President Trump Delivers Lifesaving Deregulation

Steve H. Hanke

How many of you noticed the most life-changing story of the week? Yesterday, President Trump made a stunning speech announcing regulatory changes that will save thousands of American lives each year.

As the President noted, roughly 100,000 Americans with kidney disease are awaiting a transplant from a donor. About 20,000 Americans are awaiting transplants of other organs.

These estimates are, if anything, on the low side. Indeed, there are many people who never bother with the transplant waiting list because, under the current system, their prospects of receiving a transplant are so low. Last year, there were about 21,000 kidney transplants in the United States, but the transplant waiting list has remained stuck in the 90,000 to 100,000 person range for some years. If you are old, or even a young person in frail health, you won’t receive a kidney. Donor kidney’s are reserved for more “deserving” recipients. Shockingly, it’s estimated that 43,000 Americans die prematurely each year because they don’t receive a life-saving kidney transplant. For context, this exceeds the number of people who die in car accidents each year.

The shortage of kidneys and other organs is substantially, and probably fully, the fault of inhumane government regulations. The federal government has regulated national organ procurement since the National Organ Transplant Act of 1984. Since then, the waiting lists have increased in length.

The shortages of kidneys and livers, the second most needed organ, are especially sad. After all, an adequate supply is readily available. Unlike other organs, kidneys and livers can be donated by living persons, who, after their donation, can continue to lead normal lives. Recently, Fox News correspondent Ed Henry announced that he will donate part of his liver to save the life of his sister with liver disease. He not only anticipates saving the life of his sister, but also leading a normal life after the donation.

President Trump’s life-saving executive order is multipronged. The change that will probably save the most lives is the provision that allows for reimbursement of organ donors’ lost wages and childcare expenses. Currently, organ donors spend money out of their own pocket and time to donate. My good friend and longtime collaborator donated one of his kidneys several years ago. For his efforts, which included traveling to a distant hospital and undergoing multiple tests and interviews, he received free parking at the hospital’s garage and a free lunch at the hospital’s cafeteria. In the process, he burned up a significant portion of his annual leave time.

The reimbursement provision that is contained in the executive order will offset some of the donors’ costs. Accordingly, the provision will substantially increase the supply of kidneys. It also makes excellent economic sense. Kidney dialysis costs $76,000 or more per year and can last for years while a patient slowly works to the top of the kidney transplant waiting list – or dies first. By avoiding the heavy costs associated with dialysis, transplantation has a very rapid payback period of less than two years. In consequence, the expansion of the supply of kidneys will save the federal government, which pays the expenses of dialysis for patients not covered by private insurance, billions of dollars a year.

President Trump’s actions go near the edge of what current law allows. As I wrote in a December 2018 Forbes column, the federal government should go further. It should allow compensation to donors in addition to the payment of lost wages and expenses. Reasonable levels of compensation should be enough to eliminate the shortages of kidneys and livers entirely. This would require action by the Congress to reform the National Organ Transplant Act.

Deregulation has been one of the major, and usually underreported, successes of the Trump administration. Trump is the first president since Ronald Regan to pursue a broad deregulatory agenda. A proxy measure of regulatory activity is the number of pages on new regulations published in the Federal Register. In 2016, Barack Obama’s last year as president, the page count reached a staggering 95,894. Under Trump, the page count has fallen to less than 65,000, the lowest page count in about a quarter-century.

Economists often argue for deregulation in terms of money saved. But, once in a while, something more than the pocketbook is at stake. Every president since Reagan could have pushed the deregulatory envelope to save lives, but they didn’t. Well, Trump did it.

Steve Hanke is a professor of applied economics at The Johns Hopkins University and senior fellow at the Cato Institute.