There is an old legal adage that “hard cases make bad law.” They often result in bad economics, too.
That is evident in a recent case of a 10-year-old girl with a lung disease who would be greatly helped by a lung transplant. Under the rules for lung transplant waiting lists, she would have a high priority. But these rules apply only to patients over 12. So the result is litigation brought by her parents.
The hard cases-bad law adage usually applies to cases in which the application of a clearly written law results in some individual being treated unfairly. This often results in additional legislation trying to cover all possible exceptions to the general rule.
In the case of the 10-year-old patient, however, we can turn the adage on its head: “Bad laws make for hard cases.”
The bad law is the National Organ Transplant Act of 1984. And the underlying problem, that of too few donors relative to those needing organs, stems, at least in part, from that. Additional legislation is unlikely.
Most everyone, economists and non-economists alike, would agree that deciding who does or doesn’t get a lung, heart or liver and thus who lives or dies, is one of the hardest resource- allocation questions in society. A majority feel that the usual willingness-to-pay market processes that we use to allocate onions or televisions should not apply to human kidneys or hearts for transplant. The result was the National Organ Transplant Act.
Sponsored in the House by then-Rep. Al Gore, a Democrat, and in the Senate by Orrin Hatch, a Republican, the act had broad support from both parties. It not only outlawed buying or selling human organs, but banned any contractual commitment to donate an organ, even without compensation. It also established national organizations to organize and facilitate allocation of deceased donor organs.
Most economists probably would agree with strict regulation of transfers of organs, although not necessarily with the complete bans on payments or on contracts contained in the legislation. Several conditions, including equal knowledge and bargaining power, need to be in place for an unregulated free market to result in a societal optimum, and in many cases this isn’t true for organ transfers. Moreover, many would agree that there are moral questions involved that supersede issues of economic efficiency.
There are some, including some libertarians and several transplant physicians, who argue that the net effects of the law are negative and that it should be repealed.
The problem is straight from Econ 101: At a lower price, the quantity of goods that people are willing to supply is less than at a higher price. If the government mandates that the price must be zero, leaving altruism as the sole motivation for donations between unrelated parties, the quantity supplied will be less than the quantity desired.
And that is how things continue, year after year. Every year, tens of thousands of people die whose lives might be extended for many years if sufficient organs were available for everyone who needed one. We spend billions on maintenance therapies, such as kidney dialysis, that would not be necessary given greater donations. And myriad people have a lower quality of life than they need have.
One is thousands of times more likely to die for lack of an available replacement organ than from terrorism violence or a lightning strike. Yet we really don’t devote many resources to increasing donation levels. There are scattered public service announcements, exhortations on driver’s license renewal forms and solicitations by medical personnel to survivors of prime donors who suffered traumatic death.
Society would be much better off if we could increase levels of organ donations, which are still minuscule relative to potential. The core of economics is that people respond to incentives, and if you want to increase donations, increasing incentives could play a key role. The problem is doing so in ways consistent with societal values about consent and respectful treatment of the dead.
Some states, including Minnesota, allow the deduction of donation expenses incurred by living donors, usually up to a maximum of $10,000. This applies only to living donors as for kidney transplants, and has no incentive to increase availability of organs such as hearts, that can only come from the deceased.
A few states have experimented with authorizing the payment of modest sums to the families of deceased individuals. These have to be framed as “grants” or “gratuities” to help defray funeral expenses to avoid violating the 1984 ban on payments.
The public is often seen as ambiguous. Polls that ask if “buying and selling human organs” should be allowed consistently find large majorities say no. But ask if “organ donors should be given compensation” and majorities consistently say yes. But those results are not necessarily inconsistent. There are many ways one could increase donations, including some “compensation for donors,” without having “buying and selling” of organs.
One non-monetary measure suggested by advocates is a “nudge” strategy to deal with economic inefficiencies that result from incomplete information. Many employees pass up “free money” in the form of employer 401(k) matches. If you change the default from employees having to fill out a form to begin to contribute and qualify for the match to one of having to fill out a form to not contribute, plan participation goes up markedly.
Advocates argue the same would apply to organ donation. Instead of requiring you to actively check a box on a license form to become a donor, the default could be that you are presumed a donor unless you check a box indicating not. But for many, this measure still violates true informed consent.
Another possibility is a small annual payment, say $100, for being a donor. This could be revoked at any time, subject to repayment of any “unearned” amount. Small amounts are seen as overcoming human inertia without posing great temptation for the desperate. Yet even small amounts might result in significant increases in donations, particularly by people under 30.
There are many more proposals, too many to deal with here. This obviously is an issue that is fraught with moral considerations. But it also is an area where we clearly have a worse outcome for society than we might have. Improving things should be a higher priority.