Excellent news; yesterday the Ninth U.S. Circuit Court of Appeals issued a unanimous opinion stating that compensation for bone marrow donation, specifically peripheral blood stem cell apheresis, is legal because such donation does not fall under the National Organ Transplant Act (NOTA).
The case was simple and it’s outrageous that the government fought. In brief, a bone marrow donation used to require inserting a very big needle into the donor’s hip bone, a painful hospital-procedure often requiring general anesthesia. Today, however, donors typically do not donate marrow but hematopoietic stem cells which can be harvested directly from blood in a procedure that takes a little longer but is essentially similar to a standard blood donation. Compensation for blood is legal (blood is excluded as an organ under NOTA). The plaintiffs, led by the Institute for Justice, argued and the court agreed that there is no rational basis for outlawing one type of blood donation when a similar donation is legal.
I was shocked by the utter boneheadedness of one of the government’s arguments:
…the government argues that because it is much harder to find a match for patients who need bone marrow transplants than for patients who need blood transfusions, exploitative market forces could be triggered if bone marrow could be bought.
In other words, markets are forbidden just when they are most useful. It was in fact the patients with rare matches who brought this case. As the court noted:
…a physician and medical school professor…says that at least one out of five of his patients dies because no matching bone marrow donor can be found, and many others have complications when scarcity of matching donors compels him to use imperfectly matched donors. One plaintiff is a parent of mixed race children, for whom sufficiently matched donors are especially scarce, because mixed race persons typically have the rarest marrow cell types.
The patients with the most common cell types can afford to rely on the kindness of strangers. You don’t need a lot of kindness when there are a lot of strangers. The patients who are most difficult to match need to leverage altruism with incentive. It’s a lesson with many applications.
This will be an interesting experiment. Perhaps you could post the number of voluntary donations, and later tell us the supply elasticity for finding rare matches and whether intermediaries (doctors, harvesters) pass on or mark up the costs, and what the allocation is between a wealthy person getting a marrow transplant, and a poor person.
Will Medicaid ultimately pay for this.
Everything is an experiment.
I’ve always felt it was wrong to deny a donor or the donor’s estate compensation for organ donations when the doctors and hospitals are charging tens to hundreds of thousands per procedure to transplant the organ – and the organ is the most valuable part of the whole process.
Hi Jessica, Do you have a link or reference about those hospital charges? Do you know how much hospitals charge for blood? Thanks!
Hi,
I know that i’ve paid 2430$ for a simple joint disorder and finally i was treated with an ointment for 46$, so it’s pretty easy to imagine how much costs liver transplantation for example, just doctor’s work, hospital services etc.
I was asking for an exact reference. Nevermind, Andrew provided a link below.
They don’t charge for the blood they charge for putting it in you, instead. But economically its the same thing.
Maybe this is the marginal revenue product of a deceased executive?
http://www.chfpatients.com/tx/transplant.htm
Transplant expense
Organ Cost Range Average Cost
Heart $50,000 – $287,000 $148,000
Kidney $25,000 – $130,000 $51,000
Liver $66,000 – $367,000 $235,000
Pancreas $51,000 – $135,000 $70,000
Heart/Lung $135,000 – $250,000 $210,000
Any other questions?
Interestingly, if you consider kidney transplants and allowed compensation, the total cost of the procedure would go down over time.
Andrew’..the numbers you gave are for removing donated organs. What would be the all in price for organs if organs were marketed. Are you saying below that the price for harvesting would decline because the cost of paying for something that is now “free” would decline?
Scale.
And it’s not “free” of course. Rents.
Thanks!
Andrew is correct, we could actually save money and lives by compensating organ donors. The way we would save money is that currently the Federal government pays for dialysis and an organ transplant is cheaper than dialysis over the lifetime of the patient. Not to mention being better for the patient. Thus, if compensation caused even a modest increase in supply you can save money. See my piece
http://www.econlib.org/library/Columns/y2009/Tabarroklifesaving.html
for a few references.
@alex
Are there any other historical precedents where a for-compensation transaction went from illegal to legal? I’m curious how the price time series responded to the legislation change; is there a significant spike in prices (yes, up from zero)? How about transaction volumes?
I have a relative that spent months on dialysis on the kidney waiting list. That is damage being done to their body. Even if I’m wrong that prices would come down if the market expanded, If I could have just spent $50,000 plus the cost of a kidney, that would have been a no-brainer.
And this was when motorcycles were really popular.
Keep in mind too that U.S. transplants are MUCH higher than anywhere else in the world, even in the OECD. Last I checked, we were at twice the OECD average.
In other countries, it’s much more likely that you just die.
TallDave, as usual, is quite correct. Overall, looking at both live and cadaveric donation the US does very well. See the figure at the bottom of this post.
http://marginalrevolution.com/marginalrevolution/2010/05/presumed-consent.html
Teacher’s pet.
This is the most damaging thing I have heard of in a long time. I am
a health care provider who has worked in Pediatric Hematology/Oncology and Nephrology. I think this causes less incentive for people to become members of the National Bone Marrow Registry because they think they can receive an incentive elsewhere or at the time they are “called” as a donor. I
understand the train of thought of buying kindness and fair trade, but I think ethics are part of these “transactions”. Ethically shoud we charge our neighbors and fellow countrymen (and women) for something that I might have that can save a life?
Any organ recipient has to rely on the kindness of their insurance carrier to cover the cost of everything. But, insurance never covers everything. There are medication copays, doctor’s visit copays, inpatient stay copays, loss of work wages or possibly losing their job. These people could not afford to pay to incentivize a donor to donate their organs post-mortem or bone marrow. Many people go bancrupt from the medical bills trying to save their own lives. How they afford to pay the donor for their life saving organ or
marrow?
Paitients await the kindness of (dead) strangers whose family
members are usually the ones who are giving the organs out of the
kindness of their loss. A standard kidney transplant costs between
$69,000-$141,000. These costs include the entire hospital stay
including the transplant and 3 months of follow-up treatment on an
outpatient basis. This cost is a significant decrease over the cost of Dialysis which costs Medicare (because all End Stage Renal Disease patients qualify for Medicare) $65,000/year for Dialysis vs. $24,000/year for a renal transplant.
I think your concerns are exaggerated. Altruistic donors can always refuse the compensation. In any case, this (i.e. whether more or less people will become donors) is entirely an empirical issue. Thanks to this landmark decision we will finally be able to get an answer.
Blood donation compensation is already legal and it hasn’t really caused prices to skyrocket. Don’t people get paid for semen and eggs too?
The crucial distinction between blood / semen / marrow etc. versus actual organs is that the donor does not (mostly) put himself in a worse position (contra. kidneys etc.). So the exploitative / trafficking potential is lesser.
Actually, in many countries it is illegal to pay for semen or eggs (which merely creates a gray market or incites medical tourism).
For instance, Canada bans payment (but allows reimbursement of expenses). The ban was not a legacy; rather it was actually introduced in 2004. The UK apparently caps expenses for egg donation at £250. And so forth.
>rely on the kindness of their insurance carrier
ROFL!
By your logic, doctors should not be compensated for their work
Or farmers.
One point, the incentive need not be terribly large to have an effect. A couple hundred dollars when combined with a “You will be saving a life speech.” will almost definitely work better then the speech itself when talking to a greeving relative. I know it sounds crass but when you suggest cutting up someones wife they think “gross, no way.” But, they are also thinking about the funeral expenses.
What you’re basically saying is “it’s better to not get a transplant because there are none available than it is to not get a transplant because you can’t afford it.”
And of course there is no law saying that the donor must always demand the highest price possible. Plenty of people will still donate out of the goodness of their hearts.
“Ethically shoud we charge our neighbors and fellow countrymen (and women) for something that I might have that can save a life?”
Taken to the logical extreme, doctors should be required to work for free. But I don’t think anyone thinks that’s a good idea.
Ann,
With all due respect, we already knew that’s what you think.
Any organ recipient has to rely on the kindness of their insurance carrier to cover the cost of everything
It’s usually called a contract.
These costs include the entire hospital stay including the transplant and 3 months of follow-up treatment on an outpatient basis. This cost is a significant decrease over the cost of Dialysis
You’ve just explained why allowing compensation is better — the costs are large enough that it won’t make a lot of difference to the recipient, and the greater number of organs provided will reduce overall costs.
Consider food. Food is something everyone needs to live. It is possible to get food either by paying for it, or by having it donated to you. But since the collapse of Communism, virtually no one argues anymore that food should not be bought and sold because some people can’t afford it — we now know that leads to massive shortages.
Getting a kidney taken out of you is major surgery that will affect you for life. Getting stem cells harvested takes a week of self-injections followed by blood donation. Not very similar.
on the other hand, stem cell transplant procedures cost quite a bit more (think $250k) than receiving a kidney transplant.
And even better, when you create a market, incentives to create cheaper substitutes (artificial or regrown organs) will often produce near-miraculous improvements.
How so? The laws never prohibited a company from selling non-human marrow substitutes. Human marrow sales will be a separate market. Right?
Some commentators (Peter Schaeffer, where are you?!) might further claim that cheap human marrow sources hinder the development of high-tech substitutes.
Why would you buy a substitute for a product that is legally required to have a price of zero?
Because of price of zero is effectively a price of infinity if there isn’t sufficient demand to meet supply.
Shit, got supply/demand backwards
I think it would be better to have researchers develop artificial organs that are cheaper than market rates for human organs, rather than just cheaper than infinity.
Well they’re also competing against each other, assuming there’s more than one research team.
OTOH, they also compete against a product that is free, albeit in constant shortage.
So their market would tend to be limited to the cases where the cost of waiting for a free organ is greater than the cost of buying the substitute now. And because, iirc, the medical boards that decide who gets what use a formula that takes into account the health of the recipient, they would be limited to the segment of the market with the worst value proposition.
Except in the case of very rare matches, the organ is probably not more valuable than the doctor who is able to transplant it. That is not a skill you just pick up at the community college.
In a few years I could be a fine surgeon working mostly on my own primarily picking out positive externalities out of the educational and apprenticeship dung heap. On the other hand, in 2 decades concentrating hard and working non-stop we might have a tissue engineered kidney, but probably not. Basically, the only thing that works so far is joint replacements.
>yesterday the Ninth U.S. Circuit Court of Appeals…
Not to burst your bubble, but you do realize that this is the most overturned court in the US, right?
I doubt it will be appealed or that the Supreme Court would take cert since there is no circuit split as far as I know.
ditto
I’ve a legal question: If the government was vindictive they can always go back and amend NOTA laws to make bone apheresis explicitly illegal, right? Do governments have to take a judicial rebuff lying down or can / do they go the legislative route? The motivation mustn’t be lacking if prosecutors decided to take this court to case anyways.
Maybe, but it would be subject to additional legal challenges. The also argue that there’s no “rational basis” (a constitutional term of art) to treat blood donations and this specific type of marrow donations differently. In other words, saying “you can pay for blood, but not marrow cells extracted from blood” is such an arbitrary and nonsensical distinction that it doesn’t pass constitutional muster. Reading the tea leaves, I would think the court had at least some sympathy for this argument, although they didn’t have to reach it because the case was resolved on statutory grounds.
That being said, it’s a lot easier said than done to get anything passed in Congress these days, and I can’t imagine there are people willing to expend a lot of political capital to make sure that safe, simple, life-saving bone marrow donations remain tightly restricted.
And don’t assume that because “prosecutors” defended the case, there’s any actual Congressional interest in amending the statute — two completely separate groups. Gov’t attorneys are generally required to defend all statutes against any constitutional attacks, whether they agree with them or not. Otherwise if Congress passes a law the Attorney General disagrees with, the AG could conspire to not defend the law in court, leading to it getting thrown out.
Walter Williams once said that a national monument wasn’t really owned by all Americans because he couldn’t sell his piece.
So much for owning your own body.
The assumption being that paying donors with money will result in an increase in the number of donors. I am unconvinced that this will be the case, at least for plausible quantities of money. Right now, donors are paid in self-esteem; they get to enhance their self-image as being the sort of person who volunteers to help others, who does the right thing because it is right and not because it is financially rewarding. This is something lots of people place real value on. And it is diminished by the knowledge that other people are being paid mere cash for providing the same service.
This is, I suspect, particularly important at the level of screening for potential donors. Once you have identified someone who can with high probability save the life of a specific patient in an afternoon, there’s probably not much trouble either way. But for initial screening, I suspect you are going to have to chose between the set of people willing to take an hour out of their day for the slight chance that it might save someone’s life, or the set of people willing to stand in line with a crowd of skid-row regulars for a couple hours in order to collect a quick $50 and/or a de facto lottery ticket.
I don’t think you can get both, and it isn’t clear which is larger. Note, for example, the distinction between volunteer whole-blood donors and paid plasma donors. Which model better serves the bone marrow market?
Getting paid doesn’t mean you didn’t save a life.
Getting paid nothing for doing medical research isn’t making me feel good.
Note that they discuss a $3,000 scholarship or donation to a charity of your choice, which would seem to reinforce rather than diminish the “self esteem”/ego-boost.
That would only apply when an identified donor is being asked to provide marrow to an identified patient, which I do not think is the problem. Are there, in fact, people in the registry who are being identified as potential donors and who, upon being told that they and only they can save some innocent stranger’s life with perhaps a day’s work, are responding “How much do I get paid – nothing? Then bugger off!”
I do not believe this is the problem, and would welcome hard information to the contrary. Mostly, people like that don’t join marrow-donor registries in the first place. If paying people is going to make a difference, we have to pay people to join the registry in the first place. And we presumably won’t be doing that with $3000 scholarships.
Possibly we will be doing it with a “lottery ticket” whose payoff is the right to endow a $3K scholarship; that probably wouldn’t hurt but I doubt it will help much either. Rather like the little freebies the Red Cross gives to blood donors. More substantial or more explicitly financial payoffs, substitute an economic incentive for a moral one.
And yes, it is a substitution. The percieved virtue of performing a civic duty or altruistic act is in fact diminished by seeing other people doing the same thing in the same context on an explicitly mercenary basis.
Pitting of a moral incentive versus an economic one.
Reminds me of that study about daycare centers in Israel. Parents started showing up much later when the center started imposing a penalty on latecomers.
I am curious. We have a market of donated free marrow owned, say by a University, and a market of purchased bone marrow.
What should the University charge for it’s supply of bone marrow? Should resellers of free bone marrow be required to resell at no charge other than harvesting or storing and if so how do you monitor or control when there could be rent seeking?
No one bit on answering this question.
So, the likely answer is that the University would pocket the money and thank you for your contribution.
How dare the gov’t allow some people to profit on something people need in the process of creating better outcomes for all!
Well, at least we’ve figured this out for food.
In other words, paying an ‘exploitative’ market price is worse than death. Thank you for protecting me, government.
I guess this is simply semantics.
If one is compensated, it’s a sale not a gift/donation.
The regime can prohibit the market from setting prices. That works so well in allocating limited supplies among relatively larger demands.
Re marrow donation, I don’t think the principal difficulty lies in getting an identified matching donor to donate. The hard part is to have enough donors on the database to generate a match.
The present incentive is likely going to kick in very late in the donation-chain for it to make most impact. What really needs an incentive is to make people give the initial buccal swab to be registered in the database.
What’s the perceived risk of selling body parts? That it might be unfair to those who can’t afford them? If anything, it would get more donors identified and increase the survival chances of everyone. Insurers should welcome it because keeping someone on dialysis for 10 years has got to be more expensive than coughing up a few grand for a kidney. But I’d like to see body parts grown in a lab. There’s already been tremendous progress in this area, and if you can do this with someone’s own cells, rejection is not an issue.
Could I consider my bone marrow as a piece of art when I donate it.
Do I get a tax deduction since if I sell it I get income.
According to subsection A13, paragraph 4 of the Almagamted Federal Bodily Taxation Code the IRS gets an arm and a leg.
TallDave,
Since you know about the law, I am planning to take a vacation this spring in some third world countries and was looking for a way to finance it.
Do you know if I can import bone marrow and what could I get for it on the street.
Any ideas?
In this, as in so many cases, the actions of our government are depraved and disgusting.
On the other side of the issue, bone marrow, like blood, is regenerative, so you are not selling parts, you are paying for inconvience of a needle put into your bone.
As the death toll from the organ shortage mounts, public opinion will eventually support compensation for organs in the United States. Changes in public policy will then follow.
In the mean time, there is an already-legal way to put a big dent in the organ shortage — allocate donated organs first to people who have agreed to donate their own organs when they die. UNOS, which manages the national organ allocation system, has the power to make this simple policy change. No legislative action is required.
Americans who want to donate their organs to other registered organ donors don’t have to wait for UNOS to act. They can join LifeSharers, a non-profit network of organ donors who agree to offer their organs first to other organ donors when they die. Membership is free at http://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.
Giving organs first to organ donors will convince more people to register as organ donors. It will also make the organ allocation system fairer. Non-donors should go to the back of the waiting list as long as there is a shortage of organs. Everyone can offer to donate their organs when they die, no matter what their medical history is.
Twenty years too late for my cousin and the three daughters she left behind. But, quietly satisfying..
a right approach, this reduces all the illegal practices, hope it happens world over for any kind of donor.
if a hospital and doctor can charge, why cant the donor.
April 1, 2022 Washington, DC — Treasury officials have determined that the donation of organs for a fee is in fact a sale, and such sales attract income and sales taxes in the jurisdictions where they take place. The IRS would like to remind you that the sale of organs of a US citizen, where harvesting occurs outside the United States or in international waters, is still taxable for federal income tax purposes. Citizens undertaking such procedures are reminded to file a Foreign Organ Removal Report by June 30 of the year after which removal take places; penalties for negligent failure to file begin at $10,000 and can rise to 50% of the value of each organ removed in cases of fraud or repeated neglect of the rules. In most cases, for federal purposes the sales of organs will be regarded as a sale of collectibles subject to the 28% rate, since the body can be considered to be a collection of organs. Bulk sales of organs on the US organ futures markets still benefit from the 60/40 rule whereby 60% of the gain is regarded as short-term capital gain taxed as regular income and 40% is taxed at long-term capital gains rates. Organ futures may be held in an IRA account tax free, and under the Ron Paul Tax and Health Sanity Act of 2019 can be withdrawn for actual delivery with no tax penalties in the event that the organ is needed, even before the IRA holder turns 55 years of age. Organs do receive a step up in cost basis on the death of the donor, so you don’t need to keep Uncle Billy Bobs beer receipts to determine the cost basis of donating his liver after he is dead.
How is it that a great many people believe it is moral for a starving man to steal a loaf of bread to feed his family, yet immoral and exploitative for him to sell his kidney to do the same? And yet in general they believe that stealing is bad and saving lives is good. I just don’t get it. Helping the poor = good. Giving a kidney to save a dying man = good. helping the poor in exchange for giving a kidney to save a dying man = exploitation??????
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