Whimsley

Economists and Sociologists on Organs

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Kieran Healy, Last Best Gifts, University of Chicago Press, 2006.

Gary Becker and Julio Elias, Introducing Incentives in the Market for Live and Cadaveric Organ Donation, (working paper).

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The distinguished theoretical chemist John Murrell wrote that physicists like to solve simple models exactly, while chemists like to solve detailed models approximately. There are benefits to both approaches. Take the study of solid state electronic and magnetic properties, where the early work of physicists was to compute, using very sophisticated techniques, the properties of highly simplified models such as a free-electron gas with a uniform background of positive charge. Chemists, on the other hand, were busy studying complex materials with intricate structures, but didn't have the theory to do more than classify the kind of observations they made. As a result, physicists gave theories for superconductivity and other exotic phenomena, but because their theories had so little information about the specifics of molecular structure they couldn't predict the kind of material where superconductivity would be found. The discovery of high-temperature superconductors in the 1980's had physicists as well as chemists scratching their heads. The empiricism of chemistry (where theorists form about 10% of the population) compared to physics (where the number is, I think, more like 30%) forces theoretical chemists to deal with the messy and specific problems that their discipline's vast body of observation and experiment demands.

Economists are to sociologists as physicists are to chemists. Whenever you see a discussion of scientific method and rigour in the social sciences, the comparison is always made to physics. This is not surprising, because physics remains the archetypal science, but it's a bad thing because the social sciences -- like chemistry -- have to stay grounded in the empirical side of what they study. The details of any particular problem are so often crucial to the outcome that you can't use "the light touch of the physicist" and expect to come out with predictions. It's all very well to talk in the abstract of markets, but when reality hits it's the details that often matter. Sociologists spend their lives looking at those details, like chemists they tease out conclusions from the structure and dynamics of particular circumstances and events. And like chemists, they get less respect than their more formal, more model-driven, and less empirical siblings.

These different proclivities are on show when sociologist Kieran Healy looks at blood and organ donation in his new book Last Best Gifts and when economists Gary Becker and Julio Elias look at organ donations in their widely discussed working paper, and my ex-chemist self is glad to say that Healy comes out looking better.

The basic problem is simple. Advances in surgery and in immuno-suppressing drugs have made organ transplants safer and cheaper since the 1980's. The number of organ donors (whether live or dead) has grown, but not nearly enough to keep up with the demand, and the result is a growing shortage of organs. People who could be saved are dying while waiting for "donor" organs. What can be done?

Becker takes, as anyone who has read any of his writings would expect, a forthright and straightforward approach. Shortages mean that supply and demand don't match. As he says in a blog essay  on this issue:

To an economist, the major reason for the imbalance between demand and supply of organs is that the United States and practically all other countries forbid the purchase and sale of organs. This means that under present laws, people give their organs to be used after they die, or with kidneys and livers also while they are alive, only out of altruism and similar motives. In fact, practically all transplants of kidneys and livers with live donors are from one family member to another member. With live liver transplants, only a portion of the liver of a donor is use, and this grows over time in the donee, while the remaining portion regenerates over time in the donor.

If laws were changed so that organs could be purchased and sold, some people would give not out of altruism, but for the financial gain. The result would be an increased supply of organs. In a free market, the prices of organs for transplants would settle at the levels that would eliminate the excess demand for each type of organ.

You make supply match demand by introducing a market -- paying people for their organs (eg, kidneys) or for the organs of their family members after death -- because that's what markets do. So he and Elias do some rough calculations on what would be needed ($32,000 per liver, while the current cost of a liver transplant is $175,000), and say "let's do it". Becker is under no illusion that this proposal will be adopted soon, but believes that there is a real chance that it may be taken increasingly seriously over the coming years, and serious discussions are increasingly (so I'm told) including markets as possibilities, as in a recent issue of Kidney International.

There are no details in Becker and Elias's sketch of the form that the market would take. Of course, Becker is aware of many of the arguments against markets (many coming from Richard Titmuss's influential 1971 book The Gift Relationship) and returns to them in his later blog posting to address them: that "commodification" of body parts is immoral; that payment may drive out altruistic donations and so not yield the bumper crop he predicts; that organs may be removed mainly from the poor and installed mainly in the rich; that organs may be removed forcefully from people (as Falun Gong supporters are claiming is happening in China now) in order to be sold; that people may regret an impulsive and irreversible decision to sell; that payment may lead to people lying about their medical health and so lead to infected organs entering the system. He doesn't so much argue these issues as dismiss them. Tellingly, he uses the passive voice: the quality of blood "can be maintained at a high level", the source of organs "could be determined in most cases without great difficulty"; the number of impulsive donors "could be sharply reduced by having a month or longer cooling off waiting period". It isn't quite clear who has the incentive to maintain all these standards, or carry out these checks, or how much it would cost to persuade someone to do so. And yet in markets for experience goods (and organs, surely, are experience goods of a visceral kind) information issues are at the heart of the problem. The cavalier brushing aside of issues of trust, fair dealing, and asymmetric information makes Becker's case unconvincing to this reader.

Becker also commits what Tyler Cowen of Marginal Revolution calls the libertarian vice: assuming that the quality of government is fixed. In this case, that means assuming that if altruism isn't working now, then it won't work in the future. "If altruism were sufficiently powerful, the supply of organs would be large enough to satisfy demand, and there would be no need to change the present system. But this is not the case..."

Kieran Healy spends most of Last Best Gifts exploring the very things that Becker skates over so casually, and argues that they are the heart of the matter. Altruism is not a fixed quantity, but depends crucially on "the cultural contexts and organizational mechanisms that provide people with reasons and opportunities to give" (p2). Those unspecified actors who are the passive voices of Becker's arguments are, Healy argues, the key to success or failure when it comes to blood and organ donation. For example, organ donation from the newly dead is, in practice, dependent on approval from the relatives and the rate of approval depends in turn, it turns out, on who asks them. If the person who is helping them come to turns with the death is the one who asks them to approve donation of the organs, they are more likely to refuse than if somebody else (even from the same organization) asks them. Establishing protocols and practices, managing logistics, establishing trust -- all these matter. It is, Healy is arguing, not useful to talk about the issue or organ transplants without addressing the specifics of questions such as whether relatives of dead organ donors have the right to meet the recipient (as justone example), because these are the kind of decisions that can have big consequences.

The book is academically written, with all the costs and benefits that implies. It was originally a PhD thesis, so unsurprisingly it favours logic and cautious language over passion, footnotes everything, and tends to wrap conclusions in qualifiers. The empirical middle chapters in particular (3 and 4) are a bit dry. But the book is an important contribution; it identifies a whole range of important issues when it comes to organ donation, and may move the debate away from the market/altruism dichotomy to a more nuanced and realistic debate over coping with large-scale enterprises. That would be valuable. I definitely recommend it if you want to learn about the issues involved, and want some ideas for healthy ways forward.

(A minor quibble before moving on. He discusses the US and a bunch of European countries, but not Canada. This is common in American/European comparisons -- The Economist seems prone to it -- but it is still irritating to this Anglo-Canadian reader.)

Healy looks at both the blood system and the organ system, and his analysis of the failure of the blood system in the US and in Europe to handle HIV and Hepatitis C infection makes his reality-based approach uncomfortable reading for market enthusiasts and market sceptics alike. In some cases, the market-based blood plasma system in the US did better than the donation-based mainstream blood system in responding to the potential for infection, even as both sets of organizations had the same information at the same time. That they too failed at the hurdle of throwing out blood plasma that was already taken is no comfort. In fact, one of the more interesting conclusions that Healy seems to come to is that there may be dependencies among the different parts of the system (the collection agency, the donors, the recipients, the hospitals) that are more important than the presence of absence of payment in the determination of success or failure. The issue may be more one of industrialization of the system than the commodification of organs. This makes sense, once he points it out, because any market-based approach is going to involve local monopsonies and a few big players in any given region. There's not going to be a whole lot of competition going on among agencies, offering higher and lower prices for kidneys, and so the outcome will depend on the detailed interactions that take place. And if the shortage is to be tackled (there were 50,000 people on the waiting list for kidneys in the USA in 2000) then this is going to be a large-scale, industrial effort whether or not payment is made to "donors" or not.  Money will be involved because big organizations - private industry or not - have lots of money flowing through them. People will make or break their careers based on what decisions are to be made, and as the HIV/hepatitis case proved, a public or not-for-profit agency is no proof against tragedy.

Much of the discussion is handled in terms of literature on the "gift relationship". It's not something I know much about (the literature, not the relationship, although I am a bit cheap), but it seems to handle what sociology is best at. There are layers of meaning that influence our decisions and attitudes to issues such as organ transplants. Healy reminds us that life insurance was once a controversial industry, with its connotations of payment for death, that had to overcome cultural resistance and find ways to stake a position that is both morally acceptable and profitable. The life insurance industry was, of course, one of the last havens of large-scale mutual co-operative organizations, and in some countries the movement away from that model to a shareholder model is one that has not yet played out. But I digress.

The nature of the gift relationship is subtle. If payment is made to a funeral home rather than directly to family members, then does that mean the organs of a just-deceased loved one have been donated (with an acknowledgement made in honour of the gesture) or have the family been paid? If a live kidney donor is compensated for their time and discomfort, but not for their kidney, have they been paid? There are more subtleties in the book, both involving payment and not. It seems that we all agree that organ donation is good in the abstract, but not so much when it comes to the crunch. Attempts to narrow this gap between abstract approval and on-the-spot reluctance may be seen as delicate and considerate diplomacy, or may be seen as cynical manipulation (Healy compares parts of the process to the con-man's efforts to "cool the mark" meaning to make the object of a scam accept his/her position as loser in a resigned manner rather than in anger, so that they don't report it to the authorities).

My guess is that the systems developed in different countries will involve some forms of payment but will steer clear of the obvious payment that Becker appears to advocate. Any agency, public or private, will have to be monitored (oops - there's that passive voice), and that monitoring will cost money. Issues like deciding on how to determine death (and debates are going on about this now, of course) are vulnerable to all kinds of incentives I'd rather not think about; but someone has to, and it shouldn't be someone with a direct monetary stake in the outcome.

Healy convinced me that the big issue is not the economists' issue -- of markets versus altruism -- but is the sociologists' issue of coping with complex incentives in large-scale industrial organizations, and that alone was worth the price of the book. Recommended.

Juicy kidneys! Get yer nice fresh kidneys here!

RAD points me to a New York Times article by Stephen Dubner and Steven Levitt about buying and selling organs. That’s organ as in kidney or liver, not organ as in church or Hammond. It’s an interesting entry to a very topical topic: one that still has shock value but which we are going to hear about more in the future.

My point of view, unsurprisingly, is that I don’t trust market mechanisms to deal with the problem. This essay is a starting point for thinking about it. I hope to follow it up later with a second attempt.

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The reason people are talking about buying and selling kidneys is that organ transplants are safe and cheaper than they used to be, so lots of sick people could benefit from an increase in organ donations, and so that spare kidney you’ve been keeping around is now a very popular kidney, used and second-hand though it be. So why, ask Dubner and Levitt, don’t we let people buy and sell their kidneys? After all, “most people can live safely on one kidney”, they say. They suggest that the main reason we don’t allow buying and selling of kidneys is what they call “the repugnance factor”, and they have a point, even though another reason is that it’s impossible to read that sentence without it looking like this: “most BUT NOT ALL!!! people can live safely on one kidney UNLESS SOMETHING GOES WRONG WITH THE OTHER ONE”.

The Dubner and Levitt article is a bit odd actually. It suggests it’s talking about how paying people for their kidneys may save the lives of people who need a new kidney, while also letting people with spare kidneys earn some cash on the side. But when it comes to the specifics they don’t talk about buying and selling at all. Instead, they talk about a matching program that matches incompatible donor-patient pairs. In these pairs, each potential donor’s kidney is a bad match for the immune systems of their partner—but the system matches them with similarly incompatible pairs and the two matched pairs can basically swap a kidney. No money involved. Then they talk about a potential donor who was going to sell his kidney to a stranger and, when he discovered that accepting payment for organs is illegal, went ahead and donated it anyway. No money exchanged. They don’t really investigate payment for organs at all.

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Still, even if D&L don’t actually talk about trading our internal garbage collectors for money, other people are doing so. Down the hall from Steven Levitt at the University of Chicago is Gary Becker, the Nobel Prize winner who is in favour of markets in everything. Together with graduate student Julio Elias, Becker has talked up the idea for several years now and – Becker being Becker -- he gets a fair amount of press for it.

There are some technical reasons why I’m not convinced by Becker and Elias’s argument (PDF). They aren’t at the centre of my problems with the idea, but effectiveness does matter, so let me pursue these problems here.

First, they maintain that right now the supply curve for kidneys is vertical. That is, a fixed amount of people are prepared to donate kidneys. But the people most likely to donate kidneys are the relatives of those on the operating table, so when the number of operations increases, so the number of those relatives increases, and so the supply of kidneys increases. It looks to me like that line should be sloping. Have I missed something? Hey, it’s been known.

They go on to suggest that the actual number of kidneys needed for transplants, compared to the total renal population of North America, is so small that once you offer a reasonable amount of money you could get as many kidneys as you could possibly want. That is, by offering payment the supply curve goes from vertical to horizontal. And then they go on to calculate how much you’d need to offer to induce people to sell. What they don’t take account of (though in a more recent essay Becker considers and dismisses this argument) is the possibility that offering to pay for kidneys might actually cut down the supply. This would be counter to most economic thinking, of course. The argument goes back to Richard Titmuss, a British academic who wrote a few decades ago about blood donation in a book entitled “The Gift Relationship”. Titmuss argued that offering to pay for blood would actually dissuade some people from donating, because whereas people feel good about themselves for donating blood, they don’t feel good about themselves for selling blood. Recent experiments in Sweden suggest that there is something to Titmuss idea. Becker doesn’t provide a real case against it, he just asserts that the effect would be small.

Put these two things together and the effectiveness of even a perfect market with no cheating or deception is less attractive than Becker suggests. Instead of a dramatic change from a vertical supply curve to a horizontal one, you have a more nuanced change. And that’s if everything else works dine.

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Becker also dismisses the other main arguments about the introduction of payments, which are:

•  that the result will be poor people selling their kidneys in order to supply longer life to the rich, giving yet another twist to the growing gap between rich and poor in the world.
•  that the dangers of malpractice and deception of one form or another are so large – especially for those without the resources to get legal assistance and advice, that poor people in particular will be preyed on.
•  that just about any system you put in place provides incentives for all kinds of nastiness. This applies to presumed consent mechanisms as well. And although this kind of thing can sometimes be dealt with, it’s costly to do so.

Well, I hope to look at some of these in a Part II later.

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There are some countries that have already taken deliberate steps to make it easier for people to get new organs. Nancy Scheper-Hughes is a sociologist at the University of California, Berkeley, and she has carried out research on organ trading around the world. In a 2003 forum she described these efforts:

There’s the Israeli model: very low donation rates so you export your transplant patients elsewhere and you give them medical insurance to pay for it, even at the cost of their buying kidneys from poor peasants in Eastern Europe. There are the Philippine, Iranian and Iraqi models: government-sponsored payments that allow very poor people to sell their organs for as low as $500, which leads to deep social resentments. The Chinese model: you can use the organs of executed prisoners. The Russian model: in which there’s not such a careful monitoring of confirmatory tests for brain death. The Spanish model: paying the procurers. More humanely, there is the Austrian and Belgian model of presumed consent.

There’s no doubt other countries will be dealing with the issue in the future. But Scheper-Hughes is on the money (so to speak) when she points out that the presumed consent model requires a trust in the fairness of the medical system that certainly doesn’t exist in the US.

“we don’t have the kind of social consensus whereby people feel that their organs will be fairly and equally distributed among the poor as well as the wealthy or well insured, among women as well as men, or that all will have an equal right to get an organ should they need one. So first we have to address the lack of national health care, the 44 million uninsured, and the contradiction in asking poor people in America – who tend by and large to be over-represented in emergency rooms and ICUs – to donate organs when they and their relatives may not even have basic health care.

Canada may not be in quite the same straights as the US in that way, but it’s got some real issues, and they need to be dealt with in order to deal with the issues surrounding organ transplants.

Economist's View: Mankiw on Globalization: People Should Move

From Mark Thoma yet again, an example of just how entrenched the unrealistic picture of perfect markets is. A lot of my book is spent arguing that the simplistic free-market picture of the world is too influential and that we really need to get rid of it from public debate. From time to time I wonder if I am being unfair and setting up a straw man. Then I look around and it really does seem that even (or especially?) influential, high-profile people do have this simplistic view of the way the world works stuck firmly in their brains. Greg Mankiw was Chairman of the President's Council of Economic Advisers from 2003 and 2005.

In Mankiw on Globalization: People Should Move Mark Thoma reports a panel discussion chaired by now ex-Harvard president Larry Summers:

Summers urged the economists, who kept returning to nuanced policy discussions, to come up with more practical political advice. Referring to Flint, Mich., where workers’ jobs are being outsourced, he challenged the academics to come up with a realistic suggestion for the Buick-city mayor.

“That’s the political reality,” said Summers, pointing to former Senator Bob Graham D-Fla. in the audience who was nodding in agreement. ... “...Maybe the answer is [to] put an economics course in every high school and we’ll be OK,” said Summers, taking a jab at Mankiw who earlier suggested that introducing economic principles to Americans in high school would help people better understand globalization.

“I don’t know about the mayor, but I know what the people should do,” Mankiw said, “The people should move.”

Summers countered, “Where do you think the people in Flint should go?”...