It’s easy to take a functioning kidney or liver for granted. But, for the approximately 100,000 Americans who are on the national waiting list for a lifesaving organ transplant, and the 17 Americans who die daily because their name wasn’t called fast enough, each day is a battle for survival. Recently, Harvard University researchers gave hope to transplant patients, finding that the Food and Drug Administration-approved drug donepezil can be used in “emergency situations to prevent irreversible organ injury while a person is being transported to a hospital.”

But, until policymakers liberalize the transplant market and allow donors access to meaningful compensation (with proper safeguards), these medical advances will be frustratingly limited. Policymakers must end this preventable tragedy and save hundreds of thousands of lives.

Many pages have been published dissecting the deficiencies of the organ transplant system. The simple problem is an imbalance between supply and demand. With approximately 42,000 total transplants performed in the U.S. each year, transplant centers cannot hope to cover the 60,000 new individuals added to the waitlist each year. Not enough people are altruistically motivated to go under the knife and undertake a costly and disruptive operation for a stranger. And, because the National Organ Transplantation Act of 1984 deems it “unlawful for any person to knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce,” these individuals cannot be compensated for their donations.

A promising solution would be allowing a market in transplanted organs, in which some mix of patients, insurers, government programs, and non-profit organizations would pay individuals to part ways with their organs. A legal organ market could also allow individuals to sell their organs upon death, with proceeds passed onto heirs or used to defray funeral expenses.

This market-based framework is not without its critics. Oxford scholar Dr. Simon Rippon contends that legal organ markets would inevitably harm the poor and exacerbate inequality in society. He writes, “if organs can be easily exchanged for cash they will then become commodified, and naturally subject to the kinds of social and legal demands and responsibilities that govern our other transactions in the market.”

The truth is that this is unavoidable and already happening. While insurers are proscribed by law from paying for organs, insurance plans often pay for the costs associated with transplant surgery and recovery. Insurance providers often grant coverage for both the policyholding recipient of the transplant and the living donor, but the scope and breadth of services depend on the type of insurance held by the recipient. As the largest payer for kidney transplantation in the U.S., Medicare reimbursement policies exert significant influence on transplant centers, physicians, and other insurers. Medicare reimbursement costs are significantly lower than for private insurers, and as a result, costs inevitably shift to patients on private plans capable of paying more money.

According to a 2023 analysis by Mayo Clinic researchers, “average overall reimbursement for abdominal transplant procedures decreased by 23.2% from 2000 to 2021. Liver transplantation saw the largest decrease in reimbursement (32.4%). Kidney transplantation with and without recipient nephrectomy saw decreases of 24.21% and 24.11%, respectively.” This messy insurance structure ensures a significant financial squeeze for donors and transplant patients, without any comprehensive compensation system in place for donors.

The “commodification” has crept in, but in a way that few find helpful. The result is plenty of downside and not a whole lot of upside for people kind enough to donate their organs.

There has been some limited progress on donor compensation. For example, the National Living Donor Assistance Center subsidizes living donors’ lodging and transportation expenses. In 2020, the Department of Health and Human Services finalized a rule, “to remove financial barriers to organ donation by expanding the scope of reimbursable expenses incurred by living organ donors to include lost wages, and child-care and elder-care expenses incurred by a caregiver.”

But until individuals, non-profits, and insurers can pay directly for organs, prospective donors will largely stay on the sidelines. It’s time for market reform to catch up with medical innovation. Thousands of lives depend on a better approach.

Ross Marchand is a non-resident fellow for the Taxpayers Protection Alliance.