Most proposed changes to the healthcare system involve a tradeoff between costs and health outcomes. A potential exception to this rule would be a policy that increases kidney donation, which would allow substantial savings on dialysis therapy for patients with end-stage renal disease. The policy would also improve these patients’ quality of life and reduce the kidney shortage that causes black market organ trafficking. While it would be controversial, a regulated market in which living persons could accept monetary compensation for kidney donations may be the best way to boost transplants.

About half a million Americans are being treated for kidney failure, also known as end-stage renal disease. The average wait for a kidney transplant, which is usually the optimal treatment, is about five years, and those without access to a donated kidney receive expensive dialysis therapy. Dialysis patients experience deteriorating health and living conditions, and many die waiting for a transplant. While donations have increased modestly in the past few years, demand has surged thanks to success with transplantation as well as an aging population and higher rates of chronic disease that cause kidney failure.

Although the risks of organ donation cannot be dismissed, the mortality risk for live kidney donors has been estimated at 0.03 percent. The reason supply does not rise to meet demand has less to do with the consequences of surgery than with the fact that U.S. law prohibits individuals from being paid for their organs, meaning transplants are provided entirely by altruistic donors.

The shortage created by this policy has led to another problem: illegal organ trafficking.  Legally prohibited from paying American donors, dialysis patients have been known to seek paid transplants from desperately poor people in developing countries. Americans travel abroad for transplants, particularly to South America, and there are even reports of third world donors being brought to the United States. Under-the-table transplants take place in medically precarious circumstances and are facilitated by organ traffickers, who often take advantage of donors’ poverty and ignorance. Murder for organ extraction and outright organ theft are rare, but it is not uncommon for traffickers to fail to pay willing donors their promised amount or to mislead them about the nature of the procedure. While there have been no comprehensive evaluations of the magnitude of organ trafficking, the heinous nature of the crime as well as its potential for growth in light of the ever-growing demand for kidneys, demands that it be addressed.

What can be done about the kidney shortage? The limited supply of viable organs from deceased donors and comparatively low rates of successful cadaveric transplants suggest that boosting deceased organ donation is only a partial solution. Attempts to increase altruistic donations by living donors have had limited success. On the other hand, economists Gary S. Becker of the University of Chicago and Julio J. Elias of Stanford estimated in 2007 that a payment of about $15, 200 per living kidney donation would generate enough willing donors to eliminate the shortage. Monetary compensation has worked in Iran, which created a government-run donor payment system in 1988, and for the past twelve years has been the only country in the world without a kidney waiting list.

Compared to the average medical cost of transplantation, which Becker and Elias put at $160,000, donor compensation would amount to a small price increase. The move could even be a cost saver. Dr. Arthur J. Matas of the University of Minnesota estimates payments on the order of $100,000 could be made to donors and still be cost-neutral given the savings on dialysis therapy. Since treatment for end-stage renal disease is covered by Medicare, an increase in kidney transplants would go a long way toward mitigating the program’s unsustainable budget trajectory.

The obvious caveat is that the market would need to be closely regulated to prevent the kind of exploitation that occurs in developing countries. The government would need to ensure that donors are fully informed of the consequences of surgery and receive adequate compensation and post-operative care. Even with such protections, an organ market might still be subject to criticism of exploitation of poor and lower middle-class donors, as well as its “commodification” of the human body and possible social repercussions for paid donors. These are legitimate objections, but it is doubtful that they outweigh the relief for dialysis patients, reduced incentives for organ trafficking, and substantial cuts to healthcare costs that would accrue from monetary compensation.

To establish a functional kidney market, Congress needs to repeal the ban on compensation and establish a regulatory framework. In the meantime, states can at least reimburse donors for the expenses of surgery. In January 2004, Wisconsin created a state income tax deduction for costs incurred by living donors in terms of travel, lodging, and lost wages, and seven other states have since enacted similar legislation. Altering incentives at the state level may be the best way to build support for a broader system of monetary compensation for organ donors. With proper oversight, such a system could eliminate a tremendous amount of suffering and waste.

Peyton R. Miller ’12 is a government concentrator in Winthrop House. His column appears on alternate Tuesdays.