nately, there is no general, transparent consensus on the nature and extent of healthcare services that people should be able to receive without regard to the ability to pay and how the cost of that care should be distributed across the population. The unfortunate result is a financing system that distributes both care and cost arbitrarily in a manner that meets no rational standard of efficiency or equity.

The U.S. healthcare system does not guarantee access to life-saving treatments such as organ transplantations, and the ability to pay does play a role in the distribution of this important good. Few people pay directly for organ transplantation, which is expensive even without payment for the organs. People in need of organs rely on public or private insurance to pay the cost of acquiring the organs and transplanting them, and a transplant is not received unless insurance coverage or access to charity care is available (the so-called green screen).

Given this system of healthcare financing (or any system that might replace it), what would the demand side of a market for organs look like? Presumably, most of the actual buyers would be the healthcare organizations that perform transplantations. They would compete with one another for the available organs, the price would settle down at the market-clearing price, and the cost of organs would become part of the total charge to a third-party payer for an organ transplant. This market would inevitably be very complex.

So far the chapter has referred to “the price” of an organ, but an actual market would have multiple prices for organs because organs are highly differentiated products. For example, hearts differ from kidneys and kidneys differ from one another along many medically significant dimensions. Organ recipients also differ from one another, and matching an organ with the right recipient is important in achieving the benefits of transplantation. This means that the kidney market or the heart market would actually be a whole set of interconnected markets for goods that are close substitutes for each other (e.g., kidneys or hearts from people of different ages, with different blood types, or different human leukocyte antigen factors). The price of a kidney would therefore actually be a price structure for all the different kinds of kidneys. This price structure would result from the interaction of the array of kidneys available with the variety of patients in need of a kidney at any point in time and the trade-offs among kidney characteristics that are medically possible for transplantation into various patients.

Of course, the original suppliers and the end users of the organs do not have the medical knowledge to make sophisticated sales and purchase decisions, and even if they did, they are hardly in the best physical condition to apply their knowledge at the time of donation or transplantation. Like the rest of the healthcare market, this market would be characterized by complicated agency relationships (situations in which decisions are made by an



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