Our private sector medical community allocates organ donations taking into account the years of healthful life to be obtained for the recipient.  There are 10 waiting liver recipients for each liver.  To match need with scarce availability, the health of the donor and waiting recipients are very carefully considered.  Would-be recipients who are too ill to survive the transplant are ineligible.  Likewise, would-be recipients whose behaviors or other illnesses (e.g. cancer in another organ) would jeopardize success are excluded.  Potential liver transplant recipients who are practicing alcoholics or illegal drug users would most likely be ineligible as recipients.  It’s a medical issue – not a matter of public opinion.  These people can usually restore their eligibility by going through detox and demonstrating they are no longer dependent on drugs or alcohol.

At any one instant, about one-third of the waiting organ recipients are ineligible for one reason or another: they may be too sick; or may have enjoyed a partial remission of the underlying disease; they may be unlikely to benefit much, or they may be trying a treatment other than transplant.  They can become eligible again if they attend to those reasons.  If donated livers were not in scarcity, the criteria for screening recipients would be less stringent, as the “shadow cost” of a poorly allocated liver would not be death for some other waiting recipient.  Too much is at stake for donation programs to ignore recipients’ behavior or physical condition.

Be thankful that organ donations are not government-managed like the National Flood Insurance Program (NFIP).  The federal government’s General Accounting Office concludes that this federal program is not structured to behave like an insurer: it is unattractive for reinsurers to backstop; it cannot reject high-risk or chronic claimants and it cannot adjust rates to cover costs.  In other words, although much is at stake, the “insurance” program ignores risks, risk mitigation and losses.  NFIP’s financial losses look like a vote-buying scam favoring coastal residents at the expense of all other taxpayers in “flyover” country.

Pooling of flood risks is a rational idea.  It can be done by the private sector or by a government agency provided they assess each risk, price the exposure accordingly, and demand reasonable risk mitigation (construction standards that prevent loss, and a ban on accepting exposures that are frequent with calamitous losses).

The use of taxpayer money for national flood insurance subsidies is an outrage, and worse is the refusal to impose meaningful risk mitigation.  Pricing at or above actual cost and the imposition of mandatory risk mitigation would pull in private sector insurers to compete against taxpayer funded losers like NFIP.  The compelling difference in motivation between organ transplant allocation and national flood insurance is that one administrative body treats organs as a scarce resource and the other administrative body treats taxpayer money as plentiful commodity – leading to calamitous results.

Alan Daley is a retired businessman living in Florida who follows public policy issues from a consumer’s perspective.