The Free Market
Waiting for Transplants
The Free Market 17, no. 4 (April 1999)
Former National Football League star Walter Payton has been stricken by a rare liver disease and needs a transplant in order to live. Unfortunately, the demand for available organs far outstrips the supply, and several thousand Americans this year will die waiting for those life-saving organs.
When Congress passed the National Organ Transplant Act of 1984, authored by then Sen. Al Gore of Tennessee, it was supposed to solve the chronic and deadly shortages. Like many other acts of Congress, this one has failed to solve the problem, and has actually made things worse. Gore's law makes it illegal for individuals to sell organs, whether they come from live donors or from people who have just died. Donor organs are to be made available by altruism, although that standard applies only to potential donors and their families. Legal altruism does not apply to doctors, procurement agencies and hospitals, and, predictably, they defend their turf.
The desperate search of some needing transplants has become big news. For example, NBC recently publicized a system in China in which individuals from the United States and elsewhere pay $30,000 or more for an organ transplant. The coverage, as expected, was decidedly negative. What the journalists and others fail to point out, however, is that the current system makes the Chinese option, as ghoulish as it may seem, more attractive to people whose only other alternative is a slow, painful death.
Economists unanimously agree that whenever authorities force lower-than-market prices upon a good or service, shortages and long lines develop. People at the back of the line often seek illegal or questionable alternatives. In the case of transplantable organs, that "official" price is zero, and the lines are miles long. Defenders of the system say that the zero price enables poor people to afford transplants, and that donated organs are of highest quality.
Those explanations are not only wrong, but are really a smokescreen that hides the fact that the current system mainly benefits existing players in the structure. Economists point out that the zero cost of organs does not mean that transplant recipients get a price break. Indeed, both procurement organizations and doctors and hospitals are now able to capture all the value of that organ in the prices they charge for their services. A market for organs would not increase the price of a transplant, and evidence exists that suggests a legal market would reduce the final price of the whole procedure. Some estimates suggest that organs would cost less than $1,000 on a free market.
One reason that prohibition of organ markets is widely supported by the medical profession is that the ban preserves the incomes of those already in this business. For example, the shortage of available organs limits the number of doctors and hospitals which can do transplants, severely curtailing competition. Supporters of the "altruistic" system claim ending prohibition would resemble a bad used car lot. The poor, they say, would be "forced" into selling their organs for peanuts to unscrupulous vendors preying upon human misery and price the poor out of transplants. (Likewise, bakers "prey" upon those who are hungry.) These arguments are ridiculous and dishonest. As noted earlier, economists say markets for cadaveric organs would result in low prices for the organs as more needed body parts come available. People waiting in line could now receive transplants.
Moreover, organs are not bought by themselves; they are useful only as part of the transplant surgery, which is performed by a trained surgeon. In other words, the organ is valuable insofar as it permits the transplant surgery to take place. In the present system, procurement agencies, while technically being "reimbursed" for "procurement costs," are rewarded handsomely per organ. In 1997, for example, acquisition costs for hearts and lungs averaged $16,314; $32,845 for kidneys; and $10,312 for livers. These costs are then factored into the total price for transplant surgery.
Increased availability of donor organs would attract more doctors into transplants. As the supply of transplant physicians increased, the price per transplant would fall, lowering the incomes of doctors who are already established in this field. Thus, what might be good for those needing transplants might not be in the best financial interest of some physicians. Walter Payton won't die waiting for a liver transplant. Those who benefit from the current system know the death of a superstar waiting in line would expose the regime's brutality. Like the late baseball star Mickey Mantle, who allegedly was jumped ahead of many others waiting in line to quickly receive a liver, the principals of the procurement system will almost certainly find the needed organ for Mr. Payton. He will be lucky.
Thousands of other desperately ill people who live outside the media spotlight will succumb to this system's bogus altruism.
Andy Barnett is professor of economics at Auburn University where William Anderson is a PhD candidate and Mises Fellow.
Cite This Article
Anderson, William L., and Andy Barnett. "Waiting for Transplants." The Free Market 17, no. 4 (April 1999).