.
 We honor people who risk their
lives in the Armed Forces but we
do not expect them to do so
without compensation.
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We call people who give an organ away, heroes. So
why is it repugnant to sell an organ?
 Attitudes about what is repugnant change.
 Adam Smith (1776) noted that in his time:
“There are some very agreeable and beautiful
talents of which the possession commands a
certain sort of admiration; but of which the
exercise for the sake of gain is considered,
whether from reason or prejudice, as a sort of
public prostitution.”
 Examples: acting, opera singing and dancing.
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The worldwide shortage of organs will get
worse before it gets better.
The shortage is increasing the number of
countries that are experimenting with
incentives.
Lifting the ban on compensating organ donors
would greatly increase the supply of organs
saving many thousands of lives.
Alex Tabarrok
Department of Economics
George Mason University
Deaths and Exits on the Organ Transplant Waiting List
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
0
2,000 4,000 6,000 8,000
1995-2009
Died while Waiting
Source: United Network for Organ Sharing
Too Sick to Transplant
Living and Deceased Organ Donors
1988-2009
Kidneys
from
Deceased
Donors
10000
Deceased
Donors
8000
6000
Living
Donors
4000
19
8
19 8
8
19 9
9
19 0
9
19 1
9
19 2
9
19 3
9
19 4
9
19 5
9
19 6
9
19 7
98
19
9
20 9
0
20 0
0
20 1
0
20 2
0
20 3
0
20 4
0
20 5
0
20 6
0
20 7
08
20
09
2000
Year
Source: UNOS.
Note: Deceased and living are the number of donors of each type. Deceased organ donors
typically donate more than one organ.
The Kidney Shortage Grows Larger
The Shortage of Kidneys for Transplant
30000
The shortage measured as yearly flow, 1995-2009
Price
Supply
25000
Demand
20000
The Shortage
15000
11,623 (2009)
10000
Supply
1995
2000
2005
Shortage=11,623 (2009)
2010
Year
Source: United Network for Organ Sharing
Demand is measured as transplants + additions to waiting list + died on list + too sick too transplant.
Supply is measured as yearly transplants
16,828
Demand
28,451
Quantity