The complex economics of dialysis and insurance, in Freakonomics

 Freakonomics peeks under the rocks to see what crawls out:

Is Dialysis a Test Case of Medicare for All? (Ep. 457)  by Stephen J. Dubner

"But as he dug into their business, he discovered what looked like a suspicious relationship between the two dialysis chains and a charity called the American Kidney Fund, whose mission is to provide financial support to needy patients.

CHANOS: So, the American Kidney Fund will help various patients pay for private policies. 

Private insurance policies, that is, instead of Medicare.

CHANOS: The patient is strongly urged because of quality of care, convenience, whatever the case might be, that they will be treated better as a commercial-policy patient rather than a government-policy patient and that the American Kidney Fund could help them pay those premiums.

On its surface, that does not sound like a terrible thing for a kidney charity to do. But Chanos looked at it from the perspective of the dialysis industry.

CHANOS: If the dialysis companies could push people that would normally be eligible for Medicare into commercial policies, private policies, they could charge those companies often two to four times what the going Medicare reimbursement rate was.

And Chanos believed that pushing people onto commercial insurance is exactly what the American Kidney Fund was doing. It’s helpful here to follow the money.

CHANOS: It will come as probably no shock that the two largest donors to the American Kidney Fund are the two largest dialysis companies, Fresenius and DaVita. 

In 2018, DaVita and Fresenius reportedly donated a combined $247 million to the American Kidney Fund — or about 80 percent of the charity’s revenues.

CHANOS: So, they are basically putting money into the charity. The charity is turning around and using that money to help pay premiums to enroll patients in commercial insurance. And then, the commercial insurers are charged a huge premium to what the dialysis companies are charging the government. 

It’s estimated that for every dollar that DaVita or Fresenius send to the American Kidney Fund, they receive $3.50 in return from private-insurance payments.

CHANOS: And that’s the problem. 

One especially interesting part of this arrangement is who’s losing money: the insurance companies! It’s not often you hear about insurance companies on the losing end — and maybe you don’t have much sympathy.

CHANOS: “Well, it’s the private sector, right? So, why should we care if the insurers make less profits?” Well, the fact of the matter is it’s raising premiums for everybody in the exchanges.

That is, the insurance exchanges, the marketplaces created by the Affordable Care Act, also known as Obamacare.

CHANOS: And the head of California Blue Cross Blue Shield was on the record saying that the dialysis in California was driving up private policy rates dramatically"

National Kidney Donor Advocate Conference, on YouTube

 Here's an announcement I received from Ned Brooks, the founder of  NKDO, National Kidney Donation Organization (formerly Donor to Donor).  If I understand correctly, the different talks and interviews will be available at the link after first streaming in conference style, starting at 9am Pacific time. It includes a video of Ned interviewing me.

I'll update this post as necessary. 

"This Wednesday, October 21^st, NKDO, National Kidney Donation Organization (formerly Donor to Donor) will release the virtual National Kidney Donor Advocate Conference. This event is designed to give volunteer living donor advocates the information they need to be more effective advocates for living donation. Transplant industry experts across the country will be presenting to you and delivering invaluable advice about their area of expertise.

The conference will stream on our YouTube channel beginning at 12:00 noon Eastern this Wednesday. The conference will be in segments and accessed through the “playlist”, either streaming as one event or accessed at different points in the conference. The link is  https://www.youtube.com/channel/UCsoS-yavRQCVl7bwcjT2iCA , which will go live at noon Eastern on Wednesday.

- Have you ever wondered about the transplant surgeons who do the surgery? What they are thinking and what they would like you to know? Dr. Joshua Mezrich, transplant surgeon at UWMadison and author of “When Death Becomes Life: Notes from a Transplant Surgeon” talks about his experience with organ donors and recipients.

- Are you a living donor or a transplant recipient, or expecting to be one? Do you remember the experience of being evaluated at the transplant center and listening to all the information, and maybe feeling a little overwhelmed? Living Donor Coordinator Marian Charlton and Patient Coordinator Janet Hiller are two of the most respected voices in transplant, and they will tell you what they want you to know to better understand the process. Anyone who goes through this experience or has a loved one in transplant will want to see these segments.

- Living kidney donors deserve all protections available, from reimbursement for out-of-pocket costs and lost wages to medical coverage for medical issues that may arise months or years after donation. Garet Hil, founder and CEO of the National Kidney Registry, talks about the suite of protections available to living donors through Donor Shield.

-  Are you a kidney patient in need of a donor? Harvey Mysel, a two-time kidney recipient and founder and CEO of the Living Kidney Donor Network, talks about how to have your kidney donor find you.

- Professor Alvin Roth won the Nobel Prize in Economics for his work creating the algorithms that contributed to the creation of the “kidney chain”, a development that transformed kidney transplant procedures. Prof. Roth discusseshis work and the business known by the intriguing moniker of “repugnanttransactions.”

- All kidney patients will benefit by watching nephrologist Dr. David Serur talk about kidney disease and what every kidney patient and advocate needs to know to be properly informed about how to deal with renal disease. 

- Non-directed, or altruistic, donors are a rare breed, though we are trying to change that. No one knows the brain of the non-directed donor better than Professor Abigail Marsh, who has been studying non-directed donors for years. If you want to better understand why someone will happily donate a kidney to a stranger, this presentation will help answer that question.  Prof. Marsh is the author of “The Fear Factor: How One Emotion Connects Altruists, Psychopaths, and Everyone In-Between.”

- If you listen to podcasts, you are probably familiar with “Freakonomics” and its creator, Stephen Dubner. It was the Freakonomics interview with Prof. Roth that set Donor to Donor and NKDO into motion, and our interview with Mr. Dubner will interest anyone who understands “the power of the pod”.

- Jim Gleason is a heart transplant recipient and the president of TRIO, Transplant Recipients International Organization. Mr. Gleason is a motivational speaker who asks the question, “Are you a cookie monster?”

Here's the video of my video

Freakonomics on legalizing prostitution

Should Prostitution Be Decriminalized?, a thoughtful post on the subject at Freakonomics.

Celebrating Ramanujan's birthday (with some math quotes)

 Yesterday, 22 December, is celebrated every year as National Mathematics Day in India, in honor of the 1887 birthday of the great Indian mathematician Ramanujan.

Here are some quotes about math in honor of the day, in the Indian periodical RepublicWorld.com

Mathematics Day: Here are some of the most inspirational Happy Mathematics Day quotes on Ramanujan's birthday to honour this special occasion.  By Vageesha Taluja

Not included in that collection of quotes is this one, attributed in Wikipedia to Ramanujan himself: "An equation for me has no meaning unless it expresses a thought of God."

I was pleasantly surprised to see included something much more prosaic that I  was quoted as saying, in a 2010 profile in Forbes magazine called Un-Freakonomics, by Susan Adams: 

"I've always been interested in using mathematics to make the world work better." -Alvin E. Roth

A proliferation of penny auctions

Last year I thought about blogging about Swoopo, the "entertainment shopping" site that is run as an "all pay" auction for consumer goods, in which all bidders must pay to bid, but only the winning bidder receives the object. But soon enough there were excellent posts on the subject by others. I particularly like Ian Ayers at Freakonomics, who explained how Swoopo is similar to the "escalation auction" proposed years ago by Martin Shubik, which has become a staple demonstration in game theory classes, and Tyler Cowen at MR, who observes that Swoopo auctions can make a lot of money for the owners of the site, while most of the bidders lose. He writes "In short, swoopo is about as close to pure, distilled evil in a business plan as I've ever seen. " (emphasis in original). And here's the Wikipedia entry.

Swoopo bidders are a bit of a puzzle of the behavioral economics kind: are they like buyers of lottery tickets, who know that they will likely lose but find entertainment value by purchasing the right to dream (see this paper by Emily Oster)? Or are they making mistakes? And if the latter, will demand for this kind of auction dry up? Or will new suckers keep appearing?

But there are other, market level questions we can ask, and I got the beginning of an answer when I did a google search on "swoopo", or another search on "penny auction" . You'll find two things if you click on those searches: there are now a lot of similar auction sites, and there are also plenty of people who are eager to sell you software to set up your own "penny auction," as these sites have come to be known.

(BidRodeo's icon is a man on a bucking bronco, over the motto "Hold on the longest and win!")

What are the questions to which those observations are the beginnings of answers? I guess one is, "is it easy to earn outsized rents by selling to the gullible?". I presume most of the new sites make very little money. Whether they also attract away swoopo's customers or otherwise reduce swoopo's rents remains to be seen.

A new (job market) paper by Edward Augenblick at Stanford suggests that the already-established penny auctions may not disappear in the blink of an eye: Pay-As-You-Go: Theoretical and Empirical Analysis of a New Auction Format

He finds Swoopo to be quite profitable, and the abstract concludes:
"Finally, I attempt to address the long-term prospects of the market for these auctions. Using high frequency auction supply and user data, I estimate the current and optimal supply of auctions for a given number of users. This analysis suggests that the structure of the auction creates barriers to quickly developing a large userbase, allowing the most-established competitor to continue making large profits in the medium-term. This analysis is supported by auction-level data from five competitors. "

HT Eduardo Azevedo and Muriel Niederle

A Freakonomics listener was inspired to become a non-directed kidney donor by the podcast on kidney exchange

In June, 2015, right around the time my book Who Gets What and Why was published, Steven Dubner and his team at Freakonomics published a podcast called Make Me a Match, in which he interviewed me and others about kidney exchange, among other things. Now, in a new podcast, Dubner interviews a listener named Ned Brooks who was inspired by that interview to become a non-directed kidney donor and start a kidney exchange chain. In fact, not only does Dubner interview the donor, he interviews the woman who received his kidney, and in fact introduces the two of them for the first time. Pretty dramatic stuff.

Here's the link to the podcast, where you can (both) listen to it and read the whole transcript.

Ask Not What Your Podcast Can Do for You, February 25, 2016 by Stephen J. Dubner

Below is the part of the transcript that has to do with kidney donation and transplantation. If you read it through, I predict you'll be moved (at one point Dubner says he's crying, so at least he was moved), and if you get to the end you'll find out about a new organization that Brooks has established to help find new donors for people who need them.

"Let me introduce you now to Ned Brooks.

DUBNER: Ok. Hello, Ned?

NED BROOKS: Stephen, how are you?

DUBNER: Hey! Great, how’re you? Nice to meet you.

BROOKS: Nice to hear you.

DUBNER: Thanks for doing this, the interview, but doing the actual deed.

BROOKS: It was a very easy thing to do.

Ned Brooks is 65 years old.

BROOKS: I live in Norwalk, Connecticut. I’m semi-retired after a couple of careers, on Wall Street and in real estate.

He’s been married for 34 years. Three grown children. One day last year, Brooks was in his car.

BROOKS: And we were listening to your podcast about Alvin Roth, the Nobel Prize winner in economics who created a model to trade indivisible items without the use of money. And I think he was talking about houses at the time, but it seems to work very well for the kidney chain as well.

The episode was called “Make Me a Match.” Al Roth was describing how he and others had created a series of algorithms that helped match people in need of a kidney transplant with potential donors

BROOKS: And I listen to the podcast with growing interest because what came through to me about the power of the kidney chain, as somebody with a business background, is the concept of leverage. That one altruistic donor — and an altruistic donor is someone who gives a kidney without having anybody particular in mind to receive it. And it provides a lot of options for the people who put these things together, to start a kidney chain. And that results in a sequence of transplants that can affect a lot of people.

DUBNER: Now, have you ever considered giving a kidney before then?

BROOKS: No, no I did not.

DUBNER: And what was it about, about the message from Al Roth in that podcast that either, kind of, alerted you? What did you learn, or what changed your mind that made you start to think about that, then?

BROOKS: Well, the concept that we have two kidneys and we only need one.

DUBNER: Now did you know that ahead of time, or not really?

BROOKS: Yes, I did know that much. What I did not know is all the benefits that accrues to one who donates a kidney. The process is lengthy in terms of the amount of testing that you go through to do so. But …

DUBNER: Now, you’re saying that the medical tests were the benefits?

BROOKS: Oh, absolutely.

DUBNER: I just want to clarify here.

BROOKS: Absolutely. Look, you get many thousands dollars of testing for free.

DUBNER: Can I just say something, Ned? I think you and I are fundamentally different people, because if I were going to get several thousands of dollars worth of something free I would want it to be, you know, golf, or something, fishing boat. Not medical testing, but tell me more about your great desire …

BROOKS: Well, you’re not 65, and knowing that all your organs are free of any contaminants is a very reassuring thing, actually.

Let me be clear. It wasn’t really all the free medical testing that made Brooks want to become a kidney donor.

BROOKS: I think this is something I have to do. It required some thought, discussion with my wife that day in the car. I spent one restless night, probably about three hours trying to understand what my own motivations were and if they were the right ones to be doing this. And once I put that to rest, then it was a very easy thing to do.

DUBNER: Did you decide immediately to become a non-directed donor? Meaning that your kidney would be available for anyone who needed it? Or, did you think about trying to help someone in particular?

BROOKS: As great as it would be to help someone in particular, I didn’t know anyone who needed a kidney. And in fact, the leverage comes from being an altruistic donor. You can’t start a kidney chain unless you’re altruistic about it.

DUBNER: Let’s say I need a kidney and my wife is willing to donate or someone else in my family is willing to donate, but they’re not a match. They’re not a physiological match for me. But they would donate a kidney of theirs to someone else who is a match. They then enter the chain, correct?

BROOKS: So, call them “Couple A.” And Couple B is in the same situation as is Couple C, D, down the line.

DUBNER: But then there is this wildcard, X, that’s you. This guy who comes in that doesn’t have anyone that needs one, that just wants to give. Does that make you much more valuable?

BROOKS: That makes me valuable because it allows the algorithm to maximize the length of the chain and kick it off. If you didn’t have the altruistic donor to start, you’d have to have a perfect match. 

DUBNER: Talk about the procedure, working with the hospital, and talk about how the relationship works so that you are not made to feel that you’re being pressured.

BROOKS: Sure. In my case, I had the operation done at New York-Presbyterian. And I chose New York-Presbyterian because they do a lot of these operations. And I think that with any surgery like this you want to go to a place that does a lot of them. And so I was very comfortable with their record. They’ve never lost a donor yet. They provide you with two advocates. And those advocates are there to protect your interest throughout the process. And you go in for testing, you do it through your advocate, you go in for psychological testing, physical testing. They want to make sure you are financially able to this, because, of course, you cannot be compensated for a kidney donation.

DUBNER: To what degree did they push back? In other words, to what degree did they try actively to discourage you or at least make you take a step back and think it through a little bit more?

BROOKS: They didn’t actively discourage me.  The psychiatrist probed quite a bit. But after I seemed to have satisfied her on the answers, that was the end of it.  What they will not do is they will not come after you to keep you coming to hospital for every procedure that needs to be done. In other words, they set the time and the date for your next appointment, and they won’t call you. It’s up to you to make sure that you’re there.

DUBNER: Oh that’s interesting, yeah. And at no point did they catch on to the fact that you were just in it for the free medical testing?

BROOKS: Actually, actually yes. The doctor I spoke with there said, “This is a little-known secret, but the testing is so good that everyone should at least start out to be a kidney donor and find out how their tests go.”

DUBNER:  That is a secret that I’m guessing they really don’t want broadcast. Because I can see an army of senior citizens flooding in for their tests saying, “You know, I think I’m going to hang on to this — to the other kidney.”  And then talk to me about your family’s response.  Was everyone on board?

BROOKS: My wife was supportive. As I said, I have three children. One was very supportive, one was skeptical, and one was opposed. And I guess that’s what you get when you get three children. But the skeptical one, and the one who was opposed, turned around once they felt like they got a lot more facts about it.  It’s a very safe procedure relative to surgery, in general. And once they understood that, then I think their reservations went away.

DUBNER:  I understand you wrote a letter to your family when you had gotten pretty far along in the process. By then you’d undergone some of the testing?

BROOKS: Yes, yes.

DUBNER: Do you happen to have that letter handy?

BROOKS: Actually, I do have it here.

DUBNER:  If you don’t mind giving that a read, that would be great.

BROOKS: Sure. This is a letter that I wrote to my family when I realized that it was what I wanted to do, and I wanted to inform them all at the same time. So, I sent them an email and it goes like this:

All, as you have commented upon, I have had a number of medical tests over the summer. I did not fully answer your questions about those because I wanted to wait until I had cleared all the tests. I’m happy to report that I’m about as healthy as is possible for a 65-year-old male to be.  

Back in the spring, I was listening to a Freakonomics podcast about a man who won the Nobel Prize in economics for constructing a model of a market to trade indivisible objects without the use of money. He was thinking about houses, but it turns out that the model works very well for other things. His work had been used to create an extensive network for the matching of kidney donors and recipients. The more I listened to the podcast, the more fascinated I became as I learned that just one altruistic donor — a person who donates without a targeted recipient — can launch a chain of kidney transplants that can number as high as 43.

I spoke with the National Kidney Foundation and learned more about the process. I registered as a potential donor and began extensive series of tests at New York-Presbyterian, which have now concluded with me be being accepted as a kidney donor.

So why am I doing this? Many of our friends and acquaintances have had their share of health challenges in recent years. It is mightily frustrating to watch the pain and suffering and be unable to give any help. I, on the other hand, am in perfect health. I have no need for my second kidney, and I appreciate that my actions may greatly benefit the lives of not just the recipients of those kidneys but their entire families. Without it being too much of a stretch, my one wholly redundant organ can potentially change and improve the lives of hundreds of people.

There were 5,355 kidney transplants from living donors last year, and there are over 100,000 people on the wait list right now for a kidney.  The operation is several hours. They start about 3 a.m. in order to catch the morning flights around the country, particularly Los Angeles. L.A. does more transplants than any place in the country, and New York-Presbyterian does the most east of the Mississippi. They’ll have me walking that same day, and I should stay two days in the hospital. I’ll be uncomfortable for two weeks, and fully recovered after four weeks. The operation is laparoscopic, with a single incision in the abdomen. I’ve been working hard with my trainer on my abs.

My advocate tells me that because I am blood type O, a universal donor and an altruistic donor, I will light up computer screens across the country when they list me tomorrow. I am happy to report that Mom is fully on board with this. I could go on for a while, but I think you have the picture. If you have interest in hearing the podcast that inspired me, you can find it here and the short Freakonomics blog on the subject here. Let me know if you have any questions.

Love you all, Dad.

The left kidney that Brooks donated wound up launching a three-recipient chain.

BROOKS: I knew nothing about my recipient until the day of the surgery when I was told that it was a 37-year-old female in Denver area and that she was very, very sick and unlikely to find a donor anytime soon. And that this was a real one-in-a-million match.

DUBNER: Did you know anything about the cause of her illness? And would that have mattered to you if you did know?

BROOKS: No, I had no idea.

DUBNER: Look, you’re not getting paid; you might get thanked, you might not get thanked. You’re doing this for your own set of reasons. Was it important to you that that person appreciate those reasons, or appreciate you? Or did it not really work that way for you?

BROOKS: This is where the leverage comes in. They ask that same question in the initial stages in a little bit different way. What they ask is, “If something happens to your recipient, how upset are you going to be?” Quite frankly, my answer was, “This is multiple people who are getting a transplant because of what I’m doing. And if one of them doesn’t work out, I’m terribly sorry, but it’s going to change the lives for all the others.”

DUBNER: So Ned, you learned a little bit about your recipient, and from what I understand, you’ve been in contact — you’ve received a letter from her — is that right? Expressing her thanks?

BROOKS: The way this works is I go through my advocate at the hospital writing a letter to the recipient that goes through the advocate at her hospital to her. Then if she chooses to do so, she comes back to me with whatever she wants to say. And then through the advocates I go back and disclose my identification, then she does that back to me if she wants to. And that’s the way it worked. And we’ve exchanged emails. And I’ve gotten Christmas cards and such from her family, and so forth.

DUBNER: So you haven’t met with her or spoken with her by phone?

BROOKS: I have not met or spoken to her.

DUBNER: OK so, here’s the story. I believe that if technology has served us well that she’s on the other line right now. Danielle from Centennial, Colorado.

BROOKS: Oh my god!  I’ve not spoken to her yet! This would be great.

DUBNER: Danielle, can you hear us? This is Stephen Dubner.

DANIELLE SHAFFER:  Hi, I can hear you guys.

BROOKS: It’s Ned.

SHAFFER:  Hi Ned.

BROOKS: Hi.  

SHAFFER: How are you doing?

BROOKS: I’m doing great.

SHAFFER:  Good, good. This is exciting.

BROOKS: This is very exciting. It’s great to hear your voice. How are you feeling?

SHAFFER:  I’m doing good! I’m feeling real good. Lately it’s been a struggle since the surgery but I’m doing good. A lot better than I was.

BROOKS: Are you on lots of meds?

SHAFFER:  Yeah, unfortunately, I’ll have to be on a ton of meds for probably the rest of my life.  

DUBNER: Hey Danielle, this is Stephen. Can you tell us a bit about what led to your need for the kidney?

SHAFFER: Sure, sure. It all started October 8, 2014. I had received a call from my doctor saying that my blood work had come back — I’d gone to my regular doctor just because I was having a severe headache that wouldn’t go away. And so they did some blood work, they called me the next day and said, “You need to get to the hospital immediately.” They were telling me creatinine was at a 12 and I had no idea what that was. And so, I went to the hospital and was immediately hospitalized for the next 15 days, getting biopsies and MRIs and plasma freezes and dialysis and getting all these tubes put in my neck and chest. It just all happened so fast. To this day, they still don’t have any reason. It happened three weeks after I had my son but they don’t want to associate it to that. So they really have no answers of why this all happened to me.

DUBNER: And what was your, a) I guess, prognosis? Did they think that you would survive? And what was your prognosis for getting a donated kidney?

SHAFFER: Well, when I was hospitalized and they had no answers, and they were functioning a small part, but they said that they were failing. But they had hope — since they really had no idea what was going on with me — that they would kind of kick back in and restart themselves. So we kind of just waited and I started dialysis and everything. And while we were waiting for those next couple months, I actually tried acupuncture for, you know, organ treatment, specifically for that. You know, I was trying everything. And I said, you know what, I’m not going to wait any longer for them to restart. I better get on this transplant list now. So, come January of 2015, I started the process of getting on the transplant list. And starting there.

DUBNER: And what were you told about how long that would likely take you to get you a donated kidney?

SHAFFER: Well, it came back that I had antibodies in my blood from blood transfusions that I had during the hospitalization, and from having children they said I had created all these antibodies. So it made me a very rare match for  — I wasn’t a match to any of my family and so they said because of my rare antibodies I could possibly be on the list five or six years. So that’s the kind of range they gave me back in January of 2015. That, I was looking at five-to-six years being on dialysis.

DUBNER: Wow. How long was it before you heard that there was a donor?

SHAFFER: Well, it was probably come May of 2015 that I started getting word. Me and my father, we decided since I was having such a hard time and nobody in my family matched with me, my father really wanted to donate on my behalf. So we heard about the paired-donor program through the hospital and he wanted to donate his kidney on my behalf. So, it was probably around May of 2015 that we started the chain process. I had several chains lined up throughout the summer of 2015 but it kept falling through due to scheduling with some part of the chain — it kept falling through. So I had many chains lined up throughout the summer, and it was finally in August that we found — I guess Ned was matched to me, and we got the surgery date of September 22, and it kind of just happened really quickly from there.

DUBNER: Way to go, Ned.

BROOKS: Thanks.

DUBNER: What’s it feel like for you, Ned, hearing Danielle talk now? She’s obviously in a much better situation today with your kidney in her than she would be without. So what’s that feel like to hear her on the other end of the line?

BROOKS: It’s emotionally very powerful. It means a lot. A great deal.

SHAFFER: Yeah, it was a real struggle going through dialysis in the last year. I had to do four hours of treatment three days a week. So basically it took 15 hours out of my time every week. And I would go into a dialysis center. And, the first thing you do is you get checked in and they do your blood pressure, your weight, your temperature. They go through all your symptoms that you’re feeling. There’s really no privacy when they’re doing that — I mean, the next patient is five feet from you in their chair, and you’re talking about all of your bodily functions that are not going well for you with all the medications you’re taking and everything and it takes away a little bit of your integrity having to do that so publicly. And then, just to sit there for four hours doing nothing. I can’t get up, I can’t move. My blood is just sitting there, you’re watching your blood go through this machine and it’s really, really depressing. And, it was hard for me. I mean, I cried the first couple times just because I would sit there and I’d look around and I was the youngest, you know obviously, in the whole building. I was 37 years old. And I was the only one driving myself there. It’s just a really hard and depressing time to spend in your day. It was really hard for me to do because I have two small children as well.  

DUBNER: It’s remarkable. You say you were crying then. Now you sound so strong. Ned’s on the other line blubbering there. I’m on the border, holding it together. So…

SHAFFER:  It’s emotional every time I talk about my story too, so.

DUBNER: I’m curious, you said that your dad had entered the donor chain. Did he end up giving a kidney, and if so does he know who the recipient was?

SHAFFER: He ended up giving his kidney. And all we really know is that it went to Connecticut over there where Ned is, and we have not heard from the recipients on that end.

DUBNER: I have a copy of the letter that you wrote to your donor. It’s unclear to me whether you knew exactly who Ned was at this time. It begins, “To my wonderful kidney donor, I don’t even know where to begin.” And I’ve already started to cry. Sorry. I have nothing to do with either of you and I’m crying. OK. So, but then, toward the end, you write, “Just to let you know, your kidney is doing awesome, and I’m already getting my energy back.” Danielle, what’s it like to have this guy Ned’s kidney inside of you? Do you feel whole again? Do you feel different?  

SHAFFER: You know, it was amazing because the very next day after surgery, I felt incredible. I felt 100 percent different. I didn’t feel any of the symptoms that I was having before with the illness and the nausea and the anxiety and everything I was going through. I immediately felt better. My body felt better, and yeah. I was eating and drinking the foods and liquids I was restricted to for so long, and it’s just — I do have the energy again. It’s amazing how much better I feel. And I don’t know if he had any food habits that I’ve picked up, but.

BROOKS: How do you feel about single-malt scotch?

SHAFFER:  You know, I haven’t had the craving for any scotch. It is funny because we joke about that with my dad because he’s a single-malt scotch drinker too, and we say, “Oh, that person’s probably craving it now.”

DUBNER: Well, Danielle, I’m glad you’re doing better and I hope you continue to do even better.

SHAFFER: Yes, thank you so much. And Ned, thank you so much for everything you’ve done for me and my family.

BROOKS: No need to thank me anymore. Thank you for being such a great recipient, and we’ll be in touch.

SHAFFER:  Yes, we will. Thank you.

DUBNER: Danielle, thanks for jumping on the phone with us. Bye bye.

SHAFFER: Alright bye guys.

DUBNER: Bye. Well, Ned, how do you feel now? See what you’ve done now?

BROOKS: Boy, I was shaking in here. This is really something. She’s a great person.

DUBNER: Well, I know you didn’t do it for the thanks, but thanks!

BROOKS: My pleasure.

Ned Brooks, inspired by his own experience — and the huge need for more kidney donations — is starting an organization to help build more altruistic kidney-donor chains. It’s called Donor to Donor."

*     *     *

Dubner interviews me about kidney sales and such

Repugnance radio* turns out to have two parts, and the second part is a Freakonomics blog post with a link to a podcast (which you can also download free at itunes), in which my voice is heard. Organ transplants are the main subject, from various angles.

Remind me to figure out how to have mood music come on when I speak, as I do in the podcast... (I might choose different mood music...)

If there's a transcript on the web at some point, I'll link to that for those of you who don't have a half hour to listen. 

*The Levitt quote about economists in my earlier post about the NPR broadcast also made it into the podcast...

Auctions of airport slots: dead in the water, again.

The latest news on plans to auction off takeoff and landing slots at NY's LaGuardia airport: DOT scraps auction plan for NYC airports .

NYC's airports are the most congested in the nation, but plans for an auction have been politically troubled from the start (see some of my related earlier posts). What is the nature of the politics? Perhaps some of the airlines that fly in and out of NYC airports actually like the congestion, since it keeps out new competition by preventing airlines that don't presently have any slots from getting any.

Freakonomics has a non-auction suggestion for relieving the congestion: Shut Down LaGuardia.

Organs for transplant: supply and demand

An interesting post at Freakonomics brings to attention a paper in the International Journal of Health Services by Herring, Woolhandler, and Himmelstein titled
INSURANCE STATUS OF U.S. ORGAN DONORS AND TRANSPLANT RECIPIENTS: THE UNINSURED GIVE, BUT RARELY RECEIVE

The subtitle tells much of the story, the paper finds that "16.9 percent of organ donors but only 0.8 percent of transplant recipients were uninsured"

The paper begins with the following story:
"In September of 2005, one of us (Herring), then a third-year medical student, cared for a previously healthy 25-year-old uninsured day laborer who arrived at the emergency department with rapidly advancing idiopathic dilated cardiomyopathy. The patient was ultimately deemed unsuitable for cardiac transplantation.
The decision on transplantation was driven, in part, by realistic concern about the patient’s inability to pay for long-term immunosuppressive therapy and to support himself during recovery. Absent such resources, the likelihood of a successful outcome is compromised (1–4). The clinicians caring for him faced a wrenching dilemma: deny the patient a transplant, or use a scarce organ for a patient with a reduced chance of success. He died of heart failure two weeks after his initial presentation. This tragedy inspired us to examine data on the participation of the uninsured in organ transplantation, both as recipients and as donors."

HT Scott Kominers

Thoughts on 'extreme altruism,' focusing on nondirected kidney donors

Here's an interesting article about altruism, non-directed kidney donors, and the difficulty of studying them (but maybe they are the opposite of psychopaths):
The Selfless Biology of the Extreme Altruist
What is the opposite of a psychopath? What is the limit of human goodness?
by Tanya Basu
(the url is as informative as the headline: https://www.inverse.com/article/28280-kidney-donation-extreme-altruism-can-people-be-selfless)

The article focuses on one particular non-directed donor, but also discusses some altruism researchers (and has a slightly confused view of economics).

Here are some sentences that particularly caught my eye:

"In 2015, Brooks and his wife were on a summer road trip. They were listening to Freakonomics, the NPR podcast spun off from the best-selling pop-economics book, when an episode called “Make Me a Match” came on. It was a profile of the Stanford economist Al Roth, whose Nobel Prize-winning work considered kidney donation matching as an economic market, maximizing its efficiency and potential. Roth’s work was unique because it looked at this unique market as an example of how non-monetary systems could run efficiently purely by matching, no system necessary. Brooks — otherwise a smooth talker — stammers when describing the power of that podcast, saying he felt he’d “been struck by lightning” when he first heard it. He shudders with emotion describing the realization that he, too, should donate his kidney."
...
"By September, he’d matched with a patient on the National Kidney Registry; by November, he’d given up his spare kidney to a total stranger (he later learned her name was Danielle). In February 2016, he founded Donor to Donor which matches non-direct donors with those looking for a kidney, citing his experience as an epiphany in shaping his life’s purpose. Before meeting me at the Yale Club, he’d convinced a potential donor to go through with the operation. He described the feeling of doing so as being something like getting a good grade."

5000 Market Design blog posts and counting

 Peter Coles and I started this blog in September 2008, to help alert students in our market design class at Harvard that market design was everywhere.  Sometime recently I passed the 5000 posts mark.  It turns out I like to blog about market design, broadly construed. And I'm still teaching market design.

The modal tag on my posts turns out to be repugnance, as I've been fascinated by trying to understand which kinds of transactions and markets get social support and which don't. Various design efforts that I've been involved in also have been the subject of multiple posts, with tags like residents and fellows,  school choice, and kidney exchange. 

Some of my favorite posts (from an incomplete series, whenever I manage to get a picture) commemorate dissertation defences. And under a variety of tags (such as market designers) I like to mark when students and colleagues are celebrated or win a prize. (I look forward to writing more of those.)

Less fun is the growing number of posts tagged  RIP, in which I note the passing of people with whom I've intersected, mostly but not always in a market design connection.

In the first years of the blog I allowed comments, but after I got involved in kidney exchange, I had to regularly erase comments--typically sprinkled each night among old posts--that offered to buy kidneys, at unrealistically high prices, phishing for fools. So at some point I shut down comments, noted in this post: August 25, 2018  No comment(s)

Here are ten posts from the last five years that caught my eye as I scrolled through them before giving up on the clunky scrolling device:

September 30, 2020 A modest proposal for the design of presidential debates

March 2, 2018 The Economist discusses repugnant transactions

January 6, 2018 The open culture of academic economics

April 12, 2017 A bridge of life: Global kidney exchange between Mexico and the U.S.

February 21, 2017 Ken Arrow (1921-2017)

Monday, January 30, 2017 Economists as artisans, doctors, entrepreneurs...dentists, engineers and plumbers

December 5, 2016 The human side of kidney exchange: video from NAS (5 minutes)

February 26, 2016 A Freakonomics listener was inspired to become a non-directed kidney donor by the podcast on kidney exchange

March 12, 2016 Lloyd S. Shapley 1923- 2016

May 22, 2015 Mohammad Akbarpour defends his dissertation 

Roger Myerson and Paul Romer on designing nations and cities

Two emininent economists have been thinking about design on the largest of scales.

Roger Myerson thinks about nation building in general, and Iraq in particular, and reflects on the role of political leaders' reputations, for patronage among other things.

Paul Romer thinks about macro-market-design in the form of new "charter cities," to be modeled roughly on Hong Kong.

Here is Roger, in "A Field Manual for the Cradle of Civilization:Theory of Leadership and Lessons of Iraq, " Journal of Conflict ResolutionVolume 53 Number 3 June 2009 470-482. (HT Paul Milgrom)

"Agency incentive problems in government make patronage an essential aspect of statebuilding, and political leaders become fundamentally constrained by their reputations. Democratic competition requires many leaders to develop independent reputations for exercising power and patronage responsibly, which can be encouraged by political decentralization."

Roger then recounts Xenophon's description of the rise of Cyrus (Koresh), the Persian leader.

"The key to Cyrus’s success was his apparent love of justice, which was inculcated by his education and which enabled him to earn the trust and loyalty of a great army. But what kind of justice was it that Cyrus loved so much? It was certainly not justice for poor peasants, whose crops were gathered to support his conquering forces.
What Cyrus loved was justice for the soldiers who served his cause. Apparently Cyrus’s greatest pleasure in life was to judge the valor of troops in battle and to reward them richly for their accomplishments, asking nothing for himself. As a mechanic knows the names of his tools, Cyrus learned the names of all the captains in his army, so that each could be confident of his service being remembered. When everybody recognized Cyrus as the best leader to distribute their booty after a victory, he could take power, first over the multinational coalitional forces and, ultimately, over Asia."


Paul Romer, explains the idea of charter cities here, and in a Q&A at Freakonomics, here: Can “Charter Cities” Change the World? A Q&A With Paul Romer

He argues that to credibly move to better rules, you might have to do some things all at once and start fresh. (He suggests a good place to start would be to have a new Cuban city administered by Canada at Guantanamo Bay, to try to recreate the experience of Hong Kong.)

He too isn't afraid to think big:

"Q. It all sounds great as a theoretical exercise, but honestly, don’t your colleagues tell you that something like this will never happen?

A. They do say this, which is actually kind of ironic when you line it up with the other things they say. They recognize that the construct of a charter city is something that could make everyone better off. They admit that there is no technological or economic constraint that keeps us from building many of these. Then they say that for political reasons, it will never happen. They tell me that you can’t change politics; you can’t overcome nationalism; there is no way for countries to work together to extend the reach of good rules. Then these same economists suggest that we should just stick to business as usual. We should offer conventional economic advice and assume that political systems will naturally follow our advice when we point to something that could make everyone better off. But of course, they have already revealed that they don’t believe this. What’s going on here is a kind of self-censoring. Economists seem to think that we should propose things that are acceptable and that political systems will pursue, but that we should avoid proposing or even discussing things that are controversial or politically incorrect. I think we’d do our jobs better if we just said what’s true without trying to be amateur politicians. "

Romer and Myerson seem to have different views of where economics ends and politics begins.