Organ grinders.

The federal government's idea of "fairness" may exacerbate an already deadly organ shortage.

A few decades ago people joked that the human body, once its divine spark was extinguished, was worth about $2.00, which was the market value of its constituent chemicals. Times change, and the revolution in organ transplant technology has turned our bodies into mines of valuable spare parts.

But restrictions on the procurement and distribution of organs hamper the use of this resource, with deadly consequences. A new federal rule is apt to make matters worse.

In 1996, 281 hospitals performed almost 20,000 of the five most common major-organ transplants (kidney, liver, pancreas, heart, and lung), at a cost of more than $5 billion. (See table.) The main constraint on the system is the supply of organs. The 19,366 transplants in 1996 relied on organs from 5,417 cadavers and 3,553 living donors. Eighty-six percent of the latter involved transfers between relatives, usually of kidneys. More bodies are needed, but only 10,000 to 15,000 of the 2.4 million deaths in the United States each year produce recyclable organs, and the number of people on waiting lists keeps [TABULAR DATA OMITTED] growing, from 27,805 on the list at some time during 1988 to 72,386 in 1996. More than 4,000 patients will die this year waiting for organs.

These waiting list numbers actually understate the shortfall. No one gets on a list until he passes "the green screen" by demonstrating his ability to pay for the operation, which in practice means that he must have first-class health insurance coverage. Medicare/Medicaid pays for 39 percent of all transplants, private insurance for 38 percent. For 20 percent of patients, the type of payment is unknown. The remaining 3 percent is spread among miscellaneous sources such as "other government" and "self." The number of patients filtered out by the green screen, who could benefit from transplants if the price came down enough for them to pass it, is conjectural.

Corneas are not in short supply. Many more suitable organs are available, and in many states dead patients' family members are presumed to consent to the harvest unless they specifically say no. Since few know about this policy, few refuse. The average cost of a cornea transplant is $8,000, and 45,000 are performed each year. Other transplants are much more expensive: $172,000 for a kidney, $317,000 for a heart, $394,000 for a liver (including five years of follow-up).

The National Organ Transplant Act of 1984 bans the sale of human organs. The donor is supposed to be inspired solely by the spirit of giving. Doctors and hospitals, however, may charge substantial sums for the services involved in transplanting. The nation's 63 federally approved organ procurement organizations collect an average of $24,000 per organ, or $70,000 per cadaver, from ultimate medical payers. This money is divided among the procuring organization, the harvesting hospital, and, according to some allegations, medical personnel. The exact split is murky.

The 1984 law also set up the Organ Procurement and Transplant Network (OPTN) to promote the sharing of organs across geographic boundaries. The OPTN is run under contract by a private corporation called the United Network for Organ Sharing, which is in turn run by the private institutions with an interest in transplants. The original idea behind the network was that an organ would be used locally if possible, but if no suitable recipient could be found or if local facilities for transplanting were not adequate, the OPTN would broaden the search.

In 1988 only about 25 percent of recovered livers were used locally; 66 percent were shared with other centers; and the rest went for research or had to be discarded. The pattern was similar for other organs. During the last decade, the percentage of organs used locally has risen. It was 62 percent for livers in 1996, and there have been comparable increases for other organs. This trend occurred because knowledge of surgical techniques became more widespread and medical centers found transplant programs increasingly attractive. Such programs lend a cutting-edge aura to hospitals, doctors like them, and they bring in welcome overhead payments. As a result, the number of centers has expanded dramatically. Today, 124 centers do livers, for example, compared to two in 1983.

Other changes have cut the other way, against localism. Preservation techniques have improved, so organs that would once have been used locally or not at all can now be shipped across the country. Citing this development, some of the pioneer programs that have been losing market share in recent years have started to pressure the Department of Health and Human Services for a national system of organ allocation. According to National Journal, the University of Pittsburgh - which went from 569 liver transplants in 1990 to 244 in 1996, even as the national total doubled - has spent $260,000 to lobby Congress and enlisted two certified Friends of Bill to lobby the White House and HHS.

Congress and HHS have already taken steps toward establishing a national organ plan. Under the original version of the organ transplant law, membership in the Organ Procurement and Transplant Network was voluntary, and the network played a role only when an organ could not be used locally. In 1986 Congress required all transplant hospitals to join the OPTN and agree to adopt any allocation policies approved by HHS, on pain of losing Medicare eligibility.

Under an HHS rule scheduled to take effect on October 1, organs would go to the medically neediest person on the national waiting list, wherever he is located, as long as transport is technically possible. (Kidneys last 72 hours; livers 12 to 24; hearts only six.) "Neediest" means most in danger of imminent death. This standard would replace the multiple and only partly articulated criteria currently applied at the local level. For example, the OPTN's criteria for kidneys give extra points to people under 18. Data on waiting times for livers hint that transplant centers favor children for these organs as well.

In justifying the new rule, HHS notes that waiting times under the current system vary, sometimes widely, from one part of the country to another. The department argues that patients everywhere should have an equal chance at an organ under uniform medical criteria. HHS draws no distinctions by age or cause of disease.

The HHS rule has prompted loud objections. At the local level, relations between the organ procurers who get the families to sign on the dotted line and the transplanters are tight, and the centers take a proprietary view of their acquisitions.

Sharing is often low on their list of priorities. In testimony this year, an HHS official told Congress with horror that sometimes, even when another hospital has a perfect match, a center will give up an organ only upon a promise of future repayment in kind. States are also taking a proprietary view: Louisiana, South Carolina, Wisconsin, and Oklahoma have passed laws purporting to require that organs donated locally be used locally. The OPTN and HHS are still negotiating, and as this is written it seems unlikely that the new rule will take effect on schedule.

Proponents of localism note that transplants require a lot of follow-up, and they argue that patients do better if the operation takes place near home. They also believe that people are more likely to donate organs if they know their gift will be used locally. Another argument, hinted at but rarely stated explicitly, hinges on the fact that procuring organs requires confronting a family at its moment of maximum anguish. Medical personnel are more likely to steel themselves for this task if the organs they obtain will be transplanted by surgeons they know into their own patients. If the organ is going off to who-knows-where, the procurement effort is likely to be perfunctory.

More mercenary considerations are also at stake. If priority is given to local use, then the industry will be characterized by a multitude of local programs, each performing a limited number of transplants. It will be difficult for national centers to develop because such entities cannot be supported by donations in a single city.

Sixty percent of the people on the waiting list for the University of Pittsburgh's liver transplant program are from outside the area, for example, even as the number of procedures performed there has declined. The local centers fear that HHS wants to move toward a system of major national transplant facilities.

The centers argue that HHS's "sickest first" policy serves the interests of their big competitors. As the director of the Wisconsin Donor Network put it: "The redistribution of organs away from Wisconsin so as to ostensibly benefit the 'sickest' patients can be perceived to satisfy the business agenda of a few transplant centers which have encouraged unlimited growth in their waiting lists till they have outstripped the capacity of their community to meet their organ needs. This situation is exacerbated when these lists are heavily populated with out-of-area patients, many of whom could be transplanted quicker and with better outcomes in their home community."

The participants in this debate agree on a few points. One is that donors and their families should have no say in who receives organs. Doctors and bureaucrats regard this as so obvious that they never bother to justify it. In fact, it is far from obvious. Quite the reverse - given the intimacy of the gift, the donor should have a say.

One reason for HHS or the medical establishment to eschew criteria of moral worthiness in allocating organs is that such standards are highly subjective. Fine. Let multiple criteria be used, reflecting the views of multiple donors.

HHS is also making a moral judgment by establishing a standard of "sickest first." It is deciding that a small chance of a couple extra years for a cirrhotic senator is more important than a good shot at 40 years for a young person who contracted a rare liver disease while serving in the Peace Corps.

One can see why Congress would regard this as a reasonable set of priorities, but others are entitled to skepticism. "Sickest first" also means that more repeat transplants will be required and more recipients will die.

Every wasted organ means that someone else who might have lived won't make it. HHS's avoidance of considering "life years" or "quality of life" (instead of just "life") is ethical cowardice. To force patients to reach the brink of death before receiving a transplant out of fear that someone, somewhere might be willing to exercise moral responsibility lends new meaning to the term "dead hand of bureaucracy."

A donor might also be disturbed by the financial requirements for a transplant. He might decide to earmark an organ for a less-favored class of people on the condition that other players in the system cut their fees to make the operation affordable. If my liver were in shape to be useful to anyone, I would deem small-business operators and other poorly insured people at least as worthy as well-covered bureaucrats.

Another point so well accepted that it's rarely mentioned is the assumption that organ donors should not be paid. Even though everyone agrees that donation rates need to be raised, few are willing to consider how financial incentives might serve that cause. A lively debate on the issue is heating up in the academic literature, including the pages of the prestigious British medical journal Lancet, and is beginning to spill over into popular discussion.

The idea that it's offensive to discuss transplants in financial terms is droll, since the system is awash in economic calculations by medical centers, surgeons, health insurers - everyone except the donors.

In a current working paper, Julia Mahoney, an associate professor of law at the University of Virginia, notes that "given our current institutional arrangements, avoidance of market language is misleading and...even damaging," making it difficult "to comprehend what benefits are available and how they are distributed."

By trying to establish a single national distribution system, the federal government is moving in precisely the wrong direction. We don't trust central planning to deliver potato chips. Why should we trust it to deliver life-saving organs?

Contributing Editor James V. DeLong ([e-mail]) is an adjunct scholar at the Competitive Enterprise Institute and the author of Property Matters: How Property Rights Are Under Assault - and Why You Should Care (The Free Press). His Web site is www.regpolicy.com.