Term Papers on
Economics of Organ Donations
Background
Economic thinking and experience can be applied successfully to almost every
human affair in this world for the sole purpose of the improvements in the
quality of life for the humans. Economics deals with the limited scarcity and an
unlimited number of wants of humans. It has solved the problems of genetic
testing, patents, health and wealth insurance, legal gridlock, probation and
parole, urban transit, intelligence gathering, bankruptcy, investor protection,
and even the shortage of human organs in donations.
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It is the last area mentioned above that this paper reflects to. This paper is
based on the economics of organ donation. The very basic principle of scarcity
is truly applicable in this case and the role of economics is further
highlighted by the fact the human organs are scarce in supply and there is a
huge demand for different organs. There is a need to design a market structure
whereby human organs may be traded saving lives. Although there are many
religious, cultural and ethical issues involved with organ donation and any such
law which forms a legally binding contract for a person entering into an organ
trade would need to be highly immaculate. But this paper is based on the
assumption that given all these factors is held constant for a while. For
example, it assumes that there is no ethical trauma involved and that it is not
an ethical question whether to save a criminal’s life by implanting a liver from
a saint person. It is the life of a human being that is important irrespective
of his personal qualities.
Statistics show that about 5000 Americans die annually while on the organ
transplant waiting list. The main suppliers in the organs market today are the
donors. Of course the demand is much higher than the donated supply of organs.
This situation cannot be catered to without commercializing the organs market
with contractual bindings on both parties. Some people have proposed allowing
payments to donors (or their families) so that market incentives may increase
the number of donations.
Important Features Of Market For Human Organs
The organs market needs to be categorized into two basic parts: Spot or during
life market and futures or after life market. Human organ’s market is not just
another market for flesh and meat. It is more like a prostitute’s market. The
difference is that a prostitute does not sell but rents her body for a while and
her contract is executed during her lifetime whereas the organs of a human being
form an integral part of the body. Any sale of such organs would mean wither the
person would have to live the rest of his/her life without the organ or (s) he
is dead and therefore least bothered to know what happened afterwards.
Uncertainty
There is uncertainty involved in the organ’s availability. Even after entering a
contract to donate the organ(s) upon one’s death, the buyer is not sure of the
time when exactly would the organ be available. At the same time a debate needs
to be raised whether to allow a person to donate his/her organ(s) prior to
his/her death on the financial grounds? Ethical grounds or the grounds of love
and affection? The uncertainty of the time of availability of the organ(s) is a
hindrance to the market structure affecting the buyer. Moreover, the current
donor card is an unenforceable "unilateral contract", if the card-carrier were
paid to carry it then those needing organs would have a legal right to the
cadavers' organs.
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This situation can be covered by forming and binding only companies (legal
entities assumed to be going concerns) and not the individual end consumer to
enter into such contracts. No end user of an organ should be legally directly
allowed to enter into any such contracts on his/her own. The organ company would
enter into contracts as to the type, name, and other specifications of the
organ(s) with the individual seller. On the other hand, the seller cannot be a
company and should be the person himself donating the organs entering into
contract but emphatically endorsed by his/her lawyer through properly documented
legal papers.
Asymmetrical Information
Organs are not easily matched from one person to the other. How should then one
treat the expenses involved in the testing to find a match? The asymmetry of the
information on the organs needs to be covered by creating a huge database and
undertaking a scientific study to find out a simple method of maching the organ
need with other organ supply.
Changed Incentives
There are many incentives that are currently being given to the organ donors.
One such example is that of the University of Wisconsin. It offers many
incentives for the employees who offer to serve as a bone marrow donor or human
organ donor under the authorization of 1999 Wisconsin Act 125, s. 230.35(2d),
Wis. Stats, and the University of Wisconsin System Unclassified Personnel
Guideline #10. The University allows up to five workdays with pay for employees
participating in a bone marrow donation or 30 workdays with pay when
participating in a human organ donation. While on the leave of absence, the
employees would remain in pay status. Therefore, receiving pay, benefits,
seniority credit, etc. without interruption. The governments should encourage
such organizational attitudes.
The government could also pay for the funeral of the donor or allow each of us
to sell the rights to our organs as futures contract. This way our family can
benefit after our death. After all people do have life insurances. The idea
behind a life insurance is also that after death the beneficiaries would
benefit.
Supply and Demand
The current system for procuring organs gives nonprofit organizations exclusive
rights to harvest in their territories. Thus they create a monopoly and
therefore are inefficient in the allocation of their resources properly. The
pieces of such organs are also distorted. The markets should be opened for
competition from the private enterprises. Adam Smith has pointed out in his
invisible hands theory that by letting every individual to pursue their private
goals, the society is actually maximizing its overall benefits. Since by
allowing private enterprises to enter the market, they would devise strategies
for the organs’ market development and any profits reaped by them would mean
more organs being transplanted in a given year.
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A free market in human organs (currently banned by federal law) would also
quickly end the human organ shortage and does not imply that organs would go
only to the wealthy. Increase in the supply would also bring down the prices
since the pulling force on the price from the excess demand would decline by the
decline in the excess demand itself. Tabarrok (2002) has explained that organ
shortages might also be eliminated with a “no give, no take” rule that makes
donor organs available only to those who pledge to bequeath their organs.
Current federal laws that forbid the sale of human organs should be eliminated.
Prices through a market mechanism directed by proper federal laws can be used to
clear the deadlock in supply. Tabarrok (2002) discusses some possible problems
with using price as a clearing mechanism. Instead of viewing the human organ
shortage as a pricing problem, he argues that it is a classic “tragedy of the
commons” problem whose solution is “enclosure,” i.e., restriction of access to
organ transplants to those who previously agreed to be organ donors—in short, a
“no give, no take” rule. Your pledge to bequeath an organ is the premium you pay
for the right to receive a needed organ.
Tabarrok also predicted that good things would happen if organ transplants were
restricted to people who previously had agreed to donate their own body parts.
Morin and Deane state that a requirement would encourage organ donations,
thereby reducing the current shortage of such body parts as hearts, kidneys and
lungs. The current shortage of donor organs means that some people die or
continue to have a miserable quality of life. Ethicist Eike-Henner Kluge argues
that the shortage might be less serious if health care workers followed existing
laws used signed organ-donor cards as proof of consent and stopped asking next
of kin for permission to retrieve organs. The current retrieval protocols from
transplant societies emphasizing next of kin’s importance and permission should
be overcome to increase the supply. More importance should be given to the
consent card and its authentication.
However, there are some inherent weaknesses of the product itself i.e. organs,
which hinder any smooth functionality of such a market. For example, the
suppliers are limited to those who are healthy without chronic or otherwise such
ailments. Although all individuals can indicate their intent to donate but
persons less than 18 years of age must have their parent's or guardian's
consent. Another problem is the necessity of the medical suitability for the
donation, which is determined at the time of death. The main important factor on
whether a person can donate is the person’s physical condition, not the person’s
age.
The Uniform Anatomical Gift Act allows for organs, tissues, or parts to be used
for transplantation, therapy, research, and medical education. Another hindering
factor to smooth supply of even the healthy organs is that some organs or
tissues may not be used if it would interfere with an autopsy or another
investigation.
Insurance
There is a need to be insured organs for the true match, time of delivery and
insurance for the safe and successful implantation of the organs obtained. There
are many insurance companies working in this area but there is a need to
revitalize their functions on the above-mentioned points. Any act of insuring
the organs would increase the demand for the organs but at the same time
increasing the cost of the organs.
Health of the Organs
Health of the organs is very important as well as a natural restriction to the
smooth supply. Donated organs and tissues are screened for infectious diseases
such as hepatitis and HIV/AIDS. If an HIV test is positive, the deceased donor's
family could possibly be informed of the results. It is a crime in some states
to try to donate organs or tissues if you know you are HIV positive and that the
virus may be transmitted by a donation.
References
Entrepreneurial Economics: Bright Ideas from the Dismal Science Oxford
University Press Edited by Alexander Tabarrok March 2002 http://www.entrepreneurialeconomics.org/summary.html
1999-2002 Wisconsin Status and Annotations, Updated through September 30, 2002,
http://www.legis.state.wi.us/. /rsb/stats.html
University of Wisconsin System: Intent to Donate Bone Marrow or a Human Organ
1999 Wisconsin Act 125 Wis. Stats. 230.35 (2d)
“Market Solutions to Bad Genes and Organ Needs,” by Richard Morin and Claudia
Deane The Washington Post, February 19, 2002
Organ Donation and Transplantation, November 19, 2001,
http://www.unn.ac.uk/societies/islamic/modern/organ.htm
From the 'Lectric Law Library's stacks Organ Donation, [Last Revised 2/02]
http://www.lectlaw.com/filesh/qfl03.htm
Decisions About Organ Donation Should Rest With Potential Donors, Not Next Of
Kin by Eike-Henner Kluge, PhD Chair of the Department of Philosophy at the
University of Victoria. CMAJ 1997; 157:160-1
http://collection.nlc-bnc.ca/100/201/300/cdn_medical_association/cmaj/vol-157/issue-2/0160.
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