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Economics Behind Blood Donation

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liege posted on Fri, Jan 23 2009 11:43 AM

Blood donation is a big deal at the company I work for. Some of the people I work with get really involved in planning committees and what not. Mainly I think this is because its a way to get out of doing actual work. But I digress. They do anger me though when I get grilled on why I don't want to freely give my blood away. Somehow, arguments like 'Why don't they just pay me for it?' come off as childish or greedy (in their eyes, not mine). That used to get to me, but now, I'm thinking differently.

Blood is one of the most important substances that my body makes on a regular basis. It takes time and resources to produce and its absolutely essential for my survival. Without it, I die, and without the proper time and inputs, it doesn't get made.

So why on earth should I freely give away my blood? If there's such a high demand for it, then how come there isn't a market for buying and selling it? There's markets for other necessities: food, clothing, shelter, gasoline, medicine. If we took it to an extreme, we could easily say that farmers should donate their produce, clothing companies their clothes, construction companies their nice new houses, etc.

Between people and blood banks, there is no traditional market, at least not in the sense that value is exchanged for value on a rational basis. The basis relied upon is some sense of civic, or even human duty, goodwilll, etc. And I'll bet dollars to dimes that blood banks don't donate their collected blood to hospitals out of the same sense of "duty to humanity". I know for a fact that hospitals don't donate it to patients either. If I remember right, a pint goes for a couple hundred dollars.  Additionally, employers offer tiny perks for the service. In the military, we used to get the day off. At this company, we get a cute little pin to where. I'd prefer getting compensated for the blood my body has to do double duty to make up for.

Anyone know why a normal "blood market" doesn't exist. With all the fuss made over the scarcity of it, you would think someone would have said to hell with the good will, lets make some money off of it.

BTW, this is my first post.

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I thought people could make some money donating blood back in the day.

liege:
BTW, this is my first post.

Welcome.  Strong entrance.

If you find something evil that wobbles, push it. - Gary North

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Zlatko replied on Fri, Jan 23 2009 12:11 PM

Searching for "get paid for blood donation" at google, gave me this:

Q: Why are some blood donors paid while others are not?
A:
In the U.S., blood and blood components used for transfusion to patients must be donated by volunteer, unpaid donors. This is one way in which blood collectors can assure a safe blood supply. Paid blood donors can only donate plasma, and this plasma is then used by pharmaceutical companies to make drugs. This plasma goes through a great deal of processing to insure its safety. Blood for transfusion does not go through the same processing.

Source

There you have it. It's illegal.

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liege replied on Fri, Jan 23 2009 12:52 PM

This argument seems like a non-sequitur. My statements are directed to the site and not to Zlatko.

In the U.S., blood and blood components used for transfusion to patients must be donated by volunteer, unpaid donors. This is one way in which blood collectors can assure a safe blood supply.

One conclusion that can be drawn: 'only people who are willing to volunteer their time and vitality have clean blood'. Another conclusion could be: 'People who want money for their blood have tainted blood.'

I doubt that the first conclusion is even entertained in the industry. All volunteers go through a lengthy screening process.

This plasma goes through a great deal of processing to insure its safety. Blood for transfusion does not go through the same processing.

So process it to ensure its safety. But seriously, are the visitors to that site supposed to believe that blood is not processed, screened, etc. and that the entire basis for the guarantee of its safety rests solely on the fact that a volunteer donated is (as opposed to a seller selling it)?

To be honest, volunteer blood donations sounds like a great racket. Consider the formula: convince millions of people that selling a scarce resource that they produce is unsafe and/or selfish, and that donating it freely is safe and a civic duty. Then, sell it for profit to hospitals.

Zlatko:
There you have it. It's illegal.

It may be, but I am not aware of any laws like this.

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I am a repeat blood donor. I have never been given straight dollar in hand, but there other incentives. I've gotten half off on hockey games, gas cards, free tickets to carnivals, free lunch or dinners at local restaurants. I've saved hundreds on leisure activities thanks to giving blood. Ive made good with the free mason whom usually run the drives.

I have A negative blood, so they constantly bother me. They always tell me there is a shortage, blah blah. I believe it goes to a good cause and I want to pass my dad in the 2 gallon club.

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I used to donate blood all the time.  I was aware of the fact that it was a valuable resource, but I was willing to give it away because I thought I could help someone in need.  There's nothing wrong with voluntary charity, after all.

Still, I wouldn't be surprised if the sale of whole blood were, in fact, illegal. The sale of body parts in general is, after all.  Which is ridiculous.  I have always thought the constant blood shortages could be alleviated if they would pay for blood as they do plasma - of which I'm now a regular donor. 

At the plasma "donation" place they say the compensate you for your "time," incidentally.  This is clearly false - you get paid based on your weight class and get the same amount regardless of how long it takes.  I guess actually coming out and saying they are buying bodily fluid would be taboo. 

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liege replied on Fri, Jan 23 2009 2:02 PM

Twilight:
I guess actually coming out and saying they are buying bodily fluid would be taboo.

Now that I think of it, this might actually be hitting the nail on the head. Any laws governing the sale of blood (or body parts), might be reflective of societal norms, i.e., that its bad, or gross, etc. From this perspective, it makes sense. It does, however, become a double standard when a patient gets charged at a hospital for transfusions (and not in time, but by the pint).

Then again, making the entire chain, from donation to transfusion, free would probably be disastrous. With no indicators on the relative scarcity of blood, allocation of it wouldn't be rational or efficient.

My thinking is that if an end-consumer is paying an intermediary for a scarce resource, the original producers should also get paid. I also think that a free market of blood would lead to safer, larger, and more efficiently collected yields with quicker delivery time to those in need. But I guess I'm just preaching to the choir here. Smile

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ama gi replied on Fri, Jan 23 2009 2:09 PM

liege:
To be honest, volunteer blood donations sounds like a great racket. Consider the formula: convince millions of people that selling a scarce resource that they produce is unsafe and/or selfish, and that donating it freely is safe and a civic duty. Then, sell it for profit to hospitals.

Exactly.

"As long as there are sovereign nations possessing great power, war is inevitable."

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liege:

They do anger me though when I get grilled on why I don't want to freely give my blood away.

Just tell them that you've been to Europe for a while and you are not allowed to give blood! Dang, people should just mind their own business.

Sometimes "majority" simply means that all the fools are on the same side

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I'd love to see the topic of donated blood and organs explored more fully. I'm actually surprised it hasn't been done (perhaps my Google-fu is just weak).

My guess is that if blood were sold, the price would be so low, due to poor people donating a lot, that it would be less 'profitable' for the Red Cross and similar organizations than the current model of getting people to donate blood, money, or both. Blood isn't really that scarce of a resource, but by having people donate it instead of selling it, they've created an artificial scarcity which raises their profits.

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May be if you consider this thought experiment, it might help straighten out your thoughts? Say you are the lone person walking on a street late into the night. As you walk you came across this man grabbing his chest, clearly suffering a heart attack. If you don't make a call and get him an ambulance, he will die. Now, would you demand this guy to pay you for calling for an ambulance, before you make the call? If he has no money on him will you walk on without doing anything? Now substitute the cost of making this phonecall (call charges, the nuisance of making a call, etc) for your blood. For many people on matters related to life and death, they are willing to overlook the monetary value of things.
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cherrydarkchocolate:
May be if you consider this thought experiment, it might help straighten out your thoughts? Say you are the lone person walking on a street late into the night. As you walk you came across this man grabbing his chest, clearly suffering a heart attack. If you don't make a call and get him an ambulance, he will die. Now, would you demand this guy to pay you for calling for an ambulance, before you make the call? If he has no money on him will you walk on without doing anything? Now substitute the cost of making this phonecall (call charges, the nuisance of making a call, etc) for your blood. For many people on matters related to life and death, they are willing to overlook the monetary value of things.

Agreed, and this is why I and many others donate blood.  However, it seems clear that this mechanism doesn't work well enough - after all, we're constantly told about critical blood shortages.  If there were a market for blood, and there were enough donors to meet the demand, then the price would be 0.  If not, the price would rise - which would not prevent people who wish to do so from donating their blood.  But isn't it odd to see an enforced price of $0, and constantly to be told about a shortage?  Isn't there an obvious way to get rid of this shortage?

By the way, it isn't exactly the same.  While the need is the same, it is less immediate.  In the heart attack case, it's right in front of you.  While rationally there is no difference, there is an emotional difference.  People will make that phone call, but may not make the plan (it usually takes several hours) and keep up with it in the case of blood when the need is not staring them in the face.

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There are some studies that show by paying people you practically turn them away from donating blood.

http://gupea.ub.gu.se/dspace/bitstream/2077/2741/3/gunwpe0180corr.pdf

But you might not believe in intrinsic motivation etc...

There is a constant shortage of blood because blood don't keep fresh forever.  A regular supply of blood is vital red cells last only 35 days and platelets only five days.  If nobody donates any blood for 5 days - then that's it.  And you need to have blood products on hand because people who need blood transfusion usually didn't plan it.  So part of the shortage is driven by logistic.

There are also considerations with regards to diseases.  There is moral hazard / self selection problem.  By offering to pay for blood, you attract people who are motivated to give blood for money.  What kind of people give blood for money, you might ask?  Could it be people who have nothing else to give?  You also need an honourable type of person to give blood - e.g. detection of HIV viruses is not 100% (at least not until 90 days after a person has contracted it), they take a sample (a few ml) of blood to test for diseases etc., but what about the other 500-odd ml of blood that are actually used for transfusion?  You need blood givers who aren't willing to lie for the money offered.  By providing no money you provide no incentives to lie about risky sexual behaviour / drug taking.

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I don't give blood either.  I feel similar to the way you do, and I also hate needles.

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cherrydarkchocolate:
May be if you consider this thought experiment, it might help straighten out your thoughts? Say you are the lone person walking on a street late into the night. As you walk you came across this man grabbing his chest, clearly suffering a heart attack. If you don't make a call and get him an ambulance, he will die. Now, would you demand this guy to pay you for calling for an ambulance, before you make the call? If he has no money on him will you walk on without doing anything? Now substitute the cost of making this phonecall (call charges, the nuisance of making a call, etc) for your blood. For many people on matters related to life and death, they are willing to overlook the monetary value of things.

lets try a more relevant thought experiment. Everything starts the same, lone person walking, heart attack in front of your eyes.

"I have a rare diease," he gasps. "I can only live if you let me chew up and eat your little finger. Dont worry, its so cold out here you wont feel a thing."

here's another one:

"I have a rare disease." he gasps. " I can only live if you let me eat up five hundred dollars I notice you have in your wallet."

"Will you repay me some day?'

"No. But I will repay someone else for your five hundred dollars. Don't worry I'm not getting anything for free here."

or putting it all together;

"I can only live if I chew up your little finger, then pay someone else unrelated to you five hundred dollars beacuse I ate your finger."

"Will I get any of that money? After all. it's my finger we are talking about."

"You get nothing, you vampire."

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