If the 1984 law criminalizing organ sales were simply repealed, here's what I think would happen. In the short term, neither public (Medicare, Medicaid) nor private insurers would cover the cost of paying vendors. Many hospitals would not accept them either, just as many until recently would not accept donors who learned about their recipients from media accounts or sites like MatchingDonors.com. But some transplant centers would accept vendors, assuming they passed other medical and psychological tests. Recipients would have to pay out of their own pockets or perhaps with the help of charitable institutions or community fund-raising drives. This short-term situation would indeed benefit affluent kidney patients the most. But by taking these patients off the waiting list for cadaver kidneys, it would also help poorer people, just not as much.
Over the long run, however, we could expect payments for kidneys (and possibly liver lobes) to become as much a part of the normal transplant process as payments for surgery, anesthesia, or immunosuppressant drugs. Instead of making a deal with an individual patient, someone who wanted to sell a kidney would contract with a transplant center, which would screen vendors and match them with recipients. (Since screening is expensive, one proposal is to have a national or regional standard for "qualified vendors," so that someone who didn't pass muster couldn't just go from hospital to hospital.) Insurers, whether private or governmental, would establish the prices they were willing to pay, with, I would hope, a strong desire to find the market-clearing price that would eliminate the waiting list. In the video, I make the point that since the federal government already pays for everyone's dialysis, even a price of $90,000 a kidney would save the taxpayers money.
Video below the fold.
Hat-tip: Virginia Postrel
Interesting. What do you think of the ethics? Though the transplant doctor says he's never had a death, there certainly is a risk of the donor surgery turning out to have unforseen complications, and donors would most likely come from the lower socioeconomic classes. How could this work without having it feel like the rich were just preying on the poor and using them for spare parts?
Three things about the ethics.
1) Donors actually have better outcomes over time than the general population (probably because of increased monitoring of their health). So the objection based on the grounds of "their health might be hurt" is largely moot.
2) As Postrel mentions, you don't have to limit it to payments made between individuals. If Medicaid would pay for the kidneys that would also be fine, and it would guarantee that the poor would have equal access.
3) As the supply increases, the prices would come down. This would increase access for everyone.
This sets aside the point that people should be able to do what they want with their bodies.
Also, I don't buy the guys argument that adding money to the equation debases the altruism of the thing. Numerous people get paid for things that they ALSO think are very altruistic. That argument is based on the idea that you would turn off the altruistic from doing it by adding the payment. I don't buy that. Instead, I think you would just add more people so that the altruistic plus the self-interested. More kidneys for everyone.