The shortage in market-inalienable human organs: a consideration of 'nonmarket' failures

American Journal of Economics and Sociology, The,  July, 1998  by Emanuel D. Thorne

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I

Introduction

The proposal by a prominent organ transplant center earlier this year to hasten the death of potential organ donors illustrates the extreme measures being considered to mitigate the desperate shortage of organs. The ban on markets in organs is blamed for shortages that have resulted in long waiting lists (one-fifth of those waiting for heart transplants reportedly die while waiting) that have caused many deaths and worsened the plight of many more forced to live with disabling conditions (United Network for Organ Sharing 1995). Reflecting the general pessimism that the supply of organs can not be increased, the government held hearings in December 1996 that focused on the agonizing issues of how the current inadequate supply might be allocated more equitably.

Has our system of procuring organs, which relies strictly on donation, in fact reached the limit of its potential to generate supply? It is widely believed that if only we allowed a market in organs, supply would increase and shortages would disappear. But we should be driven to such thinking only if we are convinced that we have wrung all the supply we can out of the donative system.

To give up on our donative system, we would have to believe that the supply of donated organs is naturally constrained, a view that reflects the belief that altruists are born and not made. If altruism can't be cultivated, then efforts to educate the public about the need for the organs or to persuade them to donate would, of course, be useless and unproductive. But this notion defies both common sense and experience. If persuasive individuals of the moral stature of, say, Jimmy Carter or Colin Powell were enlisted to appeal to families of potential donors, isn't it reasonable to expect that acts of altruism might be inspired among many regular people?

Even more, since we don't use markets to obtain organs, we are asking procurers to urge, plead, coax, cajole, and otherwise exhort families, hospital staff, and physicians. Can we not expect that more effort on procurement would yield more organs?

In a recent study (Thorne 1996), I reported that in 1990 the cost of these "exhortation" activities directed at procuring donated human organs amounted to approximately $1,650 per organ. This cost is striking for at least two reasons: (1) next to costs of more than $3 billion for the nearly 16,000 U.S. organ transplants performed each year, the $25 to $35 million I estimated as the approximate annual cost of procuring donations is trivial; and (2) it may be the case that small additional investments in obtaining organs would yield a big payoff.

In fact, increased spending on procurement effort is associated with an increased yield of organs. We can see this in two ways. A 50% increase in the aggregate real spending on acquiring organs between 1988 and 1990 was associated with a 13% rise in the total number of kidneys procured. This finding is consistent with the notion that more effort yields more organs. Furthermore, a cross-sectional analysis of procurement organizations, in the same study, revealed that organizations that engaged in greater effort procured more donations.

One might well wonder why there are shortages if the cost of exhorting and cajoling families, hospital staff, and physicians is so cheap. In other words, if shortages in organs are due, as they appear to be, to inadequate effort rather than the inefficiency of appeals to donor altruism, why is there insufficient effort?

Perhaps the regulatory authorities and the participants are ignorant of the nature of the production system in which they are engaged. Or, perhaps the production system relying on exhorting donors is inherently problematic. Or, perhaps the shortage is due to the well-known limitations of the nonprofit organizations that are the key actors in this production system.

I explore all these possibilities in this article. In addition, I show that goods such as organs, in which markets are banned, have attributes of common property - a feature that might also contribute to shortages. I conclude that shortages may be due not to inadequate altruism but rather to failure to exploit the donative system's potential efficiencies.

II

Procuring Organs by Exhorting Donors

Let the term "exhortation" be used to describe the non-price efforts used to secure market-inalienable goods and services.(1) Exhortation includes efforts to inform and persuade all participants in the donative system who cannot be paid for what they supply. In the case of organs, exhortation includes efforts by procurement organizations to get next-of-kin to donate organs, and also efforts directed at physicians and hospital staff to identify, without financial remuneration, potential donors.(2)

Clearly, markets and command systems also rely on exhortation in the form of advertising, social marketing, and public education. In fact, exhortation might be used to secure what can neither be bought nor commanded, such as loyalty, friendship, devotion, and even love. A marvelous illustration of the need for exhortation (and/or intimidation) even in the face of apparently complete property rights is given by Barzel (1989) in his explanation of how it was possible for slaves in the Antebellum South to accumulate assets with which to buy their freedom.(3) Even under command systems exhortation in the form of moral suasion is very much a feature of organization (Adler and Pittle 1984; Bernardo 1971; Siegelbaum 1988).