Not long ago we wrote about organ donation and how the current shortages could likely be solved if we let the market work. The most obvious way to accomplish this is by paying organ donors. Governments have been quite hostile to this idea around the globe.
On Monday, Israel took some halting steps in this direction. As reported in a story on haaretz.com (full text here):
“The Jerusalem District Court instructed health maintenance organizations to pay kidney donors NIS 63,000 to cover their expenses, but did not rule on the issue of whether it’s allowed to pay for a kidney. “
So donors aren’t technically getting “paid,” but they do end up with an extra $13,000 in their pocket. Label it what you will, but if you inflate the expense enough, I’d call that getting paid. Not that $13,000 is full payment. My guess is that the market clearing price, at least in the United States, might be more like $30,000-$50,000. Even at that price, the payment to the donor would represent a relatively small fraction of the overall price of the operation.
Recently, in Haaretz, that same newspaper, the renowned economist Ariel Rubinstein wrote a book review of Freakonomics. All I can say is that I have seen the English translation and that I am glad that it is only available in Hebrew online! Despite (or perhaps because of the review), Rubinstein himself told me that Freakonomics jumped to #2 on the bestseller list in Israel the week after his review was published.
(Thanks to Judith Ronat for sending me the link on organ donation.)
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I work in transplant, and off the top of my head there are three major reasons why it’s a great cost-saving move for insurance companies to pay donors. First, the cost for just finding and getting a cadaveric kidney is billed to the insurance as $25,000 flat fee. So right there, having a living kidney donor is much cheaper for the HMO, which is a good reason to pay living donors. Also, often people wait so long on the list that they become sicker and are more expensive, so if they’ve got a living donor and can be transplanted earlier, so much the better. Third, dialysis is EXTREMELY expensive, and transplant is a really cheap option comparatively, even when you factor in the lifetime of drugs. $800 a month of drugs versus $3000 per week of dialysis.
I work in transplant, and off the top of my head there are three major reasons why it’s a great cost-saving move for insurance companies to pay donors. First, the cost for just finding and getting a cadaveric kidney is billed to the insurance as $25,000 flat fee. So right there, having a living kidney donor is much cheaper for the HMO, which is a good reason to pay living donors. Also, often people wait so long on the list that they become sicker and are more expensive, so if they’ve got a living donor and can be transplanted earlier, so much the better. Third, dialysis is EXTREMELY expensive, and transplant is a really cheap option comparatively, even when you factor in the lifetime of drugs. $800 a month of drugs versus $3000 per week of dialysis.
Notice the monetary units, please. That’s not $13,000, but 13,000 New Israeli Shekels. (Since I know you’re a big fan of Wikipedia, the link is here.)
Apparently, as of May of this year the exchange rate was approximately 4 1/2 NIS per dollar, which would make the kidney payment rate closer to $2900. Doesn’t change the substance of your point, but there is a different visceral (pardon pun) impact of payment under 3K vs. over 10K.
Notice the monetary units, please. That’s not $13,000, but 13,000 New Israeli Shekels. (Since I know you’re a big fan of Wikipedia, the link is here.)
Apparently, as of May of this year the exchange rate was approximately 4 1/2 NIS per dollar, which would make the kidney payment rate closer to $2900. Doesn’t change the substance of your point, but there is a different visceral (pardon pun) impact of payment under 3K vs. over 10K.
Lucy, it IS over 10K…the amount is NIS 63,000, not 13,000. This value converts to $14,342.96 (conversion of 1 : 4.39).
Lucy, it IS over 10K…the amount is NIS 63,000, not 13,000. This value converts to $14,342.96 (conversion of 1 : 4.39).
Does it matter that Israeli HMOs are government-owned and government-run and so this isn’t as much of a market reaction as it is a tax (10% of gross income supports the health system)?
Does it matter that Israeli HMOs are government-owned and government-run and so this isn’t as much of a market reaction as it is a tax (10% of gross income supports the health system)?