Organ Transplant Shortage

Why is there a shortage of organs available for transplant? The answer is very simple. There is a shortage because the public sector controls the market so as to produce a wholesale price of zero. For those who hate markets, the big bugaboo is that they think that only the rich will be able to afford organs if there is a functioning market for organs. There are two answers for this critique. First, if there are a great many more organs available, the equilibrium price might be quite affordable. Second, there is the issue of what constitutes “rich;” it could be that the market would provide credits for donors that could be given to organ recipients. Thus, the new “rich” in this context might be those whose family, or church, or union, or some other association has made donations to the clearinghouse. We need a palpable incentive to get well people to donate organs as well as to get them to sign donation cards that would permit harvesting of their organs in the event of a fatal accident or illness. The incentive could be transferable credits that could be sold, given away, or inherited.

One has to realize that the wholesale price must be well below the retail price of organs. This requirement exists because those who harvest the organs, categorize them, and ship them, must be compensated for their work and for the facilities in which they work. Also, those who do the transplantation must similarly be compensated. Nevertheless, if there were vastly more organs available and transplanted, scale economies would drive down these costs.

With an abundance of organs for transplant, the entire business changes. First, organs would not be allocated to only the very, very sick. This would improve the chances of success tremendously. Second, the larger number of transplants would improve the skills of the transplant teams also improving the chances of success. Third, we may learn more quickly about avoiding rejection without taking drugs with huge side effects . . . drugs that suppress the immune system.