The economic principle that powers this kidney donor market

economics correspondent Paul Solman looks
at a market trading in a commodity too precious
to put a price on.
The paired-organ exchange allows living kidney
donors who are not a match with their intended
recipient to network with others who are.
It’s this week’s installment of our “Making
Sense” economic series.
MELANIE MELILLO:  Look how pretty, Rob.
Rob and Melanie Melillo’s (ph) 21st wedding
A bit less dramatic than their 20th.
MELANIE MELILLO:  He got a piece of steak
stuck in his throat, and he looked at me with
this face and I did the Heimlich, and I said
to him I just saved your life twice.
PAUL SOLMAN:  Once from choking.
MELANIE MELILLO:  You lucky dog.
PAUL SOLMAN:  The second time, however, is
still to come, to save Rob from a hereditary
disease that’s destroying his kidneys, and
forced him, last August, to join 100,000 other
Americans on a waiting list for a kidney from
a deceased donor.
How long did they say you would probably have
to wait?
ROB MELILLO:  When they first listed me I
was at three to five years.
Now I went for my one year checkup and they
said it got bumped to four to seven years.
PAUL SOLMAN:  Even though, in this last year,
his health has continued to decline, making
it harder and harder for him to keep working
as a plumber.
ROB MELILLO:  About four hours worth of work
and I’m dragging.
PAUL SOLMAN:  So, Melanie was ready to give
one of her kidneys to Rob.
MELANIE MELILLO:  I said I’d give it if I
The nurse said, well, you can.
PAUL SOLMAN:  But, it turned out, not to
Rob directly.
MELANIE MELILLO:  Give me that jog in place!
PAUL SOLMAN:  At age 47, this fitness instructor
has kidneys that support a body able to run
rings around the rest of us.
Problem is, Melanie is a type A, blood type,
that is, meaning she can only donate a kidney
to someone with type A or type AB blood.
But Rob is type O, meaning he can receive
a kidney only from someone with type O blood.
The key to this story, however, is that even
though Rob’s body would reject Melanie’s kidney,
they learned that economics has come up with
a way that she can donate for him.
you’re healthy enough to give a kidney but
you can’t give it to the person you love,
and this is what opens up the possibility
of exchange.
PAUL SOLMAN:  It’s a process called paired
exchange, and economist Al Roth won a Nobel
Prize for coming up with the idea more than
a decade ago:  a market for kidneys, but
non-cash, since buying and selling organs
is illegal everywhere in the world except
ALVIN ROTH:  A simple kidney exchange is
between two incompatible patient donor pairs,
so at the top here we have a donor who would
like to give to a recipient but can’t because
they have incompatible blood types and on
the bottom, we have a blood type B donor who
can’t give to a blood type A recipient but
they could the exchange with each other.
PAUL SOLMAN:  What Roth and his team realized:
the bigger the market, that is, the more pairs
on the list, the greater the chance of an
ALVIN ROTH:  So, it turns out that in the
United States we have people who want to give
someone a kidney and don’t have a particular
person in mind and that’s actually important.
We’ve learned how to use them to start chains
of transplants where they give to a patient
donor pair and the donor in that pair gives
to someone else who gives to someone else
who gives to someone else — long chains of
transplants and that’s enormously effective.
PAUL SOLMAN:  The minute Rob and Melanie
Melillo heard about an exchange market, they
signed up at their local hospital, Westchester
Medical Center, north of New York City.
After months of physical exams, and for Melanie,
psychological testing, they were approved.
MELANIE MELILLO:  So, we were told that it’s
an average of four to six months you wait.
PAUL SOLMAN:  Hey, a startling improvement
on four to seven years for a deceased donor
Problem is, finding a kidney for Rob hasn’t
been as easy as anticipated.
MELANIE MELILLO:  We’ve been on it for six
months and we haven’t heard anything.
PAUL SOLMAN:  So how frustrating is it that
it’s been six months and nothing’s happened
They run the paired exchange list every Monday,
and Tuesday we would find out.
And every Tuesday sort of wait for the phone
to ring.
PAUL SOLMAN:  Waiting for word from UNOS,
the United Network for Organ Sharing, that
they’ve found an O donor for Rob.
But why is that such a problem?
Half the population is type O.
Because someone who has blood type O can donate
to anybody.
PAUL SOLMAN:  That’s Rob’s would-be surgeon
at Westchester, Thomas Diflo.
THOMAS DIFLO:  So it’s unlikely to have a
pair where the donor is O and the recipient
is something else.
ROB MELILLO:  So if she was an O, I would
not be on the exchange list because I would
just get her kidney.
PAUL SOLMAN:  That’s why someone with blood
type O is called a universal donor.
But maybe type O’s shouldn’t automatically
give a kidney to their partner, says transplant
expert Marie Morgievich, and why she tries
to convince pairs with an O donor to enter
an exchange instead, enlarging the pool of
available organs.
For example, we could match your recipient
with a younger aged kidney or improved protein
match kidney or some other variable that could
help them statistically get a longer life
from that transplant.
And you have the option of assisting another
pair or pairs that are incompatible receive
TECHNOLOGY:  It’s the value of playing together.
PAUL SOLMAN:  Economist Nikhil Agarwal studies
the kidney paired exchange market.
NIKHIL AGARWAL:  Imagine that you have a
marketplace where all people who are willing
to trade various types of goods collect and
they come to the same place to conduct transactions.
You might be able to find some rare transactions
that you wouldn’t otherwise be able to do.
PAUL SOLMAN:  and first thing I learned in
economics was the whole point is to make as
many trades as you can possibly make because
that’s what a market’s for.
NIKHIL AGARWAL:  Every time you create a
trade, you end up transplanting one extra
PAUL SOLMAN:  Don’t make a trade, and one
more person goes, or remains, on dialysis.
OK, here goes nothing.
PAUL SOLMAN:  Dialysis takes over the job
of filtering toxins from the blood.
It saves lives, but at a cost — and not just
$100,000 annual tab, which is paid by Medicare.
As dialysis patient Jairo Acevedo told us
in a recent story:
JAIRO ACEVEDO:  They say that for every year
that you spend in this machine, you lose five
years of your life expectancy.
PAUL SOLMAN:  And, with no paired exchange
partner, he’s been on dialysis for seven years,
waiting for a deceased donor kidney.
Rob and Melanie, on the brink of Rob’s needing
dialysis, are desperate to avoid it.
MELANIE MELILLO:  We showed up at the transplant
center after having Rob’s monthly doctor’s
appointment with his nephrologist and basically
said you have to help us.
And that’s when she said there were other
lists, other paired exchange lists to get
PAUL SOLMAN:  Other lists?
The Melillos say they only knew about UNOS.
MELANIE MELILLO:  You don’t know the questions
you’re supposed to ask if you don’t know.
We didn’t know to ask is this the only list?
Are there other lists?
PAUL SOLMAN:  Now Westchester does mention
other paired exchange programs near the end
of an eight-page consent form the hospital
says it reviews verbally with all patients
before they sign.
But the Melillos say it was only when they
knew to ask, nearly a year into the process,
that Westchester told them about two other
major exchanges, neither of which the hospital
participates in.
MELANIE MELILLO:  I understand, you know,
it’s a business.
That’s what it is at the end of the day.
But his life is in the balance.
Our lives are in the balance.
PAUL SOLMAN:  The economic point: more exchanges,
larger markets, more potential matches.
And it turns out there’s a hospital in New
Jersey that participates in all three exchanges:
Saint Barnabas Medical Center, with one of
the largest kidney transplant programs in
the country.
Nephrologist Shamkant Mulgaonkar.
So we participate in multiple registries and difficult patients.
We put them in multiple registries.
If you have an incompatible donor in an exchange,
the average time is somewhere between six
months to a couple of years.
So, you will get transplanted as long as you
have a living donor.
PAUL SOLMAN:  But it sure isn’t easy.
MARIE MORGIEVICH:  Doing one exchange transplant
is significantly more work than doing a donor
directly to a recipient that they’re compatible
PAUL SOLMAN:  Again, Saint Barnabas’s Marie
MARIE MORGIEVICH:  Really 100 people within
the hospital at any one time are helping achieve
that success.
UNIDENTIFIED FEMALE:  Can you raise your
hand if you’re a donor?
And if you’re a recipient?
PAUL SOLMAN:  But it’s paying off for the
members of a Saint Barnabas chain featured
on the today show in June — 27 transplants
and counting.
MELANIE MELILLO:  Hi, I’m Melania Melillo.
PAUL SOLMAN:  So, the Melillos took their
business to Saint Barnabas, hoping they’d
found a marketplace big enough for Melanie
to give, and for Rob to receive in return.
And last week, less than a month after this
taping, they were told that Saint Barnabas
has matched them with another couple where
the husband, who needs a kidney, is type A,
like Melanie, and the wife, who’s willing
to give a kidney, is type O like Rob.
The surgeries may happen by the end of August.
ROB MELILLO:  Happy anniversary.
MELANIE MELILLO:  Happy anniversary.
PAUL SOLMAN:  And with the advent of kidney
exchange markets, hopefully many more to come.
This is economics correspondent Paul Solman
reporting for the PBS NewsHour.

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