Saturday, June 16, 2007

Organ Futures

Why shouldn't people be able to sell their organs in advance, before they die? A company that procures organs could pay you today for the right to harvest your organs when you die. In exchange, say, for $200 or $1000 or whatever the market price determines, you would put your name in a database and carry an organ donor card with you so that when you die, all your usable body parts are harvested and sold to those who need the organs.

This would solve nearly instantaneously the organ shortage in this country. Economics tells us that shortages are caused by price controls. Well, in the case of organs, the legal price is zero. Unfetter the market and sufficient organs will be humanely supplied. The price mechanism will ensure that, with the price of organs rising to make supply and demand meet.

A market for human organs harvested after death would eliminate such gruesome practices as body parts being harvested from Chinese convicts, or living poor people selling their organs. (It should be legal for living people to sell kidneys and other organs; see this editorial arguing for same from the Ayn Rand Institute. However, a legalized market for advance sales of organs to be harvested after death would likely eliminate such a practice. It would be cheaper to buy organs in advance that are harvested from corpses than it would be to pay a living donor, who requires sophisticated medical care and compensation for pain. Living donors also cannot supply many specific organs such as hearts.)

Legalize advance organ sales and what is likely to emerge naturally is a market for organ futures. An organ future is the right to receive a specific donor’s organs after that person dies. Packages of organ futures could be sold in standardized blocks, and traded on exchanges like any other futures. After all, pork bellies, corn and oil are sold on futures markets. Why not markets for human kidney, lung and heart futures? Investors could buy packages of these securities.

The big benefit of organ futures is their liquidity. The existence of a futures market provides a ready pool of capital available to buy future organ rights from donors, and to sell them to harvesting companies. In turn, when the organs are ready for harvesting, after the donor dies, the harvesting companies would sell organs to recipients. Insurance companies would be active participants in this market, since they could sell organ insurance policies and then hedge them by buying futures.

The futures market benefits both parties to an organ donation, the donor who gets cash today while he is alive, and the organ recipient who would otherwise die if the organ futures market did not exist.

The time for legalized organ sales and an organ futures market is now, not the future. Thousands of people suffer excruciatingly while they wait for organs. Many of them die before they ever get them.

Speaking personally, if I could get paid cash today to carry an organ donation card in my wallet, I'd do it. Look in my wallet now, and there is no organ donation card. How many millions of other Americans like me would gladly sell the future right to their organs if only it were legal for them to do so? Legalize organ sales and an organ futures market will ensure that virtually no one will ever again die while waiting for a heart or kidney.

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How many people are suffering and dying due to the ban on organ sales?

  • Over 95,000 U.S. patients are currently waiting for an organ transplant; nearly 4,000 new patients are added to the waiting list each month.
  • In 2006, 3,916 kidney patients, 1,570 liver patients, 356 heart patients and 245 lung patients died while awaiting organs. Total deaths: 6,087.

Source: National Kidney Foundation

6 comments:

Dave Undis said...

An organ futures market would save thousands of lives a year -- if it was legal. Unfortunately, there's almost no reason whatsover to think it will become legal in the forseeable future.

Fortunately, there is an already-legal non-financial incentive that is quite similar to an organ futures market. Instead of getting money in exchange for the promise to donate your organs when you die, you can increase your chances of getting a transplant should you ever need one in exchange for the promise to donate.

This incentive is available from LifeSharers. LifeSharers is a non-profit network of organ donors who agree to offer their organs first to other organ donors when they die. If you join LifeSharers, you'll get preferred access to the organs of every other member. As the number of LifeSharers members increases, so do your chances of getting a transplant should you ever nned one.

Membership in LifeSharers is free at www.lifesharers.org or by calling 1-888-ORGAN88. There is no age limit, parents can enroll their minor children, and no one is excluded due to any pre-existing medical condition.

LifeSharers can't reduce the organ shortage as fast as a futures market could. But until financial incentives become legal, LifeSharers is the best alternative available.

Galileo Blogs said...

I disagree. Organ sales and most likely an organ futures market will certainly become legal in the foreseeable future. The fact that it is right means that eventually it will be permitted. All it takes is enough people to advocate it, beginning with the first person. It will never happen if no one advocates it.

As for LifeSharers, it is a great idea, and a good partial solution to the organ shortage under current law. I will consider becoming a member.

Anonymous said...

Welcome to the club! I have written a book and perhaps a dozen articles promoting an options market in transplant organs. The only difference between the proposal you blogged about and the one I propose is that under mine compensation would be far more significant, but only paid the estate or designee of the decedent. This has a number of advantages. First, many fewer actual exchanges of money. Second, no need to monitor the vendor to make sure he is carrying the card. Third, a much more direct, familiar, and easier method of poloicing the hospitals and doctors to ensure that they cooperate in the process; just as the howpital is liable if they negligently lose or destroy your Rolex watch, so too since the decedent's heirs will have a financial interest in the preservation and retrieval of the dedent's organs to the tuen of perhaps $30,000 they could and should be held liable for not cooperating in the process of transfer.

Lloyd Cohen
Professor of Law
George Mason University

Galileo Blogs said...

I am glad to join the club. Your research and argument are compelling. I would like to simply see organ sales legalized and let the market decide the form in which it will occur. It is entirely likely that the preferred form of the market will be the options market as you describe it.

Regardless of what form a market for human organs becomes, there is no doubt that simply by legalizing organ sales, the organ shortage will be solved. It is a damn shame that religion gets in the way of reality on this issue, as it does on all issues.

Thank you for being out there with your arguments for a civilized and humane way of resolving the completely unnecessary organ shortage.

If yours (and mine) arguments win the day, I trust that if I ever need an organ, I will be able to buy it, rather than languish and die hooked up to a dialysis machine or heart-lung machine as so many people do today.

Jennifer Snow said...

Having actually worked in a tissue bank, I'm afraid to inform you that this idea has a small element of pie-in-the-sky to it.

A lot of times organs just aren't procured (or "recovered", using the term "harvested" means you're not familiar with the field) because the donor is in no shape to donate when they die. The list of deferral conditions is *insane*. You got a tattoo in the past year? You can't donate. You were in jail for more than 72 hours? You can't donate.

Not to mention that the donor must still be on life-support when the organs are procured, which means that they have to die *in* the hospital. Also, getting the doctors and hospital staff to cooperate is not a problem. Most hospitals already have a department in place to handle exactly this sort of thing. Getting the *funeral homes* and staff to cooperate is a whole different kettle of fish.

Secondus, there is *no such thing* as a for-profit organ donation company in the U.S. From what I understand, each region has an assigned OPO (Organ Procurement Agency) that is usually not just a not-for-profit organization, but an actual government organization. If you go one step further from organs to tissue, there are only six tissue banks in the entire country.

Offering someone a thousand dollars to carry around a card, considering there's probably less than a 1/50 chance that their organs will actually be *usable* when they die, is pretty much out of the question . . . at least until there is a *complete* industry change.

As for paying $30,000 for an actually usable organ, this is also pretty much out of the question. The result of this will be to slap an additional $30,000 (or more) onto the price of the organ, placing it well out of the reach of most consumers. Were there to be an actual free market for organs, the price would probably drop down very rapidly to something like $2000 for a useable cadaveric organ. Why? Most of the expense of the organ is the investment of time, materials, staff, processing equipment, storage, transportation, testing, etc. etc. etc. that is all done by the OPO or their affiliates. At the tissue bank where I worked, we utilized only donated tissues and we barely broke even on a patellar ligament that cost the purchaser something like $2000, if not more depending on current supply/demand.

Really the only reason someone could expect to get tens thousands of dollars for an organ is the current restricted-supply issue. I expect that if a free market in organs or organ futures is ever established, it will equilibriate to a *much* lower rate.

Galileo Blogs said...

Jennifer,
My idea is as "pie-in-the-sky" as laissez faire capitalism is. The problem with the organ market today is that it is not a market; the market has been outlawed. There are no for-profit organ procurement businesses because it is illegal.

My argument in its simplest form is that the market for organs should simply be legalized. Then entrepreneurs will solve all of the problems you mention. Perhaps the particular form of the market will be organ futures, as I suggested, or organ options, as another commentator suggested, or a third way that is as yet unknown. Perhaps it will be a combination of all these ideas.

The whole point is to unleash the market and unleash the creative profit-seeking behavior of dedicated entrepreneurs to solving the problem of procuring organs safely, humanely and efficiently for all those who need them, and can pay for them. I have no doubt at all that if the legal prohibition against buying and selling organs were removed, such a market would emerge and work well.

As for what the eventual market price of organs might be, I hope you are right that the price would be very low. That would be good news for everyone. Certainly, competitive entrepreneurial activity would push down the price to the lowest possible level.

(As an aside, a true market in organs also requires the government completely stepping out of the way, and not imposing any regulations of any form on the industry. The market itself will develop its own standards of selecting the right donors, safely handling the organs, etc.)