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This post is not intended to be an all-encompassing discussion of the problem of kidney shortages, and the main arguments for an against, rather it is a lightly edited illustration of the conversations we have after I teach lectures on the “efficiency” of the current kidney allocation system. Indeed, we end up having one to two sessions in our Intro Econ class and a session in our Intermediate Micro class where we cover directly or indirectly issues related to kidneys. I would post the videos here, but I think copyright prevents me from doing so. Most of what you would want to know is in those videos.

In any case, I concluded our most recent talk with a back-of-the-envelope calculation about the “efficiency” loss due to our current system of putting people on waiting lists rather than more creative approaches to both increase the amount of kidneys available and to stop the waste that is incurred by the current method of rationing the very scarce kidneys.

The number is huge and it can be arrived at both by considering what the “Value of a Statistical Life” is and the suffering that patients endure while waiting for a kidney, or it can be backed into by standard Willingness-to-Pay measures by what we actually observe in the current kidney “market.” The number is a twelve digit number. It is closer to $200 billion than it is to $2 billion. Even if I am wrong, and the estimate is closer to $10 billion, that remains a spectacularly huge number.

In what follows you are missing a lot of context, and the long discussions of what we mean by “efficiency” and so on, but I think they are informative nonetheless. My takeaway is that in almost all discussions like this – whether it be kidneys or something else, we are either having proxy discussions for something else, or at best they are downstream from other ideas that ought to be part of our regular conversations but that we never get to have. So, here goes:

Wintercow:

Before I begin, I wonder how much any discussion is really about the topic at hand, I will try to keep this to kidneys, but it’s probably just a proxy argument for something else ..

Interlocutor: Hope you are doing well. I have spent a significant amount of time since Thursday’s lecture thinking about legal kidney markets and its associated solutions and problems.

Wintercow: I guess a couple of things before I read. When I say “markets” I cannot emphasize enough that it means nothing more than “impersonal mechanism to bring buyers and sellers together where some “price” is used to clear” … that doesn’t commit us to much more than one simple thing. What is that? There must be additional incentives provided to potential “sellers/donors” than we see today, since today’s market is certainly not cleared. And a second thing is that “solutions” even if they are ones I prefer are not really solutions they just introduce other tradeoffs. And all of this is against a backdrop of ethical and other economic considerations that really ought to be deeply hashed out before engaging with this applied topic – sadly our university doesn’t do this, there are very few shared common intellectual experiences we all have, I wished there were some.

OK, moving on.​

Interlocutor: You had a very convincing argument for making kidneys legal to trade.

Wintercow: Maybe, maybe not. Maybe I didn’t buy it myself. I would use the term “legal” here only in the sense that it is NOT the current system where kidneys are allocated based on UNOS and doctor protocols. Let’s be clear about the challenge. There are not enough people getting transplants. Absent an incredible new technology, or absent a really deep commitment to better access to healthier lifestyles before kidney disease sets in, or better understanding of genetic predisposition to kidney disease THEN considering different transplant scenarios is an important argument. Of course, if this were a class on health or a full lecture on kidneys (it wasn’t, I used it as an example of how a price control impacts welfare), then we would spend a hell of a lot more time on these other issues. I REALLY DISLIKE that so much of our medical reform ideas, complaints, problems and more have to do with treating disease when it happens rather than thinking about the myriad contributing factors – and that is very wasteful and serves lots of powerful entrenched interests.

Be that as it may, ​let’s keep this conversation on the targeted question of what is a good way to do transplants under the current world we live in

Interlocutor: But I have a few big concerns that I feel were overlooked and perhaps you can offer insights to them.

Wintercow: Yes, many things overlooked – again I wished I had time to do a full two hours on the topic, but I intended it to be an illustration of what price controls do, with a little color added to it. I also plan a longer discussion on “efficiency” (actually I may not give it since COVID has majorly slowed down my ability to cover material) that probably would touch on a lot of the questions that come up in issues like this.​

Interlocutor: Overall, I am concerned that when you take something like the kidney market out of its “in the hospital” context and into “supply and demand” land, you conveniently ignore a lot of suffering and important moral issues.

Wintercow: ​Michael Sandel is a professor at Harvard who has written extensively on this, if you want a long-form consideration (that aligns with your concerns) I would recommend the books and articles he has. You wouldn’t be surprised that I have rejoinders to much of it.

But to THIS particular point, and this makes me sound “out there” … I actually made the argument that I did BECAUSE I believe it to be BETTER on both suffering and moral grounds. I think it is far more moral than anything we are doing now. I did not say that in so many words, but I would do so.​

Interlocutor: Specifically: It seemed like you overlooked the fact that giving a kidney is a long and painful process, even with modern medical procedures.

Wintercow: That is true REGARDLESS of what system is in place – whether donation-based with zero incentives, or with more incentive-laced procedures. So I wouldn’t suggest that this is a mark against markets, indeed it is a mark in favor. The more transplants we do, the more expertise we develop, the safer the procedures get – just look at what has happened to heart procedures over the last 20 years as an example. But the way other countries have done this, and the way I would do it if I “had the power to make changes” is NOT to sell the idea as “Paying People for Kidneys” or to “Have a Kidney Market.” I think those words are meant to obfuscate and create fear.

Precisely because the procedure is long and painful, the correct way to think of “compensation” is to better cover the experiences of the donors than we do today. I, too, by the way, have explored being a donor, as my Dissertation Advisor is suffering from kidney disease that will kill him, and he directly asked me to be a donor. In other countries, the compensation takes the form of free or deeply subsidized medical care (paid by taxpayers) over the course of a donor’s life, to various programs to make up for time lost at work.

As you know, the procedure has become less invasive over time, and the probability of success for the donor is VERY high – and recovery times have shrunken. And with some very tiny exceptions, the lifestyle of a person with one kidney is not expected to be very different than the lifestyle of someone with two. ​

Interlocutor: I’ve actually looked at giving a kidney undirected because of the need, and I found that a major deterrent is how long you have to be in the hospital. You also still have to be on medicine and take it easy for a pretty long time after the surgery. It’s not a walk in and out experience.

Wintercow: It is also shorter than, for example, a knee replacement or hip replacement recovery.​

Interlocutor: In other words, you have to really want or need to do it to give a kidney.

Wintercow: I agree. Which is why basically NO ONE does it.

But remember a key point to compensation. Given that 2.5 to 3.0 million Americans die every year, and that “only” 100,000 or so need transplants, we can almost entirely make up the shortages by increasing the numbers of people willing to do deceased donations. I am close to someone who works with the Finger Lakes Organ Donation services as her job in the hospital requires it on both the giving and receiving side. Many of her patients have multiple organ failure and even if the medical procedures they are in for are successful, the patient would need dialysis and transplant to have it be “worth while” to do certain procedures. At the same time, she does get lots of young patients who have disease and sadly will not survive – part of her job is take the responsibility of talking to families about organ donation – as these patients already being in hospitals and in ICUs, would be “ideal” to “harvest” organs from as compared to waiting for people to crash on motorcycles and some such things. We can generate a large share of the needed donations from situations like this, if we had some way to make the incentives clearer for families.

And as we read down this discussion more, I can assure you that the large share of these patients come from backgrounds that you would object to selling them on the grounds that their health needs and poverty make it troublesome to have them making live donations. Their kids and their families would surely benefit from any compensation, especially if they are already struggling with the medical bills from the heart unit they are on.​

Interlocutor: In practice, the only people who give are relatives who care a lot about the person, or, if it was legal to sell, someone who really needs the money. (There are usually less than 200 undirected donations a year, about 3% of all kidney transplants)

Wintercow: ​Again, the problem is that basically no one donates now. Even though this is an “easy” to understand problem, even though the benefits to the needy are enormous, and even though we all claim to want to be good people and do the right thing, no one donates. ​

 Interlocutor: The major problem, to me, is that I don’t think anyone should ever have to be in a position where they need the money that bad to undergo a lengthy surgical removal of their kidney.

Wintercow: ​I’ll try not to rehash too much what I sent in those old posts – but there is absolutely nothing at all in the kidney discussion that is unique to kidneys here. Our poverty puts us in a position to “need” to do all kinds of unpleasant things just to make ends meet. That said, the key economic point (and it is true in rent control discussions too for example), is that by making kidney sales/compensation illegal, the price that the poor could get for selling them on the black market today is so high that if they are in fact “forced”, it is worse now than under my proposal. Further, when you think about the innovations in surgery and the way competition drives down prices, my suspicion is that a few thousand for a kidney is probably what will be the going rate if there were some ugly auction (again that was NOT what I was advocating nor what I think would prevail, but for fun let’s push to the extreme case where that is in fact how we do it) … so a key question is whether the poor would be induced to suffer for weeks and weeks just for a few thousand bucks.

Some factors that mitigate against this are, of course, the fact that there are decent baseline resources afforded to poor families that would seem to make this pretty undesirable. A full assessment of the consumption levels of the American poor (not stated earned income) that captures the full array of local, state and federal services (usual comparisons between the US and small European countries often ignore the large state and local portions of support, and of course what remains of private charity) should make it less attractive to be forced to do anything. Case in point – look at the labor force participation rate. It has fallen dramatically even as the data seems to suggest that the poor are falling behind. If the poor are “forced to do really unpleasant things” just for a few bucks, especially if those unpleasant things take a couple months, then how come they are not chomping at the bit to do seasonal work for money. After all, working at a job (I can show you all kinds of local examples) is unpleasant, but it is nowhere near as unpleasant as giving up a kidney, and the payoffs last long after the time you are forced into it. I mean, my friend is paying help in her shop $15.50 an hour, and almost unlimited hours. So, that’s about 900 hours of working. If you worked your butt off for three straight months, you can make all of the money you would have made selling a kidney, and then still have a kidney.

That is just one example.​

Interlocutor: I understand that we live in an unideal world where people have to make trade-offs, but the whole idea of legalizing kidney sales means that there will be some people who are willing to do it for some price, and poor people will be willing to do it for a lot less. 

Wintercow: “Legalizing kidney sales” is not how I would frame it but we will go with the idea. I think as a general condition this is right, but it still is an empirical question. And for issues as important as this, it would be nice to do the work to figure out if, in fact, this is true.

If it is true, and there are nonetheless objections, I think one of those pieces I scratched out long ago comes up with very simple solutions – DO NOT ALLOW THE POOR TO SELL THEM. Ouila! Done! This would guarantee that the poor are not exploited AND that we get enough kidneys. ​

Interlocutor: So, would I rather live in a world where fewer people die because there are more kidneys available? I would.

Wintercow: ​The point of thinking about efficiency is to think about HOW to make that happen AND to work on the tradeoffs/objections that I suspect you will raise below … (I don’t read ahead) …​

Interlocutor: But the kidney donors are going to be people who value going through a long, extensive, painful hospital process less than their compensation, and those people who end up making the transactions will be the “cheapest” options available (they are willing to give a kidney for less). And those will always be poor people. 

Wintercow: ​I don’t see that they will always be poor people. For example, if the poor are generally in worse health, then they will be less likely to be approved for the transplant, especially if we do genetic tests on the likelihood or family history of kidney diseases. I also don’t see that the idea follows. Wouldn’t the poor necessarily be more skeptical of having their bodies used as commodities? That seems to be a challenge we face in other areas.

This is all over above the question of who and why and how any of us should be allowed to determine what any of us sell. I don’t see massive objections to the poor being forced to do all kinds of other things … ​

Interlocutor: I know the argument against this, that poor people having access to money through kidney donation is better than poor people not having access to money.

Wintercow: ​Interesting. That is not an argument I would make. I might make it on the “exploitation” side of things, and simply talking up the idea that one model gives the poor agency (legalizing) and the other one doesn’t (current system) yet the rhetoric seems to make it sound like the former is the one that removes agency. I don’t know how that circle is squared.

The argument against this is that there is nothing in the “proposal” to move away from the current system that actually forces the poor to sell anything. For heck’s sake, the BEST part of my argument is that SO MUCH well being is generated by the program to “sell” kidneys that we can BAN the poor from selling them, AND use the proceeds from kidney welfare generated (even if just through longer life and hence more tax revenues and lower dialysis costs) and USE THAT SURPLUS TO DIRECTLY BENEFIT POOR PEOPLE. We can make the Medicaid program stronger. We can use the funds for better preventive health measures. To shore up access to healthy foods. Whatever we like. Just write checks.

To suggest that it’s simply an argument to “let poor people sell for money, and that is better than now” is almost entirely missing the argument.​

Interlocutor: But this is a lame argument to me because we’re not asking “what would the ideal situation be for this person?” we’re asking “how can we make poor people’s lives a little better without treating them as fully human?”

Wintercow: ​I, too, have demonstrated the lameness of the argument. On the other hand, “making marginal improvements” is a powerful tool. I used to be much more of a perfectionist, but think about things … we are not making progress AT ALL on many things … and part of the reason is the perfect being the enemy of the better.​

Interlocutor: A situation that is better for a poor person is obviously desirable over a situation that remains the same.

​Indeed go to my opening statements. I hate this conversation being taken out of larger context … but I promised myself this would stick to the kidney chat.​

Interlocutor: But I think that’s asking the wrong question. It’s not getting to the root of the problem.

Wintercow: ​I agree. And I also agree that almost nothing “we” are debating about today is getting to the root of any problem. Now is not the time to go into an exegesis on this …​

So, although I do support sex workers and their right to work, I suspect there are very few workers who would continue to do it if they didn’t “have” to in order to survive.

​Again this is something there is, and should be more, actual evidence on.  I happen to “know” quite well a decent circle of sex workers after I took a course on it … they would strongly object to your observation. And it would also return us to the conversation of agency and who gets to decide what is and is not good for people. That said, I WISHED we lived in a world where sex work wasn’t that big a deal …

Interlocutor: Again, I know the argument against this. “who is making poor people do anything? They don’t have to do it.” But they do.

Wintercow: Maybe that is a frail argument on social media, but it is not the right one. The focus of my example, and of any policy discussion is, and  ought to be, “how can we make improvements that are win-win-win?” Framing things as zero sum makes everything dead in the water.

That said … ​

Interlocutor: They have to do something to survive.

Wintercow: ​Right.​

Interlocutor: So, their choices are not good.

Wintercow: ​By what standard?​

Interlocutor: They can work for a low wage if they can find a job.

​That seems to be a very limiting way to frame it. They can start their own business. They can find a partner … which is one of the SUREST ways to avoid poverty. They can go to the military (ugh!). And of course, the wages required to live a materially comfortable life are lower today than at any point in a very very long time … I have been working a small project to demonstrate this … looking at a very healthy diet that can be made fresh every day, with transportation to/from work and school, safe and affordable housing, medical care, … it is surprisingly smaller than many people think. For example, I can rent half a house in Henrietta that is on a bus line (and close enough to bike or walk to many places) for $650 a month. That is $7,800 a year. Internet included. Heat included. But even add $100/mo for phone and another $40/mo for some streaming subscriptions. That is $1,680. If I made a fresh yogurt, with granola and two servings of fresh fruit for breakfast, a grilled chicken salad every day for lunch, a dinner of something like lasagna, with 3 additional fruit servings per day and one placeholder snack/meal (e.g. three scrambled eggs, two granola bars, etc.) I can do that really well on $60 a week or $3200 per year. My kids go to public school for free. At that income level you qualify for Medicaid/PPACA. We can continue … I get a number that is not too far north of $20,000 to live materially decently … for sure … I lived on $15,000 a year for three years of my adult life, as a reference, and none of those was living with my parents. I DID have about $15k of savings for emergencies, so take that with a grain of salt. In any case …​

Interlocutor: They can steal if they have to.

Wintercow: ​Petty theft has been on the decline for 30 years.​

Interlocutor: They can apply for the limited welfare that the US offers.

Wintercow: ​See above.​

Interlocutor: Or, they can get a quick infusion of cash by giving a kidney, despite the health issues that removing a major organ may incur.

Wintercow: ​This is the sorta usual “under capitalism you are free. You are free to starve under the bridge” argument.​

Interlocutor: So they don’t have to give a kidney. But they have to do something.

Wintercow: ​Where on the list does kidney donation rank? And what of the things on their bodies they can sell now. Where do the poor rank in Blood Plasma donation, which is already permitted? Where do the poor rank in sperm donation? How often are the poor growing their hair, only to chop it and sell it to wig makers?

A little more on the moral aspects later if I have time.​

Interlocutor: And when faced with a number of bad choices that can seem like the best option. “Why would you take away the best option?” you may ask. I don’t want to take away the best option. But I also don’t think anyone should have to be in that place to begin with.

Wintercow: ​Rather than write more, I will simply refer to the fact that “improving the current system” does not in any way require the poor to sell kidneys nor does it even have to allow it. I want to use an immigration analogy. I tend to be very pro-open-immigration. Many people I know are NOT. But let’s talk about the things that they SAY they are concerned with. “But immigrants use social services!” (ironically then they say in the same breath that immigrants steal american jobs … you can’t argue at the same time that immigrants are so lazy that they come here for the welfare and then are so hard working that they outcompete all of us lazy americans for work), or that they put pressure on hospitals, and so on. So, is the solution to BAN THEM ENTIRELY? Isn’t there a policy that addresses both my desire to allow immigrants to come here AND also the concerns that they MAY perhaps put localized strains on resources? I don’t know, like maybe having immigrants pay a slightly higher payroll tax rate on earnings for a little while?​ Or something. Does the answer have to be “BAN THEM ALL?” And the way the kidney discussion, like so many others, are framed are like the “Quantum Argumentations” that I increasingly see, and very much reject.

Interlocutor: What I’m trying to articulate is that in a world where everyone was on “relatively” equal financial standings (like within a factor of 10 for income) and everyone had access to basic needs like simple water, shelter, food, etc.

Wintercow: ​They do.

Interlocutor: then I suspect a market approach to kidney distribution would be a good solution. But until that happens, there are huge moral issues with legalizing kidney sales. 

Wintercow: ​ Why do the 100,000 people who suffer and die not have an equal moral claim? It is their population that is disproportionately poor and disproportionately black.

That aside, the point you are making seems to suggest “NO MARKETS AT ALL AND LOTS OF PEOPLE DIE vs. AUCTION OFF KIDNEYS  ON THE STOCK EXCHANGE and EVERYONE LIVES BUT IT FEELS GROSS”

Now, I do not believe that is the point you are making, and it is certainly not the vision or version of “markets” that I would advocate for or most people …

But then again

Interlocutor: I know that 13 Americans die every day because they didn’t get a kidney. It is tragic.

That massively understates the suffering, pain and anxiety,

Wintercow: it is also MUCH SMALLER than many other things that we either accept (on some arguments) or find appalling (on others) . 35,000 Americans die in car accidents. Most of those deaths are in cars that are smaller and lighter and less safe, and this is a risk we are perfectly OK to allow the poor to endure. They are “forced” to buy less safe, older, cars than their wealthier counterparts. Does it follow that car sales ought to be prevented, or that driving ought to be prevented until everyone has a level of basic needs met so that the “forcing” into the less safe care resembles more of a money preference vs risk tolerance tradeoff vs. “my only option is to buy this death inducing car because I need to get to work and can’t afford to live closer, there is no bus service where I live, and I am forced into the Ford Fiesta).

Interlocutor: What is also tragic is that poverty exists in a country with enough wealth for poverty to not exist.

Wintercow: That is taking us far afield from the kidney question. Let’s do that over another email. I took a slight crack at that question in 108 … but not full throated.

Interlocutor: While it is hard to pin down the exact number, poverty’s impact on lives lost is likely much higher.

Wintercow: I have suggested in MANY lectures that “poverty is the #1 killer” … it reduces life expectancy by some measures up to 10 years … and MANY of our government programs (Medicare and Social Security for example, contrary to popular wisdom) make the problem WORSE and NOT better for the poor.

Interlocutor: I think that ending poverty, equalizing wealth and legalizing kidney sales would be an appropriate and compassionate solution.

Wintercow: Again, I promised I would stay on point. Economic growth would “solve” just about all of our problems (except for some of the existential ones).

Equalizing wealth … no. MORE wealth? Yes.

But one of the messages from the lesson is that reforming the kidney market MOVES US CLOSER TO LESS POVERTY, it MOVES US CLOSER TO EQUALIZING WEALTH, all at the same time saving tens of thousands of lives. It does precisely what you are asking for. And that is more than “efficient,” it is moral.

Interlocutor: But to legalize kidney sales without first making sure that everyone has what they need makes me nauseous.

Wintercow: There are virtually zero Americans living in the kind of poverty that this statement implies. And not, that is not to suggest that those who ARE living in that kind of grinding poverty are to be ignored. The important point is that this argument needs to be separated, if only for pragmatic reasons.

But replace, “legalize kidney sales” with just about any other policy idea and see how that reads.

“Imposing carbon taxes and doing something about global warming” without first making sure that everyone has what they need makes me nauseous.

“Spending more money on inner city schools” without first making sure that everyone has what they need makes me nauseous.

And so on …

As far as the nausea, what that leads us to have to do is have a competing set of arguments about nausea. For example, I can easily argue that it makes me nauseous that we allow hundred thousand poor and black people to NEEDLESSLY suffer and die because we think that we have to “solve” poverty always and everywhere first before making this tiny marginal improvement. It makes me more nauseous when the very act of reforming the kidney situation would reduce poverty, promote equality and provide an opportunity for all parties to this situation to be made better off. Yet we refuse to even budge.

We don’t want to have dogfights about morals and values. Well, we can, but I hope you see my point. The point about using the efficiency approach I showed you is that right now we are doing the monetary equivalent of $200 billion of damage every year. That means there is a LOT OF ROOM to do better. it means that we are taking $200 BILLION of potential food, water, shelter, and more out of the world and flushing it down the toilet never to be seen again. It makes the goal of fulfilling everyone’s needs harder, not closer. Now I suspect the $200B is an overstatement, but I also use that figure because I am going to come back to a lot of COVID claims in a future lecture (perhaps) and this will put some folks in a pickle if they want to drop this number  some more.

So, what proposal is on the table to expand the supply of kidneys? Do we force people to “donate” out of a random lottery? Do we do what they do in some other countries and take them from prisoners? Or allow prisoners to exchange them for some freedom? Do we, …

Interlocutor: It is possible that I have missed something.

Wintercow: There are more specific issues. But yes, I believe you have missed both the actual argument I was making (i.e. that reforming the kidney situation doesn’t commit us to any particular moral outcome) and the essence of what it means to think in efficiency terms (i.e. that there is room to make everyone better off, and that it commits us to a real discussion about what we are really talking about instead of a feigned discussion about something else). And I think there is great value in that.

Interlocutor: In the meantime, I am not convinced that a world where people can sell kidneys is actually better or if it just grants more power to those with money.

Wintercow: Again, those with money are not the ones making up the list. The list is over-represented by the poor and by minorities. Furthermore, we are not committed to ANYTHING on the “buyer” side, and I made that clear in the lecture. If you don’t want the rich to bid a zillion to get more kidneys, make sure the government or a third-party charity does all of the purchasing, and then distributes the kidneys for free or for a flat cost to the recipients and/or their insurance companies. After all, go back to the pieces I sent you, if you think the “market” system advatnages the rich, you may be right. But it does NOT advantage them more than the current system does. I cited the data in 108 – the wealthy are MUCH MORE likely to get transplants today than the poor … the current system is rigged against the poor. And it makes people like ME nauseous that someone, somewhere, has managed to convince so many well intentioned and thoughtful people that it is otherwise.

Interlocutor: I am not convinced that it is a world with less suffering. I would love to be convinced if you have a solution that solves the moral problems. I am not trying to be the bad guy in your market-driven solution. I just want to learn more.

Wintercow: You are not the bad guy at all, in fact quite the opposite. The only way we GET to the better solution is to hash out the biggest concerns and opportunities as deeply as we can, and ALWAYS encourage additional ideas to come, regardless of who they come from.

I have said many times that I do not believe a pure market world would be one I want to live in. And I hope that is for obvious reasons, maybe I will make them clearer one day. The right framing, for me at least, is not to make it more “market driven” (well, yes, in the quirky way that I conceive of what a market is) but rather, what are good proposals to get more kidneys available? Or do we just want to say, “nope, this is the best we can do?” And if we say that about kidneys, then where does that leave is in so many other areas of policy.

A simple solution (not that I advocate it) is simply to put a minimum income and wealth floor, along with vigorous medical standards for donations, as to who can donate. But there are many, many other and more creative ways too.

OK, gotta run, can chat more later in week after I get some more work done. Remember again, ​everyone is selling … everyone … in the kidney market, including us lecturers who get paid to discuss it, why is it ok for the nurse and the doctor and the delivery person ​and lab and so on to get compensated (and are not all of those situations “forced” in the same sense as above) but not the person offering up the most important part of the puzzle? Should college athletes be paid? Should factory workers get paid more? What is different about a kidney donor?

Note that we have left out an immense portion of a necessary moral and medical conversation, this remains massively incomplete.

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