More than 100,000 people are currently waiting for a kidney transplant in the United States. It can be a long and challenging process waiting for a donor, but improvements can be made to make the process quicker, and they could involve economics.
Economist Alvin Roth won a Nobel Prize in 2012 for his work in matching markets. This work looks at markets where price isn’t a key factor, which led Roth to the idea of kidney transplants because it is illegal to pay for a kidney.
Roth’s new book, Who Gets What — and Why?, looks at different scenarios where transactions are made without anyone actually buying something, including getting a job, getting into a certain school, dating and the process of finding an ideal kidney donor.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
NPR‘s Nancy Shute discussed the book and specifically the interest in kidney donation with Roth.
Roth explained that he doesn’t have a personal connection with kidney disease, but the idea to work on solutions came about when he used kidney donation as an example when he taught students about game theory in markets because it doesn’t involve money.
When the first kidney exchange took place at a nearby hospital in 2000 when Roth was at Harvard, the idea changed from an example in class to a real potential project.
The beginning of the endeavor started with creating a thick marketplace, Roth said, so they needed to create a database of willing donors. “We had to get re-consent forms from everyone in New England; there were 14 transplant centers working with us.” He said getting the database put together took about a year, and getting hospitals organized to do simultaneous surgeries took about a year.
Health Benefit Consultants, Share Your Expert Insights in Our Survey
Share some of the trends you are seeing among your clients across healthcare, including chronic conditions, behavioral health, healthcare navigation, and more.
Here’s part of Shute’s discussion with Roth about the challenges and resulting solutions of the market design strategy in place for the project:
Once marketplaces get thick, they suffer from congestion. It has to do with all the things you have to do to complete the transaction. When you’re shopping on Amazon, it involves searching. There’s all this stuff, and you have to find what you want. When you’re doing kidney transplants, you have to find out who can exchange kidneys with whom, doing blood tests to make sure it’s true. You can’t just work on the preliminary data. Then you have to organize the logistics. Initially we were doing simple exchanges, with two pairs of people or three pairs. An exchange with two pairs, where the patients got a kidney from the other patient’s incompatible donor, needed four operating rooms because the surgery was done simultaneously. That way if a donor changed her or his mind at the last moment, someone wouldn’t be left without a kidney. And a three-way exchange required six. That’s about as much as we could manage in New England.
How did you break that logjam?
We figured out that if you had a nondirected donor, someone who wasn’t paired with a patient but who was willing to donate a kidney to anyone, you didn’t have to do simultaneous exchanges. If the chain of transplants was broken along the way, no one would be tragically harmed. So nowadays we do quite long chains of exchanges.
Market design is a very outward-facing form of economics. I’m talking with doctors. I’m talking with school administrators. I’m doing a lot these days on school choice. I’m constantly talking with people who aren’t economists. A big deal in market design is finding the inside champions who the economists can help. I kind of think of economists as being helpers here. We have some ideas, but we don’t do any of the surgeries.
Roth said that even though donors can’t be paid for their kidney, there are still costs involved for them like travel and time away from work. It’s not against the law for people to be reimbursed for those costs.
I would like to see steps taken making it easy for hospitals to reimburse donors’ costs and then get reimbursed by Medicare or private insurance. This would pay for itself, because every transplant saves a quarter of a million dollar in the first five years. It costs $90,000 a year to do dialysis, $100,000 for the transplant and $20,000 a year for anti-rejection drugs.
Photo: Flickr user scribbletaylor
