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New Zealand to Compensate Organ Donors
From Marginal Revolution.
"New Zealand will now compensate live organ donors for all lost income:
Today’s unanimous cross-party support for the
Compensation for Live Organ Donors Bill represents a critical step in
reducing the burgeoning waiting list for kidney donations, according to
Kidney Health New Zealand chief executive Max Reid.
“The Bill effectively removes what is known to be one of the single
greatest barriers to live organ donation in NZ,” Mr Reid says. “Until
now the level of financial assistance (based on the sickness benefit)
has been insufficient to cover even an average mortgage repayment, and
the process required to access that support both cumbersome and
demeaning. The two major changes that this legislation introduces –
increasing compensation to 100% of lost income, and transferring
responsibility for the management of that financial assistance being
moved from WINZ to the Ministry of Health – will unquestionably remove
two major disincentives that exist within the current regime.”
Eric Crampton
(former GMU student, now NZ economist who supported the bill) notes
that a key move in generating political support was that New Zealand MP
Chris Bishop framed the bill as compensating donors for lost wages
rather than paying them. A decrease in the disincentive to donate–an
increase in the incentive to donate. To an economist, potato, potato.
But for people whose kidneys fail in New Zealand, the right framing may
have been the difference between life and death.
This is also a good time to remind readers of Held, McCormick, Ojo and Roberts, A Cost-Benefit Analysis of Government Compensation of Kidney Donors published in the American Journal of Transplantation.
From 5000 to 10 000 kidney patients die prematurely in
the United States each year, and about 100 000 more suffer the
debilitating effects of dialysis, because of a shortage of transplant
kidneys. To reduce this shortage, many advocate having the government
compensate kidney donors. This paper presents a comprehensive
cost-benefit analysis of such a change. It considers not only the
substantial savings to society because kidney recipients would no longer
need expensive dialysis treatments—$1.45 million per kidney
recipient—but also estimates the monetary value of the longer and
healthier lives that kidney recipients enjoy—about $1.3 million per
recipient. These numbers dwarf the proposed $45 000-per-kidney
compensation that might be needed to end the kidney shortage and
eliminate the kidney transplant waiting list. From the viewpoint of
society, the net benefit from saving thousands of lives each year and
reducing the suffering of 100 000 more receiving dialysis would be about
$46 billion per year, with the benefits exceeding the costs by a factor
of 3. In addition, it would save taxpayers about $12 billion each year."
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