Alex Chan on deceased organ donation

 The Harvard Gazette points to this interview with HBS professor Alex Chan:

Designing Incentives That Matter—Even After Death: Interview with Alex Chan By Avery Forman 

"In “Reimagining Transplant Center Incentives Beyond the CMS IOTA Model,” published in January in the Journal of the American Medical Association, Chan explores a government experiment that pays kidney centers for volume and efficiency—not just outcomes—which could increase transplant numbers. Chan cowrote the article with Alvin E. Roth, the George Gund Professor of Economics and Business Administration, Emeritus, at HBS.

In addition, covering funeral costs for organ donors could increase donation rates by up to 35%, and save up to 419,000 life years and as much as $800 million in Medicare expenses, Chan and coauthor Kurt Sweat of the University of Texas Southwestern Medical Center write in “Funeral Expense Reimbursement as a Strategy to Enhance Organ Donation and Transplantation Access,” published in October in NPJ Health Systems.

 ...

"Why Chan felt compelled to study the organ market

“Two things pulled me in. First, this is a market where the stakes are brutally clear. Organ transplantation is one of the few places where inefficiency shows up not as a deadweight loss in a textbook, but as people dying on a waiting list. When a market fails here, it fails loudly.

Second, the level of inefficiency is staggering. Each year, more than 5,000 organs are recovered and then discarded, while roughly the same number of people die waiting for an organ. These are million-dollar transactions once you account for surgery, lifelong care, and avoided dialysis. So even small improvements in incentives can save lives directly and save the healthcare system billions of dollars.

For an economist or market designer, that’s a rare alignment: moral urgency and economic leverage pointing in the same direction.”

Incentives must consider what’s socially acceptable

“Incentive design is much harder than we like to admit. Organ transplantation is a supply chain. You have procurement organizations, hospitals, surgeons, patients, regulators, all responding to different incentives.

Designing a good incentive for one actor is already difficult. Designing incentives so that the entire chain works well is not just adding up the optimal incentives for each link. Sometimes improving one part of the system quietly breaks another.

The choice isn't between market and no market. It’s between a system we design on purpose and a system that fails by accident.

This is a market with moral and political constraints embedded in it. In healthcare, and frankly now in most markets, the incentives that are economically sensible also need to be socially legitimate.

Incentives don’t just change behavior; they express values. In markets that touch life, death, or dignity, people react not only to what the incentive does, but to what it seems to say. That makes incentive design less like tuning a machine and more like negotiating a fragile social contract.

 ...

"The ‘ick factor’ might prevent progress

“Very often people do not want to use the right incentives because they have this concept of it being repugnant.

[For instance], we would pay for the funeral of someone who gives their life for their country when they serve in the military. We will pay for the funeral of someone who donated their body for scientific research to advance society. But if people want to donate an organ to save another person's life? If [that donor’s] family would very much welcome some support at a moment of crisis, we are not going to pay for the funeral. Even a very sensible incentive sometimes is bound by social norms, or even what we call the ‘ick factor,’ and we have a less effective system at the end.

People worry that incentives will corrupt the gift of life. But the truth is that we already have incentives; they’re just accidental and poorly distributed. The choice isn't between market and no market. It’s between a system we design on purpose and a system that fails by accident. Ignorance of incentives doesn't make a system moral; it just makes it inefficient.”

 

Alex Chan on market design and organ transplants (and how to begin a video)

Alex Chan, at HBS:) 

https://youtu.be/8n6A9wO1yt0?si=VsaT0AVNgYc7VdnB

Redesigning transplant and OPO center incentives (Chan and Roth in JAMA; Bae, Sweat, Melcher and Ashlagi in JAMA Surgery)

 

Chan A, Roth AE. Reimagining Transplant Center Incentives Beyond the CMS IOTA Model. JAMA. Published online January 26, 2026. doi:10.1001/jama.2025.26194 

 "On July 1, 2025, the Centers for Medicare & Medicaid Services (CMS) launched the Increasing Organ Transplant Access (IOTA) model, a national experiment in revising how transplant centers are evaluated and paid.

"For decades, transplant centers were primarily judged by 1-year graft and patient survival for patients who underwent a transplant. That standard, designed to safeguard quality, sometimes constrained access to transplants by rewarding risk avoidance rather than expansion. This contributed to persistent kidney shortages, alongside continued organ nonutilization.1

"The IOTA model marks a deliberate rebalancing. CMS is tying payment not primarily to short-term survival, but to 3 domains: achievement (60 points for transplant volume), efficiency (20 points for kidney offer acceptance), and quality (20 points for graft survival).

...

"A kidney transplant begins with an organ procurement organization (OPO). Yet OPOs remain outside the IOTA payment framework, perpetuating fragmentation between procurement and transplant.

"Recent experience with OPO performance metrics illustrates how narrow incentives can distort behavior. After CMS introduced tier-based OPO evaluations in 2021, lower-performing OPOs increased organ recovery, which also sharply increased discards, reliance on higher-risk organs, and out-of-sequence kidney placements,3 raising concerns about fairness to waitlisted patients.4 

...

"Emerging economic and experimental research suggests that joint accountability—rewarding procurement and transplant entities together for improving population health—can both shift recovery, discard, and transplant numbers and produce improved gains in patient health (Table).1 Without such system-level metrics spanning OPOs and transplant centers, IOTA will operate within a fragmented ecosystem where incentives push procurement and transplant in different, sometimes counterproductive, directions."

############

See also

Bae H, Sweat KR, Melcher ML, Ashlagi I. Organ Procurement Following the Centers for Medicare and Medicaid Services Performance Evaluations. JAMA Surg. 2026;161(1):97–100. doi:10.1001/jamasurg.2025.5074 

 

Stanford graduation--Alex Chan, Ph.D.

 Congratulations Dr. Chan.

Welcome to the club, Alex.

Alex Chan makes his 'final presentation' at Stanford.

 

Note Alex's shoes

Alex Chan

 Congratulations, Alex.

Alex Chan

@alex8chan

·

Mar 24

I will join

@HarvardHBS

as an Assistant Professor next academic year! to the sacrifices my family made for me + their support… #HBS #FirstGen + my advisors who made this dream possible #AlRoth

@MurielNiederle

@LaurenceCBaker

@MichelleM_Mello

@I_am_NickBloom

@SIEPR

@Stanford

And earlier (in October)

Welcome to the club, Alex.

Three way liver exchange in Pakistan, reported in JAMA Surgery by Salman, Arsalan, and Dar, in collaboration with economist Alex Chan

 Here's an exciting account, just published in JAMA Surgery, of a three way liver exchange in Pakistan, achieved in part by collaboration with economist and market designer Alex Chan (who is on the job market this year).

Launching Liver Exchange and the First 3-Way Liver Paired Donation by Saad Salman, MD, MPH1; Muhammad Arsalan, MBBS2; Faisal Saud Dar, MBBS2, JAMA Surg. Published online December 7, 2022. doi:10.1001/jamasurg.2022.5440 (pdf)

Here are the first paragraphs:

"There is a shortage of transplantable organs almost everywhere in the world. In the US, about 6000 transplant candidates die waiting each year.1 In Pakistan, 30% to 50% of patients who needed a liver transplant are unable to secure a compatible donor, and about 10 000 people die each year waiting for a liver.2 Kidney paired donations, supported by Nobel Prize–winning kidney exchange (KE) algorithms,3 have enabled living donor kidneys to become an important source of kidneys. Exchanges supported by algorithms that systematically identify the optimal set of paired donations has yet to take hold for liver transplant.

"The innovation reported here is the successful implementation of a liver exchange mechanism4 that also led to 3 liver allotransplants and 3 hepatectomies between 3 incompatible patient-donor pairs with living donor–patient ABO/size incompatibilities. These were facilitated by one of the world’s first documented 3-way liver paired donations (LPD) between patient-donor pairs.

"Since 2018 and 2019, we have explored LPD as a strategy to overcome barriers for liver failure patients in Pakistan in collaboration with economist Alex Chan, MPH.2 With LPD, the incompatibility issues with relative donors can be solved by exchanging donors. The Pakistan Kidney and Liver Institute (PKLI) adopted a liver exchange algorithm developed by Chan4 to evaluate LPD opportunities that prioritizes clinical urgency (Model for End-stage Liver Disease [MELD] scores) while maximizing transplant-enabling 2-way or 3-way swaps that ensures that hepatectomies for every donor within each swap has comparable ex ante risk (to ensure fairness). As of March 2022, 20 PKLI liver transplant candidates had actively coregistered living and related but incompatible liver donors. Evaluating these 20 incompatible patient-donor pairs with the algorithm,4 we found 7 potential transplants by two 2-way swaps and the 3-way swap reported. In contrast to ad hoc manual identification of organ exchange opportunities, the hallmark of a scalable organ exchange program is the regular deployment of algorithms to systematically identify possible exchanges. Regular deployment of LPD algorithms is novel.

"A total of 6 procedures took place on March 17, 2022. Patient 1, a 57-year-old man, received a right liver lobe from donor 2, a 28-year-old coregistered donor of patient 2 (56-year-old man), who in turn received a right liver lobe from donor 3, a 35-year-old woman who was a coregistered donor of patient 3. Patient 3, a 46-year-old man, received a right liver lobe from donor 1, a 22-year-old woman who was a coregistered donor of patient 1, completing the cycle (Figure). Five PKLI consultant surgeons and 7 senior registrars led the hepatectomies and liver allotransplants; 6 operating rooms were used simultaneously. One month postsurgery, all patients and donors are robust with no graft rejection. All the donors are doing well in the follow-up visits and have shown no psychological issues."

Here's a sentence in the acknowledgements:

"We thank Alex Chan, MPH (Stanford University, Palo Alto, California), whose initiative and expertise in economics were the key driving forces for launching liver exchange."

*********

NB: this is a "Surgical Innovation" article, for which the journal requires that there be no more than three authors.

And here are the references cited:

1.

Chan  A, Roth  AE. Regulation of organ transplantation and procurement: a market design lab experiment. Accessed April 28, 2022. https://www.alexchan.net/_files/ugd/a47645_99b1d4843f2f42beb95b94e43547083b.pdf

2.

Salman  S, Gurev  S, Arsalan  M, Dar  F, Chan  A. Liver exchange: a pathway to increase access to transplantation. Accessed April 1, 2022. http://www.hhpronline.org/articles/2021/1/14/liver-exchange-a-pathway-to-increase-access-to-transplantation

3.

Henderson  D. On marriage, kidneys and the Economics Nobel. Wall Street Journal. October 15, 2012. Accessed March 5, 2022. https://www.wsj.com/articles/SB10000872396390443675404578058773182478536

4.

Chan  A. Optimal liver exchange with equipoise. Accessed April 23, 2022. https://www.alexchan.net/_files/ugd/a47645_36e252f4df0c4707b6431b0559b03143.pdf

5.

Hwang  S, Lee  SG, Moon  DB,  et al.  Exchange living donor liver transplantation to overcome ABO incompatibility in adult patients.   Liver Transpl. 2010;16(4):482-490. doi:10.1002/lt.22017PubMedGoogle ScholarCrossref

6.

Patel  MS, Mohamed  Z, Ghanekar  A,  et al.  Living donor liver paired exchange: a North American first.   Am J Transplant. 2021;21(1):400-404. doi:10.1111/ajt.16137PubMedGoogle ScholarCrossref

7.

Braun  HJ, Torres  AM, Louie  F,  et al.  Expanding living donor liver transplantation: report of first US living donor liver transplant chain.   Am J Transplant. 2021;21(4):1633-1636. doi:10.1111/ajt.16396

 ********

Here's a Stanford story on this collaboration:

Stanford student devises liver exchange, easing shortage of organs. A rare three-way exchange of liver transplants in Pakistan was made possible with a new algorithm developed by a Stanford Medicine student.  by Nina Bai

"The liver exchange idea actually came out of a term paper in a first-year market design class at Stanford," Chan said.

"As he learned more about liver transplants, Chan realized there were important biological and ethical differences from kidney transplants. 

...

"Instead of just finding compatible swaps, we want to find swaps that prioitize the most urgent patients first in order to prevent the most deaths," Chan said.

*******

Here are some contemporaneous stories from March in the newspaper Dawn (now that the JAMA embargo on the story is lifted):

Liver transplants at PKLI under 'swap' plan - Newspaper - Dawn

Mar 18, 2022 — A highly-trained team of the surgeons headed by PKLI Dean Prof Faisal Dar had performed liver transplants at the institute and other members ...

• First swap liver transplant surgeries at PKLI today - Dawn

  
  

  Mar 17, 2022 — An official told Dawn on Wednesday the treating doctors had recommended liver transplant of all the three patients due to their end-stage ...

Pharmacy Benefit Managers--Alex Chan on NPR's Planet Money podcast

 Alex Chan is interviewed on the role of pharmacy benefit managers, their role in drug pricing, and some problems with the market design.

Rising Stars in Market Design, featuring Alex Chan, Aram Grigoryan and Dong Woo Hahm, at the Tokyo Market Design center

 The University of Tokyo Market Design center hosts Rising Stars in Market Design

Alex Chan, Aram Grigoryan, Dong Woo Hahm

Market design course for health policy and medical students, at Stanford, taught by Alex Chan and Kurt Sweat

 Starting tomorrow, a short course in market design:

BIOS 203, Fall 2021: Market Design and Field Experiments for Health Policy and Medicine 

Primary Instructor: Alex Chan chanalex@stanford.edu | Office Hours: By appointment

Secondary Instructor: Kurt Sweat kurtsw@stanford.edu | Office Hours: By appointment

Description. Market design is an emerging field in economics, engineering and computer science about how to organize systems to allocate scarce resources. In this course, we study (1) the theory and practice of market design in healthcare and medicine, and (2) methods to evaluate the impact of such designs. Students will be provided with the necessary tools to diagnose the problems in markets and allocation mechanisms that render them inefficient, and subsequently develop a working toolbox to remedy failed markets and finetune new market and policy designs.

With a practical orientation in mind, we will learn how to construct rules for allocating resources or to structure successful marketplaces through successive examples in healthcare and medicine: medical residency matching, kidney exchange, allocation of scarce medical resources like COVID vaccine and tests, medical equipment procurement, online marketplace for doctors, and, if time permits, reward system for biopharmaceutical innovation. Guest lectures by practicing market designers and C-suite healthcare executives (CEO, CFO) would feature in the course as well.

An important goal of the class is to introduce you to the critical ingredients to a successful design: a solid understanding of institutions, grasps of economic theory, and well-designed experiments and implementation. In the final sessions, students will also learn how to design and deploy one of the most powerful tools in practical market design: A/B testing or randomized field experiments. These techniques are widely used by tech companies like UBER, Amazon, eBay, and others to improve their marketplaces.

At the end of the course, students should have acquired the necessary knowledge to become an avid consumer and user, and potentially a producer, of the market design and field experimental literature (recognized by 4 recent Nobel Prizes in Economics: 2007/2012/2019/2020).

Time & Location.

● Tue, Thu 6:30 PM - 8:00 PM (beginning November 16, 2021) at Encina Commons Room 119

Course Webpage. ● https://canvas.stanford.edu/courses/145148

Schedule and Readings

(* required readings, others are optional)

Session 1. Market design and Marketplaces – November 16

1. * Roth, A. E. (2007). The art of designing markets. harvard business review, 85(10), 118.

2. Kominers, S. D., Teytelboym, A., & Crawford, V. P. (2017). An invitation to market design. Oxford Review of Economic Policy, 33(4), 541-571.

3. Roth, A. E. (2002). The economist as engineer: Game theory, experimentation, and computation as tools for design economics. Econometrica, 70(4), 1341-1378

Session 2. Matching Markets: Medical Residents and the NRMP – November 18

1. * Chapter 1 in Gura, E. Y., & Maschler, M. (2008). Insights into game theory: an alternative mathematical experience. Cambridge University Press.

2. * Fisher, C. E. (2009). Manipulation and the Match. JAMA, 302(12), 1266-1267.

3. * National Resident Matching Program. (2021). Feasibility of an Early Match NRMP Position Statement

4. Roth, A. E., & Peranson, E. (1997). The effects of the change in the NRMP matching algorithm. JAMA, 278(9), 729-732.

5. Gale, D., & Shapley, L. S. (1962). College admissions and the stability of marriage. The American Mathematical Monthly, 69(1), 9-15.

Session 3. Kidney Exchange and Organ Allocation – November 30

1. * Wallis, C. B., Samy, K. P., Roth, A. E., & Rees, M. A. (2011). Kidney paired donation. Nephrology Dialysis Transplantation, 26(7), 2091-2099.

2. * Chapter 3 in Roth, A. E. (2015). Who gets what—and why: The new economics of matchmaking and market design. Houghton Mifflin Harcourt.

3. Gentry, S. E., Montgomery, R. A., & Segev, D. L. (2011). Kidney paired donation: fundamentals, limitations, and expansions. American journal of kidney diseases, 57(1), 144-151.

4. Salman, S., Gurev, S., Arsalan, M., Dar, F., & Chan, A. Liver  Exchange: A Pathway to Increase Access to Transplantation.

5. Sweat, K. R. Redesigning waitlists with manipulable priority: improving the heart transplant waitlist.

6. Agarwal, N., Ashlagi, I., Somaini, P., & Waldinger, D. (2018). Dynamic incentives in waitlist mechanisms. AEA Papers & Proceedings, 108, 341-347.

Session 4. 1 st Half: Repugnance as a Constraint on Markets – December 2

1. * Roth, A. E. (2007). Repugnance as a Constraint on Markets. Journal of Economic perspectives, 21(3), 37-58.

2. * Minerva, F., Savulescu, J., & Singer, P. (2019). The ethics of the Global Kidney Exchange programme. The Lancet, 394(10210), 1775-1778.

3. Chapter 11 in Roth, A. E. (2015). Who gets what—and why: The new economics of matchmaking and market design. Houghton Mifflin Harcourt.

2 nd Half: Market Design and Allocation during COVID-19 – December 2

1. * Emanuel, E. J., Persad, G., Upshur, R., Thome, B., Parker, M., Glickman, A., ... & Phillips, J. P. (2020). New England Journal of Medicine. Fair allocation of scarce medical resources in the time of Covid-19.

2. Piscitello, G. M., Kapania, E. M., Miller, W. D., Rojas, J. C., Siegler, M., & Parker, W. F. (2020). Variation in ventilator allocation guidelines by US state during the coronavirus disease 2019 pandemic: a systematic review. JAMA network open, 3(6), e201

3. Schmidt, H., Pathak, P., Sönmez, T., & Ünver, M. U. (2020). Covid-19: how to prioritize worse-off populations in allocating safe and effective vaccines. British Medical Journal, 371.

4. Schmidt, H., Pathak, P. A., Williams, M. A., Sonmez, T., Ünver, M. U., & Gostin, L. O. (2020). Rationing safe and effective COVID-19 vaccines: allocating to states proportionate to population may undermine commitments to mitigating health disparities. Ava

5. Neimark, J. (2020). What is the best strategy to deploy a COVID-19 vaccine. Smithsonian Magazine.

Session 5. 1 st Half: Auction Design and Procurement in Medicine – December 7

1. * The Committee for the Prize in Economic Sciences in Memory of Alfred Nobel. (2020). Improvements to auction theory and inventions of new auction formats. Scientific Background on the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 20

2. * Song, Z., Cutler, D. M., & Chernew, M. E. (2012). Potential consequences of reforming Medicare into a competitive bidding system. Jama, 308(5), 459-460.

3. Newman, D., Barrette, E., & McGraves-Lloyd, K. (2017). Medicare competitive bidding program realized price savings for durable medical equipment purchases. Health Affairs, 36(8), 1367-1375.

4. Cramton, P., Ellermeyer, S., & Katzman, B. (2015). Designed to fail: The Medicare auction for durable medical equipment. Economic Inquiry, 53(1), 469-485.

5. Ji, Y. (2019). The Impact of Competitive Bidding in Health Care: The Case of Medicare Durable Medical Equipment.

6. Thaler, R. H. (1988). Anomalies: The winner's curse. Journal of economic perspectives, 2(1), 191-202.

7. Chapter 2 in Haeringer, G. (2018). Market design: auctions and matching. MIT Press.

2 nd Half: (GUEST LECTURE) Ralph Weber, CEO, MediBid Inc. on “The Online Marketplace for Medicine” – December 7

Session 6. A/B Testing and Field Experiments to Test Designs – December 9

1. * Chapters 1, 4 in List, John. (2021). A Course in Experimental Economics (unpublished textbook, access on course website)

2. * Gallo, A. (2017). A refresher on A/B testing. Harvard Business Review, 2-6.

3. Chan, A. (2021). Customer Discrimination and Quality Signals – A Field Experiment with Healthcare Shoppers.

4. Kessler, J. B., Low, C., & Sullivan, C. D. (2019). Incentivized resume rating: Eliciting employer preferences without deception. American Economic Review, 109(11), 3713-44.

5. Chapters 3, 5, 6, 7, 8 in List, John. (2021). A Course in Experimental Economics (unpublished textbook, access on course website)

6. The Committee for the Prize in Economic Sciences in Memory of Alfred Nobel. (2019). Understanding development and poverty alleviation. Scientific Background on the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2019.

Bonus Session (optional). (GUEST LECTURE) Donald Lung, CFO, Antengene on “Designing Markets to Access Biopharmaceutical Intellectual Property Across Regulatory Regimes – the Case of China” – Date TBD

Bonus Session (optional). (GUEST LECTURE) TBD – Date TBD