Introduction

 

In recent decades, there has been an evolution in the perceived role and value of economics. This has been reflected in the rapid growth in the use of economic analysis to try solve many of the issues fundamental to the orderly and efficient functioning of society. The result has been the development of a form of economic “imperialism” [1], where the tools and concepts of economic analysis, such as pricing and scarcity, have been adapted to provide plausible answers to problems in a diverse range of fields previously believed to have no tenable relationship to the activities normally covered by conventional economic theory.

 

One such field is that of health care, where the specialist discipline of health economics has been developed to view medical issues through the perspective of economic thought [2]. Traditionally, there has been a widespread aversion towards the economic evaluation of health related issues, as it was felt that allowing health care, with its central role in the maintenance of human life, to be analysed in the same manner as other goods and services was inappropriate. This view has been especially prevalent amongst many of the individuals and bodies with significant influence in the health care industry, such as medical associations, who have felt that health economics studies were an unwelcome intrusion into their field of expertise. According to the prevailing line of thinking, they were the professionals in this area, and as such, they would know what would be in the best interests of their patients and the industry in general – outside interference, in the form of economic analysis, was therefore to be discouraged.

 

In recent years, two important factors have played a part in creating a gradual change in this type of attitude. Firstly, organisations that finance a large portion of the spending in this industry, such as state health services and private medical agencies (e.g. HMOs and medical schemes), have started to demand measurable value for money. They have insisted on this as part of their efforts to contain the burgeoning pressures imposed on their financial budgets by health care costs that, across a range of countries, have consistently risen at a rate greater than that of the general price index [3]. In order to achieve their objective of value maximisation, economists and other outsiders to the health care field have been brought in to ensure that costs are contained without compromising the overall effectiveness of care provided.

 

Secondly, there has been a change in attitude amongst many medical practitioners, who have realised that some economic tools can help them work more effectively. While economic analysis may not always provide a complete solution to their problems, it does give them additional information pertaining to the conditions they handle, thereby allowing for the development of treatment protocols that more effectively use the scarce resources placed at their disposal. Proof of this acceptance by the medical profession is evident in some of the more prestigious medical journals, where the number of articles of an economic nature, such as cost-effectiveness studies, has increased substantially over time. Overall, this decline in hostility towards economic involvement in health care has proven to be a welcome development, as both economists and medical professionals share the common goal of increasing social welfare, albeit in different ways.

 

In spite of the increased general acceptance of economics, much remains to be done before policy makers accept all the recommendations made to them by the economists whose advice they seek. In part, this is due to the dichotomy of advice that is tendered, as there is frequently a divergence of views and proposed solutions in all fields of economic study, not only in health economics. For example, some issues on which there is no complete agreement include:

-     to what extent should market institutions be relied upon in the production of goods and services, and under which circumstances and to what extent can they “fail”?

-      if a failure is deemed to exist, economists may suggest market oriented failure correction or, alternatively, they may advise state or regulatory direction of the provision and pricing of affected commodity as a more optimal tactic (even though this approach is in itself susceptible to government “failure”).

 

The resulting partial acceptance of market driven economic advice can be illustrated through an examination of the existing structure of the health care industry. While some sectors have become more efficient through the introduction of market based reforms that permit the functioning of competitive forces, other sectors, which are deemed to be inefficient, have not been restructured and remain firmly under the control of public sector bodies. The reason for this situation is not entirely clear, although several explanations have been put forward to explain why it takes longer for recommended changes to be implemented in some sectors of the health care industry than in others. One possibility is that bureaucrats act in their own self interest to ensure that sectors of industry remain under their authority, as this maintains their power and prestige, even if the overall consequences of such actions are detrimental to society – if these sectors were opened up to market forces, their influence would decrease as they would have fewer opportunities to direct the flow of resource distributions. In addition, government policy makers may possibly be unable to adjust as rapidly as their private sector counterparts to technological change, resulting in the retention of policies and structures that, although optimal when introduced, may now be unsuitable for current conditions. Ideally, to benefit from the greater efficiencies offered by technological improvements, policy makers should constantly introduce more modern policies and structures, but as this does not occur rapidly enough, social losses result when people are forced to operate under sub-optimal conditions.

 

One particular sector where policies that could fully exploit the rapid advances made in medical technology do no appear to have been introduced is that of blood transfusion and organ transplantation. At present in South Africa (and most countries of the world), all blood and human organs are voluntarily provided by unpaid donors, who are believed to be motivated by a spirit of disinterested altruism to donate. This system, which has been in operation since the techniques of transfusion and transplantation were first introduced, is considered to be more appropriate in medical, ethical and legal terms than any other possible procurement system, such as the most obvious alternative of allowing people to voluntarily sell their blood and organs. Over time though, several serious flaws that are associated with this system of procuring and allocating components of the human body have become apparent to observers, leading to an increasing belief that radical reforms need to be introduced to the system as it currently stands.

 

The principal problem with the present system is that increasing shortages of these goods have arisen, with demand at any period of time far exceeding the available supply. To compensate, various rationing mechanisms have been introduced to ensure an equitable distribution of these resources, even though none of these measures can claim to be entirely equitable (or efficient). With human organs, for example, potential recipients must meet certain criteria before they can be placed on waiting lists, whereupon they must then wait for variable periods of time (sometimes years) before they may receive an organ. The effect of such rationing is that potential recipients must either endure intense pain and suffering before receiving a transplant or face the risk of dying from organ failure before a suitable organ is made available.

 

Under the current framework, only certain non-profit associations have government approval to procure and distribute blood and organs, with possible competitors being legally prevented from operating in this sector if they are guided by the profit motive. According to most economic theories, such limitations on competition are undesirable as they result in decreased efficiency, which is usually manifested through a combination of lower output and higher prices. Since the free, “gift” nature of these items means that pricing is practically non-existent, the issue of efficiency is reflected mainly through output levels, where lower quantities of blood and organs are available for use at zero price than are actually desired. To increase output would require the introduction of a positive pricing system, to which the competitive market is ideally suited. The effect of such a move would be twofold: firstly, the quantity supplied would probably increase as more people would have an incentive to provide these goods if they were compensated for doing so, and secondly, the quantity demanded would be restrained as wastage would need to be reduced and medically viable substitutes to genuine human blood and organs developed.

 

The primary objective of this thesis will therefore be to examine the feasibility of replacing the current altruistic system with an alternative system run along competitive, market based lines, whereby legally sanctioned trade in blood and human organs will be authorised in South Africa. At present, a wide range of legal barriers and moral objections have been used to oppose the sale of such goods, but it is hypothesised herein that if trade were legalised, then a formerly untapped source of supply may possibly be brought into operation. Furthermore, it shall be shown that with the implementation of proper safeguards, the shortage that currently prevails can be reduced without compromising the medical safety of recipients while simultaneously protecting supposedly naïve sellers from being coerced into irreversible actions without being aware of the full consequences of their acts.   

 

We start with a brief survey of the reasons for engaging in altruistic behaviour, along with an examination of the bodies that make collective altruism possible. We follow with a number of sections that serve as an introduction to the medical and sociological aspects of blood, before moving on to look at the economics of blood transfusion as well as discussing the merits of commercial blood procurement viz. altruistic donation. A similar approach is carried out thereafter on organ transplantation. Finally, there will be some concluding comments, where recommendations will be made as to how some of the issues and problems that have been discussed in this paper may be suitably addressed from a policy framework.

 

Link to:  <Contents>  <Following Section>