Nobel Prize-Winning Economist Alvin Roth on Organ Markets

There are approximately 130,000 new cases of kidney failure annually in the United States. It is disproportionately a disease of the poor, and is four times as likely to affect Black people as White people. Kidney failure costs Medicare alone more than $55 billion per year, mostly for dialysis. More than 500,000 people are presently on dialysis, about half of whom will die within five years of beginning treatment. The best treatment for kidney failure is transplantation, but in 2025 fewer than 30,000 people in the United States received kidney transplants. So most people who could benefit from a lifesaving transplant will die without one.

About 90,000 people are registered on the national waiting list to receive a deceased-donor kidney, and many more would be, if there were enough transplants for all who need them. Thousands die each year while waiting, and thousands more are removed from the waiting list when they become too sick to undergo transplant surgery….

[K]idneys for transplant remain in tragically short supply. So it is past time to consider amending the 1984 law that prohibits giving “valuable consideration” for a kidney for transplant.

I am a longtime advocate of legalizing organ markets. Over the years, I have pointed out that doing so would save many thousands of lives, save many more people from years of painful kidney dialysis, and increase bodily autonomy. I provide an overview of these and other points in my recent book chapter “The Presumptive Case for Organ Markets,” where I also address a range of standard counter-arguments, such as claims that organ markets would lead to “exploitation” of the poor, that legalization would corrupt our ethics, or that paid donations would “crowd out” altruistic ones. Legalizing organ markets should be a high-priority issue for anyone who cares about saving lives and increasing liberty.

But Roth’s advocacy is far more significant than mine, because he’s one of the world’s leading economists. And, as a left-liberal, he can’t easily be accused of advocating legalization because of ideological bias.

Roth does have some concerns about kidney sales that he argues need to be addressed:

We wouldn’t want inappropriate donors to be unduly influenced to give up a kidney. (This is something already considered when screening the thousands of people who donate one of their kidneys each year without payment.) Another concern is that we wouldn’t want to live in a world in which only rich people could get kidneys, by buying them from poor people.

I am not entirely sure what Roth means by “inappropriate donors.” But if he means people whose kidneys are in poor shape or who are bad matches for a particular patient, health care providers would have strong incentives to screen kidneys for quality and for proper matching, because otherwise they would be subject to liability for fraud, malpractice, or negligence. In addition, patients and insurance companies would gravitate away from providers who develop a reputation for poor screening practices. Ultimately, economists estimate we need  about 70,000 additional kidneys per year to fully meet the needs of patients suffering from kidney failure in the US. If payment is legalized, a population of over 300 million people can easily provide enough willing donors that health care providers need not settle for kidneys in poor condition or donors who are bad matches for particular patients. Here, as elsewhere, market incentives are a great way to alleviate shortages, and increase quality.

As for the concern that only “rich people” would be able to purchase kidneys, that is no more likely than that only rich people could access the many other services provided by the market. Health insurance can pay for kidney purchases, just as it pays for consumption of many other medical procedures and supplies needed by people in catastrophic situations. And, as Roth recognizes, this would actually be cheaper than the current practice of paying for years of kidney dialysis, during which many patients are impoverished by not being able to work (or at least no full-time).

Rich people who need kidney transplants will be able to buy them. But rich people would have no incentive to buy more than that, any more than rich people buy up all the world’s food or all the other medical supplies.

Government can  subsidize purchases of kidneys for poor patients, just as it does for many other medical services. Here too, subsidizing kidney purchases is likely to be cheaper than the current policy of subsidizing kidney dialysis. And people who get transplants quickly can thereby also return to the workforce faster, thereby further reducing the cost of kidney disease to society and to the public fisc.

Roth points out that “[i]t would be financially feasible to pay donors quite generously without requiring recipients to pay anything at all. Donors could be paid entirely from the savings to the health care system by taking patients off dialysis.” I largely agree. But I think it best if most purchases are made through private insurance plans, rather than by the government. That would incentivize efficiency and competition, and reduce the burden on taxpayers. Government subsidies are best limited to poor and disabled people unable to support themselves.

Almost any system of legalized organ markets would be far preferable to the status quo, where some 40,000 die needlessly every year, and tens of thousands more are condemned to long periods of painful kidney dialysis. Roth and I may not fully agree on what the optimal organ market system would look like, we do agree that legalization would be an enormous improvement over the status quo.