How Much Is Your Kidney Worth?

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By Virginia Postrel

Levy Izhak Rosenbaum of Brooklyn has been sentenced to two and a half years in prison for illegally brokering sales of kidneys. He will also forfeit $420,000 in profit. It’s the first case ever brought under the 1984 act outlawing the exchange of “valuable consideration” for organs.

Rosenbaum, who was caught in a sting as part of a broader corruption probe, may be the generous life-saver his supporters maintain. He may be the venial money-grubber portrayed by prosecutors. Or, like the donors who took money for their kidneys, he may be something in between.

But one thing’s for sure: While it lasted, his organ business was highly profitable -- a textbook example of how prohibition produces extraordinary margins for people willing to buck the law.

In one case, a family paid Rosenbaum $150,000 for a kidney from a man who got only $25,000 for his organ. That $125,000 profit represents a lot more than a finder’s fee. It’s a reward for breaking the law -- for bearing the risk of going to prison and knowing how to circumvent the system. Those figures also establish upper and lower bounds for the market-clearing price of kidneys, not in some impoverished country with desperate people and questionable medical procedures but in state-of-the-art U.S. transplant centers.

Nearly 93,000 people are currently waiting for kidney transplants in the U.S. Last year 11,043 lucky patients got organs from deceased donors, while another 5,771 received kidneys from living donors. At that rate, the waiting list will be down to zero in just under nine years -- if, of course, nobody else comes down with kidney failure. In the real world, the waits are getting longer and longer. Last year, 4,701 people left the list because they died, while another 2,466 became too sick for a transplant. The waits are particularly lengthy in some states.

Dialysis, which is covered by Medicare regardless of patient age, keeps kidney patients alive, but their health tends to decline. Regularly tethered to a machine, they also find it hard to work or otherwise maintain an active life. Every transplant from a living, unrelated donor saves a almost $100,000 compared to dialysis payments, estimates a careful 2004 study in the American Journal of Transplantation by transplant surgeon Arthur Matas and economist Mark Schnitzler. That doesn’t take into consideration the economic value of patients’ ability to resume normal employment, not to mention their happiness.

In other words, paying, say, $50,000 a kidney would not only save lives. It would actually save Medicare money.

Instead of forbidding compensation, driving it underground (or abroad) and keeping most kidney patients waiting, the law should regularize it. Allow the same insurers, public and private, who cover all the other costs of transplant surgery to also pay fixed fees to organ donors selected and screened by transplant centers. The payment could be cash, perhaps paid over time to discourage impulsive or desperate decisions. Or it could be payments of student loans, contributions to retirement accounts or other more-specific compensation.

Otherwise, the waiting list will continue to grow, as will the opportunity for black market organ dealers.

(Virginia Postrel is a Bloomberg View columnist. The author of “The Future and Its Enemies” and “The Substance of Style,” she is writing a book on glamour.)


-0- Jul/16/2012 17:16 GMT