Sally Satel on Organ Donation
Jul 24 2017

kidney.jpg Sally Satel, psychiatrist and resident scholar at the American Enterprise Institute, talks with EconTalk host Russ Roberts about the challenges of increasing the supply of donated organs for transplantation and ways that public policy might increase the supply. Satel, who has received two kidney donations, suggests a federal tax credit as a way to increase the supply of organs while saving the federal government money. She also discusses the ethical issues surrounding various forms of compensation for organ donors.

Virginia Postrel on Style
Author and journalist Virginia Postrel talks about how business competes for customers using style and beauty, going beyond price and the standard measures of quality. She looks at the role of appearance in our daily lives and the change from...
Tina Rosenberg on the Kidney Market in Iran
There is only one country in the world where a person can sell a kidney to another citizen who buys it. That country is Iran. Tina Rosenberg of The New York Times talks with EconTalk host Russ Roberts about the...
Explore audio transcript, further reading that will help you delve deeper into this week’s episode, and vigorous conversations in the form of our comments section below.


Jul 24 2017 at 12:48pm

Regarding possible explanations for why many people resist ideas like a (partial market for kidneys): I think people don’t like the idea of the “convertibility” of something as precious and “sacred” as a human body part (or even a human life) into potentially trivial objects. Putting a price tag on a kidney donation allows you to express the value of the donation into something silly like “a million pieces of bubble gum” or “2000 glasses of whiskey”.

This is related to Hayek’s comment in RtS that people only think of money as somewhat contemptible because in our common experience, we only pay attention to marginal, discretionary spending on relatively trivial things. The reality being that the most important transactions we engage in all the time are those where we trade our time and effort (perhaps the most precious goods), for the food and shelter necessary to sustain our lives.

Jul 24 2017 at 2:08pm

I think it would do people good to think about what their body is really worth to them. The donation industry wants you to think of your body as “priceless”. But people are suggestive, and if they saw what the market would actually bear for their kidney, maybe it would induce them to donate not because they want the money, but because they realize everything has a price, and maybe donation isn’t as big a deal as we’re made to think. One thing I dislike about blood donor centers is their stickers that proclaim how I “saved a life”. Actually, I took a break from work to walk across the street, lie down on a bed, get pricked in the arm, and eat some cookies. Instead of emphasizing how big a deal it is, maybe they could emphasize how big a deal it really isn’t. Paying people could go a long way toward doing that.

John Pinkerton
Jul 25 2017 at 3:37pm

What an opportunity the people have who influence national organ sharing policy. They could some day look back and say we used to have some 8,000 deaths a year and tens of thousands suffering with dialysis and life uncertainty on the waiting list, but we fixed that.

We honor soldiers for their service and we pay them, too. We could honor donors the same way.

Jul 26 2017 at 1:53pm

One argument I hear against a market for organ donations is that it would exploit poor people who might be a in a eu-voluntary situation. They may undervalue their kidney and trade it away to pay this month’s bills, for example.

The subtle assumption made here is that it would be as hard to get a kidney in a market system as it is now should the donor ever need a kidney donation in the future.

But, kidney donations are precious now, mainly because of the organ donation system that acts to restrict their supply.

What they don’t consider is that it would be easier to get a kidney under the new system. So, the poor wouldn’t be exploited.

Jul 26 2017 at 1:59pm

Well we know who the “Baptists” are at the National Kidney Foundation. They are just worried about exploitation or commodification.

But who are the “Bootleggers”? I wonder who donates money to them besides patients and friends/family? Maybe dialysis centers? They would have a lot to lose…

Russ Roberts
Jul 26 2017 at 2:33pm


My worry is that the National Kidney Foundation are the bootleggers. My suspicion is that they have a lot of power now and would lose it in a more decentralized system. So they are bootleggers who use baptist arguments. Anyone out there know the role of the NKF in the current situation?

Jul 27 2017 at 12:00am

I was doing some Calculating that may bring some more light to the situation in the US:

Everyday 98 people go onto the list.
Everyday 13 people die who were on the list.
That implies a 14% rate of death by list.

This also implies 31,500 transplants and 4,500 deaths.

I also found that Kidneys did not save as many life years as I had thought. My review looked like life expectancy on Dialysis was 4.5 years while life expectancy of a kidney was 8.5 years.

My observations is that kidney shortage is not huge. Market mechanism even weak ones could be able to close much of the gap in market supply.

Russ was joking about free future care, but I would think first inline to get a kidney if you previously donated and cost of all care for your Kidney related health would be important. This one inducement I think would be valued highly and not thought to be unethical.

There could be a fee to cover the risk of donors that could be covered by the recipients.

With the potential shortness of how long a transplanted kidney lasts, it appears many people are in need of multiple transplants. A transplant in general improves quality of life and extends life by 4 years. This is valuable, but a kidney transplant does not put people back on track of a person who never had kidney disease.

May be a kidney donation does not save a life. May be 3 donations is equivalent to not decreasing the life expectancy of 1 recipient compared to average person.

I am not sure what protection if any is warranted, but significant price could have large impacts on poor individuals access to Kidneys. Private Charity or other means to address poor should be a part of any market solution.

Jesse Kanter
Jul 27 2017 at 10:03am

Thanks for this podcast, I find it really interesting.

I actually had two ideas too share for the other side of the argument, though I think Ross and Sallly made a good case for open market.

1. I discussed this with my spouse who works in medicine and she pointed out that there is a reluctance in medicine to provide compensation and sometimes even just encouragement (like telling people giving blood is healthy) for organ and similar donation. The reason being that they have noticed when they do so, they get less healthy organs. She said that it is not worth the risk of more health problems to put a questionable kidney into a person who needs one.

I thought that was interesting, and I wonder if that could be solved in a free market by either proposing some rules about who can give based on something like demographic or any other factor we can determine is the source of bad kidneys. Or maybe that would work out on its own in that the people just wouldn’t buy from this group. The trouble may be that the “group” of people with possible worse kidneys maybe hard to identify.

2. Black market
I know this was touched on a bit in this talk, but I am still a little unsure of the big picture. Does not allowing compensation destroy the free market, but allow the black market, or does it destroy both?

My first thought would be that currently the black market would need not only black market donors, but also black market surgeons and hospitals, which I would imagine are less likely.

I think the answer to this is mainly, what kind of black market exist right now? I don’t know the answer to that, but it might help determine if we would be hindering or helping the black market by introducing a free one.

Jul 27 2017 at 2:48pm

The recipient paying for health insurance for life (or some percent of it) for the donor seems to me a way to get people to be more comfortable with the idea of compensation for giving up an organ.

Jul 28 2017 at 7:47am

While I do agree with the topic of finding ways to incentivize organ donation, I want to bring up a point that was not mentioned. That I suspect is something weighing on the NKF.

The prime responsibility of the physician evaluating a patient for organ donation is the safety and well being of the donor, not necessarily the quality of the kidney (Though these tend to go hand in hand). While those that get through the donation evaluation are felt to have a low risk of suffering from chronic kidney disease, there are no studies of these patients longer than 10-15 years (i.e. we don’t really know how donation will effect life expectancy). These studies show that a small number progress to end stage renal disease (i.e. in need of a transplant of their own or dialysis). The issue with monetarily incentives is that the physician will now have to make a choice between the health related risk of donation and it’s effect on life expectancy vs the benefit of financial gain.

Another way of thinking of this, which I think this would make for an interesting economic talk: how much is a year (or more) of life worth? And should doctors take financial benefit into account when making these evaluations?

Patrick Foran
Jul 31 2017 at 9:52am

Listening to the 27 July 2017 EconTalk I was struck by Sally Satel not understanding why the National Kidney Foundation strongly opposes organ donation incentives which have the potential to drastically reduce mortality from kidney disease. As EconTalk listeners know, financial incentives and social pressures matter. From what I’ve been able to surmise the NKF has taken a neutral stance towards current treatment options as a result of who they are funded by and who they work with.

Here is an example from NKF’s Brochure – CHOOSING A TREATMENT FOR KIDNEY FAILURE

“Many patients prefer a transplant over dialysis because it gives them more freedom, allows for a less restricted diet and may improve the quality and length of life.
A kidney transplant is a treatment, not a cure. A person with a kidney transplant still has kidney disease, and may need some of the other medicines they took before the transplant.”

While a transplant is obviously the best option for most patients, the NKF hedges with “may” and telling people that they will not be cured. Compare NKF’s wording to that of the National Kidney Registry:

“Dialysis vs. Transplant
People facing kidney failure who are medically qualified for transplant surgery have two basic options: stay on dialysis or get a transplant. Transplantation is far superior to long-term dialysis on all fronts. Transplant patients generally live twice as long as those who stay on dialysis and transplant patients are not restricted by the challenging routine of dialysis therapy. These factors and the quality of life improvements lead many people to seek transplants.”

I did not find any documentation that the two largest dialysis companies, that have 70% US market share, Fresenius and DaVita, are big donors to the NKF. The dialysis companies, or their employees, seem to be financial donors for events like Kidney Balls and Kidney Walks. The big national donors to NKF are pharmaceutical companies:

GOLD – Amgen, AstraZeneca, Exelixis, Horizon Pharma, Merck, Mallinckrodt Pharmaceuticals, Nephroceuticals, Novartis, Pfizer, Relypsa, and ZS Pharma
SILVER – Akebia Therapeutics, Bayer HealthCare, Bristol-Myers Squibb – Pfizer, ChemoCentryx, Eisai, GSK, Janssen Pharmaceuticals (Johnson and Johnson), and OPKO Health Renal Division
BRONZE – Aurinia Pharmaceuticals, Keryx Biopharmaceuticals, DiaMedica Therapeutics, and Elcelyx Therapeutics

The pharmaceutical companies are buying access to healthcare professionals.

NKF Expenses – Year ended March 31, 2016
Research – $1,292,033,3.7%
Public health education – $3,331,928, 9.7%
Professional education – $9,536,562, 27.6%
Patient services – $3,815,104, 11.1%
Community services and assistance to affiliates – $9,065,252, 26.3%
Fundraising – $3,440,819, 10.0%
Administrative – $4,014,475, 11.6%
Total Expenses – $34,496,173

Reviewing NKF Financials shows that disease research at 3.7% of the budget is a much lower priority than professional education 27.6%, and community services 26.3%.

The NKF works very closely with kidney care professionals. The NKF has four councils that function as professional membership organizations within the NKF framework: Council of Advanced Practitioners (CAP), Council of Nephrology Social Workers (CNSW), Council of Nephrology Nurses & Technicians (CNNT), and Council on Renal Nutrition (CRN). The leadership and membership of these councils are mostly dialysis center employees, as one would expect, most frequently, Fresenius and DaVita.

The importance and position of the NKF would be decreased by a drastically increased supply of transplants.

• They are currently the professional association hub for kidney healthcare professionals. There would be fewer dialysis clinics and people working in them.
• The NKF works with, meets with, and provides services for those working in dialysis centers. One would expect that due to the natural self-interest that these people would favor the current system.
• Kidney transplant services, including matching, are being done by organizations other than the NKF.
• The NKF is the altruistic outlet for all involved and concerned with kidney disease, it is the feel-good part of a terrible situation. A drastic reduction in the number of people on dialysis would look like a “cure” to many people, threatening the fund raising ability of the organization.

The NKF is an altruistic minded organization, likely full of nice, hard working people making less money than their private sector counterparts. They work with volunteers and donators who are sacrificing to fight kidney disease. The biggest NKF ‘heroes’ are those that raise/contribute a lot of money for NKF, people working in kidney healthcare, and those that donate a kidney. There is likely the typical non-profit mindset that profit is bad. It is an easy leap from that mindset to see incentives for organ donations as exploitative and turns future transplant donors from heroes into either mercenaries or victims.

That is how the National Kidney Foundation can feel that their opposition to organ donation incentives is the morally correct stance even though it increases the total costs and has worse outcomes for patients in quality of life and morbidity. The NKF is opposing what is best for those with kidney disease as it not aligned with the beliefs and interests of themselves and the people and organizations that they work with and for.

Shai Robkin
Jul 31 2017 at 11:00am

I listened to this podcast wearing two hats. I am a non-directed (altruistic) kidney donor and know from first hand experience what both donors and recipients go through. In that regard, I was incredibly surprised that no mention was made of the dialysis industry that does everything it can to discourage patients from taking the steps necessary to find a donor. The companies providing dialysis services are at the front lines in the battle against kidney transplants, regardless of how they are done.

My second hat is that of a behavioral economist. There are a number of different behavioral economics aspects to this. One is that by injecting a third party (the government) into the mix, you decrease the disgust that most people feel towards the idea of paying people for their organs (you can call it a tax credit but it’s a payment nonetheless). That’s the positive part. The negative is that I’m skeptical as to how effective her suggested program would be if there’s a long waiting time and if the payments are spread out over a period of time (present focus bias).

Aug 1 2017 at 8:39pm

I think that Ms. Satel’s concerns are valid but maybe overblown.

There should be one entity that has a function of ensuring that the funds are received and that all disbursements are made and documented. An escrow service perhaps. This could include obtaining a health insurance policy, perhaps limited in coverage to transplant related issues for a limited time which could be established by regulation.

Then there should be an entity that has the function of assembling the potential donors. Register them, evaluate their physical and legal fitness to donate, determine their blood type and antigen patterns, then put the donors onto an accessible forum so that potential recipients can find them. One could even see an entity that works with recipients and can auto-search the forum for potential matches.

How it will all work, I don’t know, but I think the process will help guard against the hasty, opportunistic, and unwise efforts to cash in.

I am sure such a system will be defined by how it is circumvented/fails which is kind of where policing by government has a role.

I don’t know. I think waiting up to a year and having to file a tax return to get a refund – possibly subject to garnishment for delinquent student loans, for example – might or might not generate enough donors, but I suppose that it would be better to try to incentivize donations if the net works out to be reasonably good.

Aug 3 2017 at 5:20pm

There are currently investigations as to whether ‘charitable’ giving by corporations were tied to ‘charitable’ subsidies for patient costs. There have been accusations that some charitable foundations have been more likely to provide charitable support to patients receiving care or medication from providers that in turn were donating the charity. Often, this support was covering only out of pocket expenses which is a fraction of the total cost. It’s a win-win for the medical provider and the charity. The charity gets a donation, the medical provider gets a patient whose revenue is primarily derived from private or medicare insurance.

Fresenius is listed as a corporate donor for the National Kidney Foundation. Davita is not but there are plenty of pages on Davita’s website encouraging donations to NKF and the company appears to sponsor many fund raising events. Fund raising events make up a material amount of annual contributions for NKF.

I’m sure the dialysis industry would be morally outraged at the prospect of people paying for kidneys.

A search for “Kidney Fund Investigation” will yield a dated NYT article on the subject.

The U.S. healthcare system as it stands today seems hopelessly broken too me. Too much money and vested interests to ever fix properly. It may ultimately collapse on itself but the outcome at that point would quite possibly be socialized medicine.

Aug 6 2017 at 2:47pm

If medical czar I would get government out of organ transplants as much as possible, particularly undirected live donation. Recipients would not take an organ at gunpoint and should not take the cost of the procedure at gunpoint. Use private un-mandated insurance or private resources. it would suddenly become cheaper.

There was not a quick QALY/DALY (quality adjusted life years) evaluation of organ transplants but I suspect it is high cost. The transplant investment could be used instead to prevent chronic kidney disease. Another use for the capital would be to pay something to those opting for no treatment(apparently half of the Australian pool of chronic kidney disease). Tough choices with no long term data. The half opting out of transplant and dialysis are likely medically different.

UK and Australia, a little less generous with medical care still do proportionally a lot of organ transplants, but have shorter waiting lists. Their committees approve the capital investment. At present we have economic surplus shared in bizarre ways so organ transplants may not be the lowest priority. The interviewee was certainly sympathetic.

My first two gallons of blood donation were paid at a then generous amount (priming the heart-lung machine prior to early morning surgery) while the last five gallons were unpaid. I would probably go in more often if there was an at-a-boy. The blood banks generally resist payment also(not for themselves).

Aug 7 2017 at 5:49am


I am firmly in the “no selling body parts” camp but perhaps I can give a better explanation than the straw horse you and Ms. Patel set up. Are there other alternatives than a market for organs?

For instance, how would organ availability change if we instituted Opt-Out vs. Opt-In policies? According to Wikipedia, Germany, which uses an opt-in system, has an organ donation consent rate of 12% among its population, while Austria, a country with a very similar culture and economic development, but which uses an opt-out system, has a consent rate of 99.98% That is a significant difference. Perhaps all the difference we need in a country like America where death comes at you from all sides.

How many organs are lost due to unavailability of transplant personnel and equipment at medical point of ex filtration? Could that be improved to increase available organs?

Why do you ignore the immediate impact on low-income recipients that organ markets will produce? Right now, you are on the list, you are on the list. Sure, politics, celebrity, and wealth can change your position, but organs are still within reach of most income brackets. Once your market is established, most every organ, live or dead, will come at a gradually increasing price. The poor will be effectively iced out of the organ transplant lists.

Who is going to pay for these organs? Do you recommend that insurance get in the organ bidding business? Or that policies that strictly prohibit free-market organs be put in place? Because once a market exists, few or no organs will be available for free. Immediately businesses will spring up packaging and reselling organs after death for a one time payment to living donators or surviving relatives.

Do you really not see the difference between selling human body parts and selling carburetors? Do you really not understand why every country except one has BANNED the sale? You deliberately ignore the potential for human slave body harvesting in the various countries (beyond that which already exists) the second you open the door for large, legal operators to get in the business. Prisoners, indigents, the invisible in totalitarian and failed states around the world will become the unwilling cattle for your gruesome trade. You must know this. If an unscrupulous businessman will work a child to death in an airless, overheated factory for the profit on a tee shirt, if a human trafficker will drown 30 immigrants off the stormy shores of Greece to avoid capture, if a shadowy organization will move girls (and boys) around the world as unwilling victims to the depredations of mankind’s worst impulses, what makes you think your solution will not instantly turn a vast number of unfortunates into flesh-factories for the moneyed class?

How is it possible that you, a Hayek enthusiast, has no respect for the fact the entire world (excepting Iran) has considered and rejected organ markets as a viable, and moral option? This is the ultimate market speaking…emergent order has occurred. We are not talking about a centralized governing agent forcing this decision upon the various peoples of the world. In fact, China, India, the Philippines, etc. have toyed with the idea of legalizing the trade only to reconsider and ban the practice. So the whole world is wrong about what is not strictly a financial issue? After all, there are significant moral, legal, religious, structural, and logistical issues with organ markets that you discount without addressing.

Of course, free-trade markets will open up organ availability…but to whom, and at what cost? How many forcible harvestings are the “acceptable”
number? How many children shivering in terror in overseas chop-shops to service first-world diseases are you willing to stomach? What do you plan to say to the public-assistance recipient no longer on the list? How long before Medicaid is priced out of the organ market and it becomes “life for the wealthy…a slow death for everyone else?” You speak as if it is only the Kidney foundation with a stake and a voice in this issue. Most are more likely to need a kidney than sell one. Perhaps they should have a say. And they have spoken. In every country save one, the answer was no!

Comments are closed.


EconTalk Extra, conversation starters for this podcast episode:

This week's guest:

This week's focus:

Additional ideas and people mentioned in this podcast episode:

A few more readings and background resources:

A few more EconTalk podcast episodes:



Podcast Episode Highlights

Intro. [Recording date: July 6, 2017.]

Russ Roberts: Sally Satel recently wrote an article with Alan Viard entitled "The Kindest (Tax) Cut: A Federal Tax Credit for Organ Donations," and that's going to be our topic for today.... So, you bring a special perspective to kidney donations. Talk about your personal story.

Sally Satel: Yeah. I got a kidney in 2006; and then I got another kidney a year ago, almost a year ago today. And, when I got my first one it was sort of a surprise. A lot of people who know that they're going to need a kidney--well, by definition, they know that they're going to need a kidney. What I meant is that they have certain illnesses--they are either diabetic, or they've got lupus, severe hypertension that's been poorly managed for a while, high blood pressure. People know they are at risk for this, for kidney failure. But my case was sort of a surprise. I just went to the doctor for a regular checkup. This is the part of the story that scares everyone, because I felt completely fine. And during a routine blood draw, found out that I had--well, that I had kidney failure. Which is rather easy to diagnose. It's a test called a creatinine level. But when you go for a regular blood draw, a routine blood draw, that's one of the indexes they measure. So, they tested it again, and that was the same. So, the clock was ticking for me, because I knew from my medical training that if you have kidney failure, you need a new kidney, or you will languish on dialysis for years. And no matter how long you are on dialysis, your life will be prematurely shortened. I mean, people have lived for 20 years, even a little longer, on dialysis. Some people tolerate it better than others. That's a process where your blood is cleansed of toxins about 3 times a week for about 4 hours at a time; you go to a clinic. Most people feel very debilitated by it. The average person on dialysis can't hold a job. But some do. And, some people--it isn't as psychologically devastating to some folks. But others find it so distressing, they are actually--suicide is not that unusual. So, the idea of being tethered to that machine, while, granted, it would keep me alive. Now, if my liver had failed and I didn't get a transplant, that would be it. So, kidney dialysis does keep people alive for awhile. But it just seemed like a really, really half a life. So, I knew I needed a kidney, but I didn't know exactly when I would need dialysis. So, as I said, the clock started ticking. And it turned out I had a good year before the function got to the point where I really was becoming physically debilitated. But it was very hard finding a donor. And that's what kind of galvanized me, this whole issue of the shortage. But, just in terms of finding a donor, as I say, it was extremely difficult. It's not like every day you ask people for a body part. And I didn't have--I have a very tiny family. And, to make a long story short, none of them--I didn't feel I could ask any of them. And in fact I never really asked anyone. I would do it all differently if, heaven forbid, there is yet a third time I have to go through this--see, I'm very nice to my interns. But I would just talk about it with folks and wasn't even being coy. I just sort of thought magically, 'Oh, well some people will think of being a donor, and it will work out.' But it became pretty clear that it wasn't working out. And a lot of people actually said they would do it; and I appreciate that in that I know they wanted to be--I know they felt empathy for my situation; but in the end, basically, a lot of them got cold feet and backed out. And then you're in this terribly awkward position, because you really can't be angry. I mean it's an enormous thing to ask, and it would be incredibly presumptuous to have the expectation that they owed you anything. So, I was really getting very demoralized and about to get ready to go on dialysis. And, Virginia Postrel, who I knew, not very well, had been at a cocktail reception somewhere--this was in November of 2005--and she ran into a mutual friend and asked that friend how I was. And the friend said, 'Not so hot. She needs a kidney.' And, Virginia went--I think the next went to her computer--I remember the subject line; I still have a printout of her email--it said, 'Serious Offer.' And she said, 'So-and-so told me you needed a kidney, and if I match, I will do it.' And I think she followed up a few minutes later with another email: 'I won't back out.' And, so, she went through with it. This was March of 2006. And I'm almost as grateful to Steve, her husband, as to her, because that was one of the reasons that two of my friends, other of my friends who had seriously considered donating did not go through with it--because their spouse basically said, 'It's the kidney or a divorce.' So, you kind of underestimate how important family buy-in is, in something like this. But, you know, God bless both of them. So she did it. And clearly I got a lot smarter. And Virginia did very well and she wrote some, I think very powerful articles about the importance of donating organs. And I suspect she influenced a few people. I know an article I wrote about the whole experience back in 2007--for about 2 years afterwards, I got emails from people. It was the most gratifying thing that's ever happened to me in my life: People saying, 'I read your article and I decided to donate to a stranger.' So I feel my work is done. Anyway, so that had a happy ending. Then I took on, in addition to my various interests, at AEI (American Enterprise Institute), I also took on the interest of how to expand the organ supply.


Russ Roberts: Virginia Postrel was a guest on EconTalk, and we talked about that. It is an incredible gift, kindness, an amazing thing. I want to talk about your second donor in a second. But first I want to stick with Virginia. And you are psychiatrist--so you are somewhat, at least, if not very self-aware of the emotional component to this. How did that, the receiving of that organ, affect you? You made a joke, 'I got a lot smarter.' I think that was an allusion to the fact that you have Virginia Postrel's kidney.

Sally Satel: Yes--

Russ Roberts: But how did it affect you psychologically? And how do you think it affected her? And have you and she talked about it?

Sally Satel: Oh, of course. You're certainly not the first person to ask me that. But I always find that a curious question. Some people have actually said, 'Do you still see Virginia?' My goodness! Yes, I see Virginia. And she's remained magnificent. You know, as she wrote about it, and as she acted the entire time--you know, we were planning to do this, because there's quite a bit of a workup medically, and to some extent psychologically for the donor--which is done by the medical center; and you know, and rightly so. So, she acted the whole time like, 'Well, let's just get this thing over.' And, in fact--and she's written about it. She said, her attitude--these are her words: I was 'very instrumental about it.' You know: 'I had something she needed, and I knew she had no one else to give it to her, and clearly, it truly was a life and death, or at least a quality-of-life-and-death solution'--I mean, 'situation.' And she did. And I mean, while, on the one hand of course I'm just speechless with gratitude--and I would actually, occasionally feel tearful in that first year, and a few years after with what I think of what she did for me. But, it was sort of [?]--I kind of shared her sense and hoped that I would feel the same way if the tables were turned and someone I knew needed one. But, you know, the sense of--I didn't feel--of course, I kid when I said my IQ went up: I could only wish. But, people do talk about--they kind of romanticize the whole process. I felt, and especially with hearts, as you can imagine--heart transplants--but they actually feel like a sort of piece of the person, almost spiritually, you know, inside them, or they feel a little change in their personality. And both of us were sort of, 'You know, I think, listen, we just exchanged organs'--or rather, she gave me one. And again, thank God. I wish I were wealthy: I would endow a wing wherever she wanted. But, I just feel like she's--of course, I mean a bond with her that I'm sure you don't feel with even your closest friend. It has a quality that's different and almost primitive in some way. But in a charming way.


Russ Roberts: But that kidney didn't work out completely.

Sally Satel: Yeah. It should have lasted about 15 to 20 years. Living kidneys last about 15 to 20 years. And ones you get from deceased people, cadaver kidneys, about 10 to 12. So, hers should have lasted longer. Also, because I wasn't on dialysis first. And that tends to also detract from the longevity of the kidney of like, a deceased or living kidney, if you've already been on dialysis for quite a while. So, I was an ideal candidate to have her kidney last, you know, quite a while. But, just make a long story short: I ended up getting pneumonia--possibly from the immunosuppressant--because you know you have to be on immunosuppressive drugs forever, so that your own immune system doesn't attack the new organ. But anyway, so I got a fairly serious pneumonia. So, then, it becomes very difficult, because in order to fight off the pneumonia, your immune system needs to be unleashed. But if it's unleashed, it's also going to attack the kidney. So it's a very delicate balance. Which I lost. Although, again, it was a gradual matter. It took about 3 years for Virginia's kidney to really, you know, for all the mileage, basically to run out. And so I knew about 2 years even before, it was probably going to fail completely, that I needed to start looking for another one.

Russ Roberts: So that's rather incredible; but I just have to ask a medical question first. So, your body, 8 or 9 years after getting this kidney--which looked something quite similar to your original kidney that you were born with. It's a kidney. It's not a repurposed Lego toy or a repurposed liver: It's a kidney. And 8 or 10 years later, your body still is angry at it and would reject it if you were not on immunosuppressant drugs?

Sally Satel: Oh, yeah.

Russ Roberts: That's so interesting to me. I didn't realize that.

Sally Satel: Oh, yes. That's true of all organs, and all transplants. And some organs are--some organs are--I think the word is 'immunogenic' than others. Which--kidneys are, bone marrow is, actually livers are--any organ will be rejected if there is no immunosuppression. But apparently people who have liver transplants need to take fewer--a smaller dose--of immunosuppressants. For some reason it's more resistant to rejection.

Russ Roberts: What's the rejection --what happens? What would have happened if you didn't take immunosuppression drugs, say, a few years after?

Sally Satel: Well, in two weeks, if you stop--if you stop taking immunosuppressant drugs completely, then within two weeks, 2-4 weeks, your organ just starts to fail. So, your complete metabolic milieu just goes out of balance. And if your kidney shuts down, basically--you don't, there's no way for fluid to leave your body. So, at its worst, you know, it would back up into your lungs and impede breathing. Although, by the time it gets to that part, you've been, such metabolic derangement[?] you are already somewhat delusional, or delirious, I should say. But, yeah, it happens. You know, people stop dialysis, for example, which is effectively the same thing: that's your external kidney, you could argue.

Russ Roberts: Right. Sure.

Sally Satel: And within about 2 weeks, if you have zero kidney function--some people always have a little residual kidney function--but if you truly have none, few people will last more than about a month. And that's called uremic poisoning--just a quaint term for it.

Russ Roberts: But you got a second kidney, from--this was a stranger?

Sally Satel: No. No. This is another earthbound saint. This woman is named Kim Hendrickson. And she was a kind of a witness to all this trauma during, before I met--well, as I said, I knew Virginia slightly, but before Virginia agreed to do this for me back in 2005. And Kim was a research assistant for Michael Greva [? Michael Greve?--Econlib Ed.]--I'm sure many folks probably know. He's a Constitutional lawyer who was a scholar who was at AEI at the time. And she was his assistant, and my friend. And she saw all this happening. And she thought: 'Wow, if you need another one, I'm keeping mine warm.' At the time, she couldn't do it because she was--just got married, wanted to have children; and understandably wanted to have her kids first, before she subjected herself to--it's a fairly small risk--but, you know, didn't want to complicate things for her future family. I understand completely. Also, at the time, she was--well, she still is--Blood Type B. And, at the time, you had to have the same Blood Type as your donor. But again, the science of immunology has made such progress that now you can get a kidney from a donor who doesn't even have your blood type. And, you do a little more preparation than last time. So, I had to go into the hospital a few days earlier, and then, what is called plasmapheresis: but basically they take out--they filter out some of the cells that would otherwise attack the new organ at the--right when it's introduced. And so, they were able to do that. And her kidney is working fine; and she did it; and that time around, the stress level was next to zero. Because, what made the experience of the transplant so difficult was not the surgery. You know, to tell you the truth, it's over. Right? I left the hospital in 5 days, 6 days. And I'm not that stoic, but actually all I needed was Tylenol. Not that it didn't hurt--but I mean--and then you recover. The scary parts are whether it's going to be rejected--in other words, whether your immune system will still overpower the efforts to suppress it; or whether you get an infection--because, again, you are immuno-suppressed, and they really do industrial strength immunosuppression at the time of the surgery. And that makes you very prone to infection--you are not supposed to go on a train or a crowded place or a plane for about 6 months. And I actually did get an infection and I had to go back, but only for 4 days; and the antibiotics were incredibly effective. And then I came home. And that was that. So, again, the difficult part, for me, was finding that donor; and Kim took that anxiety, just completely removed it. So, I'm so grateful.


Russ Roberts: Let's talk about the policy implications, or policy environment--which to review, which people have forgotten from our past episodes on this, which I'll put a link up to. So, let's say you were talking to me when you needed that second kidney and I'd said, 'You know, Sally, you are a nice person, but this is just a real hardship for me. But I'd do it $10,000.' Now, that's not a legal transaction, right? I cannot sell you my kidney. Can I give--I can donate a kidney to a stranger--and evidently I can donate a kidney to a particular stranger. So, there's a waiting list right now that's frighteningly long of people who are on dialysis who would like a kidney. They get one when someone just donates to the list. But Kim didn't donate to the list. She donated to you. Explain how that worked.

Sally Satel: Sure. So, among living donation--and then we'll get to deceased donation--but among living donation, which accounted for--I have the numbers here somewhere--but which accounted for a little under--well, there were 18,000 kidney transplants last year, and about 5600 of them came from living people. The remainder came from, obviously from deceased; but not 18,000-5600, because you can get more than one kidney--

Russ Roberts: 18,000, because you can get two from a--

Sally Satel: Yeah. In any case, a living donor either comes from a friend or a relative. And that's the typical scenario. There are some amazing souls, called good-Samaritan donors, who just listen to EconTalk and think, 'Wow, the shortage is just terrible.' Twelve people every day die because nobody is able to give them a kidney, or they could not survive the list--which now has 98,000 people on it. So, someone listens to this, goes to a GW (?) and says, 'I just want to be an anonymous kidney donor.' So, that's called Nondirected Donation. When someone gives to someone they know, a friend or a relative, that's Directed. Another form of Directed could be--and I don't imagine this happens very much, is, if I heard that your uncle needed a kidney, and I really just didn't want to deal with it--I just wanted to give him the kidney, and I could just literally go to the hospital and say, 'Please give my kidney to Russ's uncle.' But I think that's more common in the Deceased scenario, where your neighbor is on dialysis, and heaven forbid your kid is in a terrible accident and ultimately dies and you could say, 'Please give my son's kidney to Russ's uncle.' And, so that would be a Directed Deceased. But most Deceased kidneys, which come from people who are mainly brain dead, although there are some other mechanisms, but it's mainly brain dead individuals, those kidneys, right, go to the next person on the list, which pretty much is a first-come, first-serve as far as the kidney queue.

Russ Roberts: 98,000 people are on the list--

Sally Satel: Oh, Russ, it went down--

Russ Roberts: and 18,000 are available. So, that means there's 80,000 disappointed people who are going to have to wait till next year. And some of them of course don't make it. They die.


Russ Roberts: So, the first question--I'm sure someone's asked you this. It's not a comfortable question. I think it comes to mind. It's not my way of looking at the world; but there are people who look at the world this way. They would say, 'You had no right to two kidneys when there were 98,000 people on that list. You should have donated Kim's kidney--you should have asked Kim to give to the next person on that waiting list.' What's your response to that?

Sally Satel: If somebody said that to me, I would ask them--

Russ Roberts: Sally, I'm really glad you are here. Right?

Sally Satel: Thanks.

Russ Roberts: I don't know your work as well as I could or should. But, I'm glad you are alive. But it's an interesting question of, when there's a shortage like this, of who should get this precious thing. And--

Sally Satel: Yeah. Right. Right. Well, there are two answers to that. And I would truly ask the person who asked me that question: Why don't they consider donating? My other question to them is, would you please join our effort to change, frankly, the law--the ban--against rewarding people who would like to save someone's life? Let's be able to do that.

Russ Roberts: I mean, my view is: Kim is allowed to give her kidney to whoever she wants, and if it happens to be you, that's her choice. So, I have no problem with it. But I am sure there are many people who don't think she should have that choice, and who would resent or judge--that's the system for that aspect of it.

Sally Satel: Yeah. If they did though, the reality is, Kim would say, 'Well, tough. Now, I'm keeping it.'

Russ Roberts: Right.


Russ Roberts: The other question I had, and I don't know if you know about this, so you can certainly say you don't know. But, my understanding is that if you are a person of means and you don't want to wait on that list, you can go to certain countries in the world. We talked about--I think it's Iran--is it Iran that has--?

Sally Satel: Iran, but you couldn't go there. But, yes. This is a--

Russ Roberts: This is a separate issue. But a person could; or they could go somewhere else, where an Iranian kidney could be transferred to you, or it could be Turkey. Who knows where. But I would think that, given how valuable this is, you'd think it would be difficult to keep people from, stopping people from making the transaction. I guess the barrier is the medical system, because if I say to you--well, I don't know why. But let's say it this way. You come to me. I'm at the cocktail party. I hear you need a kidney. And I say to you, 'You know, Sally, I'd really like to give you a kidney, but it seems to me that it's a big pain--I was going to say in the neck--but a big pain in the side. I don't want to give it up. But, you know, if you made it worth my while, I think we could work something out.' And so, I quote, direct my kidney to you, but then you buy me a Ferrari six months afterwards--is anybody keeping an eye on that? I hope they're not; but--

Sally Satel: Nah. I don't think they are. And I'm sure this kind of thing goes on. And I would be happy to engage in that myself, if, you know, if that happened, and it was someone I could trust. Because you really do--it's uncomfortable. Well, let me back up. I didn't talk about, which is a website, kind of like a Jdate thing except it's Kdate--you are looking for someone to give you a kidney. And it's totally legal. You can go on it right now,, and it is, again, no money is exchanged; and there's a big warning sign that it's illegal to exchange any money. But that's a mechanism that I did try at first, before the guy backed out. And that's when Virginia came along. But that's relevant to what you just asked me, because there are people on that website who are looking for green cards--I mean, they are looking for something, in exchange. And, I've also gotten a lot of letters from people who say, 'I wish this was during the Recession.' I got so many letters from people saying, 'I wish I could sell my kidney, and get out of foreclosure'--or, one woman had ICU (Intensive Care Unit) bills to pay; another man lost his business. And every one of those letters--every person said, 'And I would be saving someone.' So, I grant you, even if they didn't have that, even if there wasn't that humane dimension to it, I still think it would be legitimate for people to be able to be rewarded for saving someone's life. But, the fact is that both the financial and the humanitarian dimensions intermingle. All the people who wrote to me--it was really kind of moving, and you wish they could have been able to do that.

Russ Roberts: Yeah. I often emphasize--I think it's a really important point--that money certainly motivates people; it's not the only thing that motivates people. There are many, many, many intrinsic rewards that we receive, or punishments for the things that we do. And financial incentives, both positive and negative are not the only things that motivate us. They can motivate us, though. And they can certainly co-exist with those other motives. So, certainly if I sold you a kidney for $25,000, or a new car, or whatever it was, I hope I'd still also, in addition to that, the satisfaction of knowing that a person whose health was impaired was now healthy and had a better chance of living a good and healthy life. So, I think that's a really important point. So, I have--in theory; maybe we'll get to this in a little bit--but I have in theory no problem with a market for kidneys where people buy and sell. I assume they would also get the satisfaction from helping people, not just the money. I don't see any reason why those things are exclusive, and I think it's a terrible mistake to think that they are.


Russ Roberts: Now let's move to your proposal. You have suggested in this article that the Federal government incentivize kidney donors with a tax credit. So, explain how that might work.

Sally Satel: A tax credit would just be one option. And I'll locate it in a larger context, and then I'll tell you what our plan was. But, the general idea--and, I think people have been talking about this since--I once found a paper from 1968. The first kidney transplant was in 1953. And soon, within a decade, people already realized that there was going to be a shortage, even though we officially didn't set up The List until 1984 in this country. But the idea is--well, think about, I guess, first, what you don't want to happen. You don't want someone to rush into this kind of thing and then regret it. Now, maybe you are going to say, 'Well, that happens all the time in human transactions.' And that's probably true. But in this case, if you were to design an ideal system--this is a transaction, kind of unlike other things. There are some analogies and we could talk about that. But, it's a momentous kind of engagement for a person to donate. So, you want to make sure they are not rushing into something that they regret. And so, this is why a free market, a classic free market, is not something that has ever seriously been considered, in terms of proposals. So, the general idea is that, there is a third party--and it could be the government; it could be a government-appointed charity; or even this could be at the state level--that is the provider of the benefit. And the benefit is not immediate cash. Because, again, you want to prevent a scenario where a desperately poor person is rushing to do this and then going to regret it. So, you don't offer what desperately poor people want, which is immediate cash. So, the kinds of rewards that people have talked about are [?] tax credits; or, a contribution to someone's 401k; loan forgiveness; or they could, for example, forward the benefit to a charity of their choice. But you get the idea. And, as I said, a third party would administer this. And there would probably be a waiting period built in, about 6 months to a year, again, for a cooling-off kind of aspect to it. And, the funding for this could come from dialysis, which is--payments for dialysis from Medicare, which is the largest payer of dialysis are 7%--seven percent--of the entire Medicare budget. So, it's about $90,000 a year for each person. So that could easily underwrite the value of the benefit. Which most people have pegged around $50,000, but it's just really almost an intuitive amount. So, the tax credit, if that were the route that was taken--it would be a refundable tax credit; so, people who didn't pay tax at all would be able to benefit. And they would get $5000 a year, either as a refunded benefit or off your taxes if you paid taxes. But that wouldn't kick in--we put in a lot of protections, and it's quite paternalistic--but it wouldn't kick in for a year. And then, again, it would be $5000 a year. And if it were refundable, it would be $5000 a year for 10 years. And if it were, if a person were paying taxes, I think we said they could have the $25,000 after 5 years. But the idea is to, again, dampen the magnitude of the incentive. And I can tell you why we are twisting ourselves in a pretzel to do this kind of thing. The answer, very quickly, is because of the intense opposition to this idea that has been mounted by much of the transplant community. Although, to the credit of the transplant surgeons, they are more receptive to it, and have become more receptive to it over the years.

Russ Roberts: I think they would be. They have a financial incentive. I want to interrupt, because I find it utterly fascinating. Obviously, there's a pragmatic aspect to what you are proposing, which I respect; I have no problem with it. I don't agree with the outlines of it, though. And I just want to make the case against it, and you can either say, 'Well, it's pragmatic,' or you can disagree with me, whatever you want. It's remarkable to me--first of all, of course, the doctor--the surgeon--is not expected to do this life-saving surgery, life-transforming surgery as a charitable act. No one says to the surgeon, 'We'll give you a $50,000 tax credit for every one of these you do,' or a $5000--whatever it is. We're not--I don't want you to get paid for it, of course, because that would be immoral and it might make you think that the human body is like, oh, I don't know, a slag mine, some kind of coal mine. So, we're not going to pay you directly, and we're not going to pay you right away, because I want you to do it for the good of the patient. So, obviously, the surgeon is somehow managed to live a decent life and survive being paid directly a full, semi-market--it's not a market amount, of course, because it's all messed up--but they get cash. They get what's called cash. And yet, you are going to make a poor person who wants to transform the life of their child, for example, wait 5 years to get their money. You are going to make them wait--

Sally Satel: Well, it's [?] a year, but--

Russ Roberts: No, but they are only going to get $5000 the first year.

Sally Satel: Oh, okay. All of it.

Russ Roberts: Yeah. To get all of it is going to be over a few years. And then, the idea that they might want to help their kid now: 'Too bad. We're going to make you wait 6 months so you can be sure you are not going to regret it.' Um, I find it interesting that--of course, I'm a messed up person; I'm an economist--but I find it interesting that anyone would object to this. So, the people--I'm fascinated--

Sally Satel: Welcome to [?]

Russ Roberts: What? Oh: Welcome to your world. So, who would--I mean, I think there are different ways to think about it. If you did a survey and said, 'Are you in favor of letting people buy and sell their kidneys?' I think the number would be 98% to 2% against. But if you said, 'If a poor person is really desperate and they can save someone's life, should they be allowed to sell their kidney and thereby get their child a college education?' I think the number would be very different than 98-to-2. And I'm curious how politically you think that works out. Why is it--a better way to say it: Is there a vested interest here that I'm not thinking about yet, when I work on it, who would be harmed by this? I mean, that the people who run the list, they are very important now, and they get a lot of attention, and they have a purpose in life that might be hurt by the fact that this market would work better if we had these incentives even though they are roundabout. Who would be against this? Who is against this?

Sally Satel: Well, start with the National Kidney Foundation. They have been the most vociferous opponent. And they actually did actively try to sabotage--I know I'm not supposed to talk about specific legislation, but efforts, years ago, that were made to try to rethink the National Organ Transplant Act, which is the legislation that forbids any kind of exchange. But--

Russ Roberts: Why are they against it? Why would the National Kidney Foundation, which is supposedly in favor of people being helped who are struggling with kidney issues--why wouldn't they be thrilled that, say, I don't know, 75,000 would get kidneys than now?

Sally Satel: Well, I'm baffled, as well. But I can tell you what they say.

Russ Roberts: Yeah: what do they say?

Sally Satel: Well, they say a few things. They start using the language of 'commodification'--in other words, you are treating people like spare fenders in a junk yard. They are afraid you are--'it will taint the process,' I've heard. It will devalue human life. It will--and then they say something that's actually something one could measure, because it's an empirical matter--that it will crowd out altruistic giving. And, worse, that it will just crowd out giving in general. But that's testable. I've actually looked into--go ahead.


Russ Roberts: That's possible. Right? I was going to say that--it's possible that if you don't--and this is an argument made for blood donation, as well: If you are not going to get the moral satisfaction of helping someone, and now it becomes something you can just buy and sell, you won't donate, because it's tawdry. Which just means that, as an economist, it just means you better set the price a little higher than you thought you might have needed to, to overcome--you might lose the, what is it, the 5000 people who donate right now, willingly, out of an incredible human kindness? And so, now you are going to get as many people as you want to donate out of mercenary motives. And--

Sally Satel: Exactly. Exactly. I see your point exactly.

Russ Roberts: I know you do.

Sally Satel: To the extent that anyone would be dissuaded, I would, as a psychiatrist, say, 'Well, gee, are we talking about altruism or narcissism? What was really motivating you--was social signaling motivating you?' But in any case, maybe it was. And then we know that is powerful for some people. But, well, okay, then I'm sorry that you won't be able to save someone. But here are 10 other people in line who would love to do it. So, that gets into the question of motivation, which is also held very dearly by the National Kidney Foundation, other opponents, which is: it has to be done for the right reasons. But this is what we hear from the National Kidney Foundation, what you hear from some particularly vocal transplant surgeons and nephrologists. Although, as I said, as a group, the transplant surgeons are--they did a poll of their organization in 2009, and the vast majority, 75%, were in favor of at least testing this idea. So, I do give them credit. But I have to tell you, I've looked at all the polls that have been done on this. And, the public is much more open-minded than the experts. And then we bring in the bio-ethicists--

Russ Roberts: Well, that's because the public--there are many of us who have relatives who have kidney problems. We want to help them. I just have to go back to the National Kidney Foundation for a second. I don't know anyone in the National Kidney Foundation. I know nothing about the NKF (National Kidney Foundation) or whatever it's called. But, it's not like a, um, it's not like the AARP (American Association of Retired Persons), the American Association of retired people which has millions of members. The National Kidney Foundation is a nonprofit--I assume. Its headquarters, I assume, are in Washington, D.C. Correct me if I'm wrong.

Sally Satel: No, I think they are.

Russ Roberts: And they have some number of people in that building in Washington, D.C.--maybe 100. I doubt they have a thousand. What does it mean to say they are against it? Why do they matter? And, politically, why does anyone care what the National Kidney Foundation thinks?

Sally Satel: Yeah, they matter a lot. To my deep chagrin. Because they are the first organization that Congress, Congressional offices think of. They always say, 'Well, what does the NKF think?' It's kind of like a cancer issue: What does the NCI (National Cancer Institute), what does the American Cancer Society think they have? They have disproportionate influence. And they have a PAC (Political Action Committee) as well. But it is unfortunate--

Russ Roberts: Who would donate money to that PAC?

Sally Satel: Oh, anyone who is--see people who get, people who, people who have gotten deceased kidneys, and people who--they actually have--

Russ Roberts: I get it. It's okay. I get it. Obviously there's some sense of gratitude there, because they are the coordinators of the list, and they make a donation, or whatever. But I'm not giving them another penny until they change their view on monetary incentives. And I don't give them a penny now, so it's not much of a threat. But, it's a fascinating issue.


Russ Roberts: Let's take one of their arguments more seriously--we're picking on them, and of course it's not of course just them. They are not alone. It's not like they are the only people against this. There are a lot of people who are troubled or uneasy about monetary incentives. And I understand that. Would it--let's take the commodification idea seriously. Is there something immoral--or, we have taboos about it--but if we think about it rationally a little bit, is there something immoral about sharing a body part for money? I mean, that's really what it comes down to. What I think is fascinating--and the reason I bring up the surgeon thing--it wasn't my idea, forget who wrote about it first where I read it, but--it's fascinating: That's not commodification, that the surgeon's hands are used to make money to rip out somebody's kidney and shove it into somebody else's body. We don't consider that person somehow morally troubled. And yet, somehow--and they make money, real cash. And yet, somehow, if we are to do it, who don't have their--what, high priest status? I don't know what's the--I mean, I'm in an ornery mood, hearing your plight. It's just interesting that this idea--'commodification' is an interesting word, right? It sounds awful. I don't know really what it means when I push it.

Sally Satel: Well, it's one of the three words that are used to, frankly--I don't want to sound melodramatic but [?] folks like me, and I'm not the only one, heaven knows--Richard Epstein, a lot of us, Virginia, are vocal about changing the law. But commodification, exploitation, and coercion are the holy trinity that's supposed to end the discussion. But, you are exactly right. The one person who takes the risk and gives the thing of value gets nothing. Commodification, from what I can--becomes pretty clear from people who brandish that word in a menacing way. What they really are concerned about is having respect for the donor, and treating him or her well. And of course, that is essential. That is the basis of an ethically sound system. In fact, I would say there are at least four elements. One is respect for the person's capacity to make a decision about something that might be in his own best interest. Then of course, informed consent. These are all the things that are not, of course, in a black market. Yet, folks who have debated the others say, 'Well, if we do this here we'll have a black market.' You want to say, 'What?' We have a black market. Frankly, we have a thriving global black market in organs--because we don't have a transparent system. But, anyway: Respect for the person's autonomy, informed consent; protecting their help--which of course doesn't happen in a black market at all. And in fact, even in our current system, if you don't have health insurance and you have a complication a few months after you've donated--granted, probably most hospitals will help you out. But they don't have to. In fact, in our plan there would be health insurance for at least two years, so that if there were complications, a person would be guaranteed to be taken care of.

Russ Roberts: You know what that reminds me of? It reminds of--I think if you are in the Baseball Hall of Fame, you get a lifetime pass to any park in America. It kind of should be. This is not a serious comment. But there is something emotionally satisfying about the idea that if you have crossed into a hospital to voluntarily help save a life with one of your organs, you should be able to walk into a hospital for the rest of your life and say, 'I need this. Give it to me,' and they should just say--

Sally Satel: At least a gift shop--

Russ Roberts: Yeah. And they should just say, 'Yeah, you are one of those? You're in. It's all taken care of. It's free. Here's your free pass.' But that's a little extreme.

Sally Satel: Well, I was just going through my internal list, the conditions that need to be satisfied to allay the fact that someone is not being respected. So, you reward them amply. Obviously, if you gave them a buck, now that would be exploitation. But you reward them in a generous way. Gratitude is expressed. And that's really all that needs to happen. And none of it happens in a black market, of course. But it can easily happen here. And it happens already, except there's no money attached to it. But in this case, there would be a reward for people who would like, again, to benefit while they save someone's life.


Russ Roberts: You spoke loosely a minute ago--you said the one person who doesn't get anything out of it is the donor. But, of course, the donor does get the emotional satisfaction--

Sally Satel: Oh, definitely.

Russ Roberts: which is enormous. I know you meant that. It just was a figure of speech.

Sally Satel: Thank you.

Russ Roberts: But, it's an interesting question: I'm now going to take the critics of our perspective a little more seriously. Interesting question: Let's suppose, just hypothetically, that the market price--whether we're a literal market, which I understand, I agree is unlikely; no one proposes seriously except maybe me, and three other people. But let's say we went to some system where we allowed this sort of arm's length, third party compensation via the tax system or something else, that you'd like to encourage. And let's say that number got to be a million dollars. Okay? That's what it took. And someone, maybe a foundation steps forward and says, 'I don't just want to save the 98,000 people on the list. I want to save the x-hundred thousand, 500,000, whatever it is, who are at risk. And rather than wait till they go on dialysis, they should just get a new kidney. And I'm going to pick a large enough number, compensating them, that the donors, enough will step forward.' And that turns out to be worth a million dollars. Now, I'm going to say something really tacky here, which is--but it's mildly amusing for EconTalk listeners. Somebody who has been listening to EconTalk since 2010 has heard about Bitcoin. And I have a friend who mocks me because I knew about Bitcoin in 2010 and missed the boat. Of course, he wasn't an EconTalk listener then, so he missed the boat, too. So, it's kind of a mutual make-fun-of-each-other thing. But it would be an interesting thing to think about--you have two people in your life who did something unbelievably generous--what this system that you are encouraging would do would put a monetary value in some dimension on their kindness. And it also in a way would suggest what they gave up to give you a kidney. That, it's one thing to say, 'Well, they risked their life'--which they did. It's one thing to say that they went through surgery, which is painful and scary, which they did. They also had recovery that they endured, which they did. And now you are telling them, 'And by the way, you could have made a million dollars. You gave away that precious thing.' Now, my view on that is: That makes it even sweeter to them, that they did something--in a way, it enhances their generosity. But perhaps some people would say it creates bitterness; it takes the emotion out of it. I don't know. What are your thoughts on that?

Sally Satel: You know, Russ, I'm sorry, but I actually think I missed the offer that people would--did you say they would be offered a million dollars if they'd give a kidney?

Russ Roberts: No: I'm saying: Suppose after the system and you and I--you and I would like a different system than the current system, which relies only on altruism.

Sally Satel: Right.

Russ Roberts: And let's suppose that, either because there's a free market in kidneys or because some kind of encouragement step comes forward in the form of a tax credit or payment of house mode or whatever it is, by a third party, whether it's the government through the tax system or a foundation. And it turns out that that price gets set not at $50,000, but at a million.

Sally Satel: [?]

Russ Roberts: So, that tells Virginia and Kim, your two angels, that they did something--that they gave up an enormous sum of money, and gave you something. Does it change their feeling about it? Would it change the level of gratitude, would you feel? It's just that it adds something to it. We have to be fair to the "commodification" people. It puts a price tag on something that right now is unpriced.

Sally Satel: Well, I guess we have to realize that--there are things--I guess we have some models for it, where, you know, there may be a law passed that now you can take a huge tax credit for something that you couldn't have before. And then there's some regret. I think there's always regret built into any kind of transaction, that conditions can change. But I'll tell you--there's just so much latitude that you can have; and now I have to be relentlessly practical on this issue. Which is: The MDs [Medical Doctors] are always the intermediary. And they won't do--right now, we can't even frankly make enough headway to get them to even, as a group, seriously consider this. To even study this, to be honest. But let's say the price went up to a million. They would talk about--this is where they would talk about undue inducement. In other words, an offer that's too good to refuse. And I'm telling you, an IRB [Institutional Review Board] would never get the same--would never go past--

Russ Roberts: Explain. What's an IRB?

Sally Satel: Oh, Institutional Review Board. I mean, it would be considered just unethical. And they would never do it.


Russ Roberts: You know what this reminds me of? It reminds me of Nick Saban. Nick Saban is the coach of the Alabama football team. He is part of a cartel called the National Collegiate Athletic Association, that makes it illegal to pay athletes who perform at the University of Alabama anything other than tuition. The market value of those athletes, a handful of them, is tens, a hundred of thousands, maybe millions of dollars for the amount of money that they generate for the University of Alabama and other similar football programs. And it is considered demeaning to them that they would be paid for their toil in the trenches of the football stadium. But, somehow, Nick Saban can make millions of dollars a year. And he will tell you, with a straight face--and I've heard other coaches--I've never heard Nick say this, but other coaches say this: 'It wouldn't be good for the educational aspects of football in the university system for those athletes to be paid.' But somehow it's okay for the coaches to make millions of dollars off the free labor of these people. So, these surgeons and doctors, who you are defending right now, they make hundreds of thousands, and sometimes millions of dollars transplanting kidneys that--the few that are available. And would be offended if somehow people made as much money as they did. Doesn't sound so good.

Sally Satel: Oh, actually, well, for what it's worth--they are actually not offended[?]--they don't begrudge I think any of these people making money. I'm sure if their stocks, you know, split 7 times they'd be thrilled for their patients. But, yeah. A lot of them--you are right--do find this troubling. But again, I have to shout out to all the surgeons I have been working with over the years, and all the ones that have come around to at least testing this. But, unfortunately, their organization, the American Society of Transplant Surgeons, will not officially make a statement that we should study this. But, you know, I mean one thing that comes up--and if you don't want to go in this direction you don't have to--but, is--you know, the language that's used in these debates--and I almost put debates in quotes because some of the moral reasoning is so shoddy. But, as I said before, you hear words like 'exploit'--you hear words that no one ever defines. Well, like 'commodification' is one of them.

Russ Roberts: They are scary words--

Sally Satel: and [?]. Yeah. Arguably the doctor is right, who do the surgery, who have commodified their service. And the procurement service--which is performed by OPOs--Organ Procurement Organizations--are paid by, I believe Medicare and Medicaid. Or they are paid from the Federal government--it could be through the United Network for Organ Sharing. But in any case, it's $50,000 to take an organ and transfer it, you know, from a deceased person in an Emergency Room to a operating room somewhere else. So, there's a lot money floating around. But, exploitation, for example, is a word you will hear. And, that makes sense in the black market, where these poor folks are offered a pittance. Now, granted, even in their world, $2000 means, could mean, a hell of a lot. But they don't get that $2000. It's rare that they get what they're promised. There are no contracts, of course, they can't go on, informed consent. Those people are exploited. Then you year about coercion. And that is a word--in fact, Alan Wertheimer was a wonderful philosopher, I believe political philosopher. Unfortunately, he passed away recently. But he actually did a survey of bio-ethicists and asked them about the definitions of words like 'coercion,' 'exploitation.' And actually, most of them got 'coercion' wrong. It means two things. Basically, I kidnap you--you know, in the most physical sense: I have imposed my physical will on you; I'm not going to let you leave my house. I kidnapped you, whatever. You strong-arm someone in the most literal sense. Or, you present a choice where either option leaves you worse off. Like, 'Your money or your life.' If I am given the opportunity to sell my kidney, that's not coercion. Because, if I don't do it, I'm not any worse off. Yet, that's a word they frequently use. And, what they really mean undue inducement. As opposed to inducement. Inducement is when we are walking down the street and we see an ad, a big ad in Saks [Saks Fifth Avenue, NYC-area store] that says '50% Off.' You know, it's something you wouldn't have done ordinarily. You wouldn't have shopped at Saks ordinarily. Well, maybe you would. But sadly, I don't.

Russ Roberts: Yeah, I don't.

Sally Satel: But if there's a good sale, I'll really think about it. I'll do something I might not have otherwise done. But that's--you know, that's just an inducement. It becomes an undue inducement--and this is where the too-good-to-refuse dimension comes in--when the temptation is so strong that it actually interferes with my capacity to rationally weigh the costs and benefits.

Russ Roberts: Of course, that's very hard to measure. We had an episode with Mike Munger on what he calls 'Euvoluntary Exchange,' which relates to some of these issues. I encourage people to listen to that.


Russ Roberts: We're almost out of time. You have a very brief speculation in your paper about the future of organ transplants. There is some encouraging news on the horizon. Talk about that: even if none of these changes that you and I think I are in favor of, even if they don't happen.

Sally Satel: Yeah. I think, when you have your EconTalk in 25-30 years with, you know, some genius Materials Scientist, he can tell you all about the synthetic organs. I think there's no question that our, your grandkids are going think it was primitive that we had to take organs from actual people. We'll probably either be printing organs--which means that you would have a cartilaginous infrastructure or skeleton of any of the organs. And, the heart is the most easy to envision. Actually, if you take the cells, you can wash the cells--obviously, it's a complicated process--but you can actually take the cells off a heart. And then you are left with kind of a skeleton underneath. It's not bone. It's cartilege. And then, you could use the patient's own stem cells to seed it. And cells know where to go. It's quite, they're quite brilliant. We already do that with hollow organs like bladders and tracheas. But, we'll get to the point--I have no question we'll be able to do it for the more complex organs: hearts, livers. Kidneys may be one of the toughest. Their architecture is very complicated. Or, what's called transgenic pigs, where, their kidney is, or their immune systems are manipulated in such a way that the kidney of that pig could be transplanted into a person and not rejected--or not even transmit, really the hardest puzzle has been to protect against transmitted viruses that are endemic to certain animal species. Maybe microdialysis machines? Right now, a dialysis machine looks like a washing machine. But there's no reason--and they already have smaller versions of them. But I'm sure they'll be able to, with micro-technology, I could imagine an implantable kidney that works like a dialysis machine as opposed to being an organ replica. So, I have no question that this problem will be solved in the next few decades. But it's a lot of death until then. It's about 7-8000 people a year who die because they couldn't survive the wait for any organ.

More EconTalk Episodes