Impact?of?the?Dialysis?Industry?on?Kidney?Transplants? ? by? ? Thomas?Kyle?Lawson? ? ? ? ? A?thesis?submitted?to?the?Graduate?Faculty?of? Auburn?University? in?partial?fulfillment?of?the? requirements?for?the?Degree?of? Master?of?Science? ? Auburn,?Alabama? May?14,?2010? ? ? ? ? ? ? ? Copyright?2010?by?Thomas?Kyle?Lawson? ? ? Approved?by? ? Thomas?R.?Beard,?Chair,?Professor?of?Economics? John?Jackson,?Professor?of?Economics? Richard?Beil,?Associate?Professor?of?Economics? ? ? ? ? ? ? Abstract? ? ? ? The aim of this paper is to examine the impact of the kidney dialysis industry on the kidney transplants, both cadaveric and living. This particular topic has not been addressed in formal research dealing with the organ shortage. The intent is to examine the various aspects of the dialysis industry and the relation to transplantation. A cross sectional analysis is used to examine this relationship ? iii ? Acknowledgments? ? ? ? To my friends and family; your impact may not be known or visible, but I assure you that it has been substantial. I thank everyone that guided me through my education. Dr. Finck and Dr. Ault for sparking an interest in economics. Those helping with this thesis directly: Dr. Beard for the inspiration of this topic, Dr. Jackson for guidance with the empirical aspects, and Dr. Beil for advice and guidance through graduate school. iv ? Table?of?Contents? ? ? Abstract ............................................................................................................................... ii Acknowledgments.............................................................................................................. iii List of Tables .......................................................................................................................v List of Illustrations ............................................................................................................. vi List of Abbreviations ........................................................................................................ vii Introduction ........................................................................................................................1 Kidneys ..............................................................................................................................3 Dialysis ..............................................................................................................................7 Transplants and Factors Impacting Transplantation .........................................................17 Data and Empirical ..........................................................................................................28 Conclusion .......................................................................................................................32 References ........................................................................................................................35 Appendix .........................................................................................................................37 v List?of?Tables? ? Table 1 Kidney Wait List .....................................................................................................6 Table 2 Comparison of Alternative Dialysis Treatments ..................................................13 Table 3 Cost of Dialysis Treatment ...................................................................................18 Table 4 Regression Output and Expectations ....................................................................31 ? ? vi ? ? ? ? ? List?of?Illustrations? ? ? Illustration 1 Breakdown of Donations ...............................................................................7 ? vii List of Abbreviations CON Certificate of Need ESRD End Stage Renal Disease Program HCFA Health Care Financing Administration NOTA National Organ Transplant Act UNOS United Network for Organ Sharing 1 Introduction? ? The?topic?of?this?thesis?is?whether?the?structure?of?the?dialysis?industry?decreases?the? incentive?of?transplant?hospital?to?perform?kidney?transplants,?both?cadaveric?and?living.?The? National?Organ?Transplant?Act?of?1984?(NOTA),?place?restrictions?on?compensation?for?organ? donation.??The?structure?of?third?party?payment?and?reimbursement?in?the?dialysis?industry? raises?the?question?as?to?the?disincentive?exists?in?regard?to?performing?kidney?transplants.?Third? party?payments?occur?when?a?person?receiving?the?good?or?service?does?not?directly?pay?for?said? good?or?service.?In?this?instance,?dialysis?is?paid?for?up?to?eighty?percent?by?the?End?Stage?Renal? Disease?Program?(ESRD),?under?the?Health?Care?Financing?Administration?(HCFA)?a?part?of? Medicare?(Barnett,?Beard?and?Kaserman).?The?remainder?of?the?fees?are?paid?for?by?the? individual?or?private?insurance.? The?focus?of?this?thesis?is?primarily?on?the?incentives?of?transplant?hospitals?to?perform? kidney?transplants,?both?from?cadaveric?and?living?donors.?The?reason?this?is?of?interest?is?the? apparent?inefficiency?of?the?current?market,?evidenced?by?the?95,000?individuals?listed?on?the? waiting?list?for?kidney?transplants?according?to?the?National?Kidney?Foundation?s?website.? Kaserman?and?Barnett?speculated?that?the?regulated?price?of?organs?at?zero?is?one?of?the?largest? factors?contributing?to?the?shortage.?Others,?primarily?those?opposed?to?donor?compensation? have?argued?the?lack?of?education?spending?on?organ?donation?is?one?of?the?largest?problems? causing?the?shortage?(Beard?et?al.?2004).?Testing?and?disproving?this?hypothesis?was?the?point?of? analysis?of?Beard?et?al.?and?Lawson.? ?One?factor?that?has?been?ignored?is?the?impact?of?the?dialysis?industry?on?donation?and? transplantation.?Speculation?centers?on?the?third?party?payment?system?in?place?with?end?stage? renal?treatment?and?vested?interest?of?the?hospitals?and?dialysis?clinics.?The?hypothesis?being? 2 dialysis?machines?can?theoretically?keep?a?patient?alive?nearly?indefinitely.?In?some?sense,?this? could?downplay?the?need?for?kidney?transplants,?ignoring?quality?of?life?issues.?As?people?do?not? paying?directly?for?transplants?or?dialysis,?they?lack?market?power?to?demand?better?care?from? the?clinics?or?hospitals.?Certain?goods,?allow?consumers?to?protest,?not?purchase?goods,?or? boycott?to?gain?ground?in?causing?changes.?The?nature?of?dialysis?requires?continuing? treatments;?the?necessity?of?care?limits?the?patient?s?ability?to?force?change.??? The?goal?of?this?work?is?not?to?paint?a?bad?picture?of?the?health?care?industry,?nor?is?it? meant?to?discredit?those?who?work?with?renal?patients.??The?end?goal?is?to?analyze?how?the? incentives?of?the?dialysis?market?impact?the?final?out?come,?kidney?transplants.?The?services?are? necessary?and?vital?to?patients?and?their?families.?Services?rendered?through?the?ESRD?have? benefitted?countless?people?over?the?history?of?the?program.?The?intent?is?to?examine?the? incentives?and?market?structure?existing?in?the?market?to?determine?if?these?factors?have?a? significant?impact?on?the?outcomes?in?the?market?for?transplants.?Primarily?if?the?size?of?a? dialysis?clinic?impacts?the?number?of?transplants?performed,?and?if?the?hospital?offering? peritoneal?dialysis?impacts?the?number?of?transplants?performed.? ?Some?of?the?work?is?rehashed?from?the?author?s?prior?work?with?factors?impacting? cadaveric?kidney?donation.??This?particular?analysis?will?focus?on?total?kidney?transplants?rather? than?analyzing?the?source?of?the?donation.?The?number?of?transplants?is?highly?correlated,?if?not? perfectly?related?to?the?number?of?cadaveric?and?living?donations.?Granted?some?organs?are?not? transplanted?due?to?loss?or?other?complication,?but?a?sizeable?majority?of??organs?donated?are? transplanted.?? ? 3 ? Kidneys?and?How?They?Work? ? To?understand?why?kidney?dialysis?and?transplants?are?necessary,?one?must?have?an? understanding?of?how?the?kidneys?work,?and?what?may?cause?failure.?A?high?level?overview?is? warranted?too?elaborate?on?the?basic?operations?of?the?kidneys.?? ? The?most?simplistic?explanation?of?the?function?and?purpose?of?the?kidneys?is?they?are? one?of?the?body?s?filtering?mechanisms.?Healthy?kidneys?function?to?remove?excess?water?and? wastes,?regulate?chemical?balance?by?releasing?hormones,?and?assist?in?regulating?blood? pressure.?Williams?summarized?the?primary?function?of?the?kidneys?as?filtering?and?waste? removal,?everyday?processing?200?quarts?of?blood?in?order?to?filter?waste?products?and?excess? water?amounting?to?two?quarts.?? Greene?summarized?the?functional?unit?of?the?nephron?as?follows:?? The?nephron?is?the?functional?unit?of?the?kidney,?that?is?responsible?for?the?actual? purification?and?filtration?of?the?blood.?About?one?million?nephrons?are?in?the?cortex?of? each?kidney,?and?each?one?consists?of?a?renal?corpuscle?and?a?renal?tubule?which?carry? out?the?functions?of?the?nephron.?The?renal?tubule?consists?of?the?convoluted?tubule?and? the?loop?of?Heinle?.? While?this?is?a?very?elementary?view?of?the?kidney?function,?it?is?worth?mentioning?for?clarity.? Normally,?a?quotation?of?that?length?is?not?preferred,?to?prevent?loss?of?clarity?the?direct?quote? was?used.?Discussion?is?limited?to?avoid?bogging?down?in?medical?terminology?and?details?not? required?to?proceed?with?the?analysis?of?the?market?structure?and?related?industries.? 4 ? Kidney?Failure? ?The?primary?reason?one?would?require?transplant?and?or?dialysis,?would?be?kidney? failure?either?acute?or?chronic.?DaVita?reports?that?once?a?person's?kidney?function?has?dropped? below?fifteen?percent?a?person?begins?dialysis?????.?There?are?several?primary?causes?for?the?loss? of?function.?The?first?being?chronic?kidney?disease,?this?occurs?when?kidneys?are?no?longer?able? to?clean?toxins?and?waste?product?from?the?blood?and?perform?their?functions?to?full?capacity? (Williams).?Chronic?kidney?disease?usually?happens?over?an?extended?period?of?time?the? reduction?of?functionality?happens?over?a?period?of?time.?Generally?speaking?there?are?two?main? factors?that?contribute?kidney?disease.?The?first?being?as?a?result?or?side?effect?of?diabetes,?40%? according?to?DaVita?s?website?The?second?referenced?by?the?aforementioned?source?being?hyper? tension,?more?commonly?known?as?high?blood?pressure,?which?is?often?linked?to?diabetes.? When?kidney?function?decreases?suddenly,?primarily?due?to?a?toxin?or?large?blood?loss,? this?is?called?acute?kidney?failure.?In?many?cases?with?acute?failure,?kidney?function?recovers? partially,?sometimes?completely.?Often?dialysis?is?a?short?term?treatment?for?these?patients,? providing?functionality?until?one?recovers.?Dialysis?in?these?instances?is?used?to?offer?additional? filtration?to??give?the?kidneys?a?rest??and?a?chance?to?recover?(Web?Md).?Treatment?for?acute? kidney?failure,?does?not?necessarily?impact?those?with?chronic?failure.?It?seems?reasonable?to? assume?some?excess?capacity?may?be?maintained?to?handle?these?cases;?however?there?should? be?no?correlation?between?these?cases?and?transplants.?Possible?issues?regarding?this?possible? surplus?capacity?come?into?play?later,?as?it?may?contribute?to?incentives?to?not?pursue? transplantable?organs.?? 5 When?chronic?failure?occurs,?the?option?of?transplantation?exists?as?a?long?term?solution,? along?with?perpetual?dialysis?treatment.?Several?factors?are?looked?at?when?determining? candidacy?for?transplantation.?The?age?of?the?recipient,?health?of?patient?aside?from?the?kidney? failure,?quality?of?life?if?they?received?the?transplant,?ect.?If?one?is?put?on?the?list,?they?will?remain? on?dialysis?treatment?until?a?match?is?found?or?they?are?removed.?With?either?case,?a? summarization?of?the?process?can?be?explained?as?follows.?Once?kidney?function?has?reached?a? certain?threshold,?normally?fifteen?percent?functionality,?dialysis?treatment?begins.?Depending? on?the?situation,?including?the?cause?of?failure?and?the?general?health?of?the?individual,?they?may? be?placed?on?the?waiting?list?for?a?kidney?transplant,?if?they?are?suitable?candidates.?If?placed?on? the?transplant?list,?dialysis?treatments?will?continue?until?a?suitable?transplant?is?procured.?If?a? person?is?not?placed?on?the?list?due?to?continued?low?functionality,?dialysis?treatment?will? continue?indefinitely.? Dialysis?for?most?is?not?preferable?to?transplantation.?For?some?situations,?particularly? given?the?procurement?shortages,?it?makes?more?sense?for?a?patient?to?continue?dialysis? treatment.?The?elderly?for?example,?may?not?be?suitable?for?transplant?as?their?health?may?have? diminished?to?the?point?where?transplantation?is?no?longer?considered,?either?for?a?short? predicted?lifespan?and/or?the?predicted?ability?to?recover?from?the?transplantation.?Given?the? current?shortage,?many??possible??candidates?are?not?considered?viable?as?transplant?recipients.??? THE?WAITING?LIST? ? One?issue?that?increases?the?relevancy?of?the?topic?is?the?waiting?list?for?kidney? donations.?At?present?there?are?86,833?people?on?the?waiting?lists?for?kidney?transplantation? (Bregel).?The?number?may?be?somewhat?inflated?as?some?people?may?be?on?multiple?transplant? lists,?however?the?estimate?is?slightly?higher?than?the?estimates?on?the?UNOS?website.?Removal? 6 from?the?list?will?happen?if?a?patient?is?no?longer?a?suitable?recipient,?largely?to?further? degradation?of?health.?In?some?cases?the?lack?of?updates?to?various?waiting?lists?presents?a? problem?in?finding?a?recipient?in?a?timely?matter.?When?a?transplantable?kidney?is?removed,? there?is?a?short?window?to?perform?the?transplant,?if?several?suitable?recipients?are?called?in,?but? they?are?no?longer?suitable?for?receiving,?then?too?much?time?may?have?passed?to?allow? transplantation.?? ? The?transplant?list?has?been?increasing?continuously?for?the?past?twenty?years.?Kaserman? and?Barnett?(2002)?produced?a?table?illustrating?the?growth?in?the?waiting?list.?Below?is?an? updated?version?of?a?similar?table?and?chart?illustrating?the?kidney?waiting?list?from?1998?to? 2008.?? Table?1?Kidney?Wait?List? ? ? 7 Chart?1?Breakdown?of?Donations ? Dialysis? The?impact?of?dialysis?on?kidney?transplantation?is?the?central?topic?of?this?work.?? Drawing?conclusions?of?its?impact?is?multifaceted.?The?focal?hypothesis?is?that?the?size?of?a? hospital?affiliated?dialysis?clinic?is?inversely?related?to?the?number?of?transplants.?In?other?words,? as?clinic?size?increases,?the?fewer?transplants?the?hospital?will?perform,?controlling?for?hospital? size.?Data?is?available?for?the?number?of?kidney?transplants?performed?at?sanctioned?kidney? transplants?from?the?American?Hospital?Association.?The?constraint?in?research?was?the?fact?that? information?on?dialysis?clinics?directly?affiliated?with?transplant?hospitals?was?not?available?for?all? transplant?hospitals.?Nearly?three?hundred?hospitals?listed?as?being?able?to?perform?or?have? performed?transplants?in?the?past,?only?around?a?third?had?data?published?regarding?dialysis? facilities?directly?linked?to?affiliated?transplant?hospitals.???? ?Presently?there?are?217,000?people?in?this?country?relying?on?dialysis?(University?of? Chicago?Medical?Center).?This?reliance?costs?11.1?billion?dollars?annually.?One?rather?grim?fact? 10,501 5,945 Transplants?by?Source?2008 Cadaveric Living 8 found?during?research?was??the?U.S.?mortality?rate?for?dialysis?patients?is?about?23?percent,? twice?the?rate?of?patients?in?Western?Europe?or?Japan(Williams).??This?calls?into?question?the? quality?of?care,?the?same?article?references?the?quantity?of?hemodialysis?given?to?US?patients?in? relation?to?those?in?the?referenced?nations.?Patients?in?the?US?received?less?time?on?a?dialysis? machine?than?those?in?other?countries,?according?to?Ford?and?Kaserman?(1993)?in?their?paper? evaluating?certificate?of?need?regulation?on?dialysis?during?the?eighties.?? ?The?incentives?regarding?flat?rate?dialysis?fees?may?also?be?the?root?cause?of?this?issue.?If? clinics?are?paid?on?a?per?hour?basis?or?quality?metric,?care?may?improve.?With?fees?based?upon? time?use,?then?the?incentive?could?shift?the?focus?from?number?of?patients?to?quality,?however? the?risk?of?over?treatment?may?occur.???? Hemodialysis?vs.?Peritoneal?? ? Two?types?of?dialysis?treatments?exists?with?the?most?popular?being?hemodialysis.? Several?sources?list?the?around?ninety?percent?of?patients?choosing?hemodialysis.?The?choice?of? selection?is?chosen?to?best?suit?the?patients?in?most?cases,?assuming?it?is?offered?in?an?area.? DaVita?in?particular?offers?a?selection?program?on?its?website?to?guide?patients?through?the? selection?process.? Hemodialysis?requires?that?a?patient?go?to?a?clinic?or?center?two?to?three?times?per?week? for?several?hours?and?receive?treatment.?One?issue?with?hemodialysis?is?it?is?billed?per?session? rather?than?per?hour.?This?results?in?an?incentive?for?the?provider?to??short?change??the?patients? to?increase?profit?margins.?This?has?a?negative?impact?on?the?patient?s?quality?of?life,?as?their? blood?is?not?properly?filtered?due?to?the?shorter?treatment?times.?This?issue?aside,?hemodialysis? chosen?for?or?by?the?vast?majority?of?dialysis?patients,?some?ninety?percent?use?this?process? (Foundation).?? 9 ? The?decision?between?the?two?treatments?is?not?apparent?at?first,?as?it?is?not?directly? addressed?in?the?general?literature?on?dialysis.?One?major?concern?with?peritoneal?dialysis?is?the? added?risk?of?infection?with?the?at?home?treatment,?sanitation?may?eliminate?this?as?a?treatment? option.?If?proper?conditions?cannot?be?met,?then?this?form?of?treatment?will?be?avoided,?as?the? risk?of?infection?would?greatly?increase.?Estimates?addressing?the?issue?of?cost,?finding?at?one? time?peritoneal?dialysis?was?substantially?cheaper,?by?estimates?of?Dor?et?al.?costing?around? sixty?six?dollars?a?treatment?in?1992.?The?aforementioned?estimates?are?costs?to?the?facility?for? rendering?care,?not?end?cost?to?the?individual.?Estimated?costs?of?providing?an?in?center? hemodialysis?session?was?estimated?to?be?around?one?hundred?and?four?dollars?at?the?time?of? the?analysis.? ? One?issue?raised?by?Barnett?et?al.(1993)?dealt?with?empirical?evidence?suggested?the? shortening?of?dialysis?treatment?lengths?at?least?with?hemodialysis,?was?an?attributable?cause?of? increased?mortality?rates?observed?among?dialysis?patients.?The?shortening?of?treatment?times,? was?thought?was?in?a?part?due?to?the?set?payment?structure,?and?decreasing?reimbursement? rates?set?in?place?by?the?ESRD.?During?the?1980?s?the?reimbursement?rates?of?the?dialysis?clinics? dropped?in?the?neighborhood?of?fifty?five?percent?when?adjusted?for?inflation?according?to?the? analysis?in?Barnett?et?al.?Given?general?upward?pressure?on?prices?of?normal?goods?during?the? same?time?period,?it?seems?counterintuitive?the?real?price?of?medical?care?would?decrease.?Even? taking?into?account?economies?of?scale?and?technological?advancements?reductions?that?large? are?rare.?There?appears?to?be?no?large?cost?break?for?larger?clinics,?at?least?none?evidenced?in?the? author?s?research.? ? The?structure?of?dialysis?clinics?also?may?play?a?part?in?the?selection?of?treatment.?As? hemodialysis?is?the?cheaper?of?the?two,?it?would?be?more?profitable?given?the?flat? 10 reimbursement?system?to?perform?that?treatment.?Eighty?three?percent?of?independent?clinics? in?1988,?were?ran?on?a?for?profit?basis?(Barnett?et?al.?1993).?At?that?time,?some?110,000?patients? utilized?the?care?with?the?End?Stage?Renal?Disease?Program,?with?the?system?paying?out?3.7? billion?dollars?as?its?share?of?the?dialysis?cost.?The?rate?of?payment?the?program?uses?has?been? set?at?eighty?percent?since?its?inception.?Leaving?the?remaining?twenty?percent?to?be?covered? either?as?an?out?of?pocket?expense?or?for?private?insurance?to?cover,?primarily?the?latter.?This? twenty?percent?is?also?an?interesting?and?possible?problematic?as?estimates?at?one?time?claimed? thirty?five?percent?of?dialysis?patients?are?unable?to?remain?employed?after?they?start?treatment? (Kaserman?and?Barnett?2002).? ? Referring?back?to?the?cost?of?dialysis?care,?the?largest?driver?of?costs?for?a?clinic?are?labor? costs.?Barnett?et?al.?(1993)?estimated?the?labor?costs?of?nurses?and?technicians?at?around? seventy?to?seventy?five?percent?of?costs?of?a?dialysis?clinic.?Surprisingly?the?cost?of?the? equipment?is?rather?low,?according?to?Ford?and?Kaserman,?in1996?the?price?was?around?15,000? dollars.?In?that?paper,?they?argued?certificate?of?need?regulation?had?a?negative?impact?upon? dialysis?care(Ford?and?Kaserman?1993).?The?increase?in?wages?for?registered?nurses?and?licensed? practitioners?or?technicians,?considering?at?least?one?staff?member?must?be?employed?for?every? two?or?three?patients?receiving?care?(Ford?and?Kaserman?2000).? ? Oddly?enough,?during?the?eighties?when?CON?regulations?were?largely?in?place,?dialysis? clinic?expanded?from?1,041?clinics?with?12,329?machines?to?1,839?clinics?with?23,654?stations?in? 1989(Health?Service?Report?in?1990).?Ford?and?Kaserman?attributed?this?growth?to?the? implementation?of?the?End?Stage?Renal?Disease?Program?under?a?Social?Security?Act?Amendment? in?1972.?The?number?of?clinics?is?now?around?3,200?clinics?nationwide?(Hoovers).? 11 ? The?certificate?of?need?regulation?is?also?an?interesting?point?as?disincentives?may?result? because?of?the?existence?of?said?regulation.?A?certificate?of?need?(CON)?regulation?is?widely?used? in?the?medical?industry.?CON?regulations?are?put?in?place?with?the?alleged?goal?to??reduce? industry?costs?by?preventing??unnecessary?duplication?of?facilities???(Ford?and?Kaserman?1993)? The?CON?works,?by?requiring?a?permit?to?operate?a?medical?facility?such?as?a?hospital,?to?obtain? said?permit,?one?has?to?show?a?need?for?said?facility.?Requirements?for?CONs?vary?by?state,?some? have?the?trigger?price?set?at?zero?price,?others?at?one?time?were?over?one?million?dollars.?The? points?Ford?and?Kaserman?(1993)?used?in?disputing?the?CONs?in?brief?are?that:?investors?will?have? ?vastly?superior?information??compared?to?regulators?regarding?capacity,?incentive?of?the? existing?firm?to?oppose?entry,?and?finally?a?reduction?in?supply?that?occurs?as?the?end?result?of? the?regulation.?While?those?are?valid?points,?one?aspect?that?they?touched?upon?was?expansion? of?existing?clinics.?? Often?a?clinic?could?expand?operations?without?triggering?a?CON?hearing?or?filing,? because?of?the?low?cost?of?expansion,?assuming?new?machines?were?the?only?outlay,?rather?than? building?expansion.?One?possibility?that?is?contradictory?to?Ford?and?Kaserman?is?theory?that? possibly?that?patients?are?given?shorter?treatment?intervals?as?a?justification?should?a?CON? process?be?started.?If?a?clinic?shorts?patients?by?an?hour?or?so?per?treatment,?they?can?serve? more?patients.?If?time?is?reported?as?allotted?or?prescribed,?they?would?in?turn?appear?busier? than?they?actually?are.?The?plausibility?of?this?theory?would?be?difficult?to?quantify.?The? plausibility?of?the?skirting?CON?regulations?by?expansion?is?not,?as?searching?through?CON?filings? reveals?the?relatively?low?cost?of?equipment?compared?to?buildings,?in?states?with?high?CON? triggers.? 12 ? The?decreased?running?times,?also?had?been?hypothesized?to?have?a?direct?relationship? with?patient?life.?In?areas,?where?few?dialysis?clinics?operate,?the?lack?of?competition?may?cause? reduction?in?care.?A?minimal?level?of?patient?health?must?be?maintained?in?order?to?prevent? hospitalization.?Barnett?and?Kaserman?(1993),?acknowledged?some?level?of?quality?for?the?sake? of?maintaining?a?minimal?health?is?required?as?hospitalization?will?result?if?health?diminishes?past? a?certain?point.?The?lack?of?competition?may?allow?a?firm?to?reduce?quality?to?some?degree,? without?serious?threat?of?entry?by?competitor?firms.?If?CON?regulations?are?in?place,?the?threat?of? entry?may?all?be?but?eliminated.??A?recent?article?in?Salon?magazine?called?written?by?Jennifer?Nix? touches?on?the?possible?disincentive?existing?regarding?the?time?a?patient?receives?on?a?machine,? as?it??cuts?into?the?bottom?line?.?Issues?regarding?costs?also?exist?with?the?availability?of?nurses,? and?their?increased?wages.?According?to?the?article,?results?in?some?firms,?such?as?DaVita,? replacing?nurses?with?technicians.?? ? One?possible?solution?is?to?have?a?fixed?and?variable?portion?of?the?fee.?Compensation? for?the?hookup,?then?a?portion?related?to?the?time?a?person?is?connected?to?a?machine.?This? would?allow?pricing?structure?would?not?offer?as?much?incentive?to?shorten?treatment?time?for? the?sake?of?profitability.?Granted?it?still?may?exist,?depending?upon?the?amounts?but?is? presumably?fairer?than?a?flat?fee?reimbursement.?? ? One?issue?beyond?the?cost?of?dialysis?that?must?be?addressed?is?the?quality?of?life?that?a? patient?has?while?under?the?treatment.?Many?homeostasis?dialysis?patients?complain?of?a?wash? out?feeling?in?the?days?between?treatment?and?after?treatment.?Kaserman??referenced?only? thirty?four?percent?of?patients?were?able?to?maintain?employment?while?on?the?dialysis? treatment.?This?raises?the?appeal?of?peritoneal?dialysis?as?the?washed?out?feeling?is?not?as? prevalent,?as?treatment?occurs?every?day,?rather?than?a?few?times?a?week?The?diet?is?also?less? 13 restrictive,?which?is?seen?as?a?benefit?to?some?(DaVita).?However,?the?suicide?rate?is?higher? among?peritoneal?dialysis?patients,?Ford?and?Kaserman?wrote?on?this?topic,?and?attributed?the? increased?rates?to?a?several?factors.?One?being?that?a?community?bond?develops?with? homeostasis?dialysis?as?those?receiving?treatment?often?go?at?the?same?times.?The?shared?time? aides?in?forming?a?support?group.?They?believed?the?group?setting?had?a?therapeutic?effect.?The? second?theory?with?peritoneal?dialysis?is?the?patient?is?more?often?reminded?of?a?life?threatening? medical?problem.?To?summarize?the?effects?of?either?treatment,?a?table?from?Ford?and?Kaserman? (2000)?is?listed?below.? ? ? ? ? Table?2 Hemodialysis Peritoneal?Dialysis Administered?at?a?clinic. Sourced:?Ford?Kaserman?(2000)?Suicide?as?an? Indicator?of?Quality?of?Life:Evidence?from?Dialysis? A?Comparison?of?Alternative? Dialysis?Treatment?Regimens Provides?an? oppurtunity?to? interact?with?other? patients Self?administered? at?home.?May?yield? a?feeling?of? isolation. Three?treatments? per?week?four? "days?off." Several?exchanges? every?day?no?"days? off." Stringent?dietary? restrictions,? particulary?fluid? Less?stringent? dietary?restrictions Leaves?patient? "washed?out"?until? following?day. No?"washed?out"? feeling. 14 Transplantation? Before?discussion?about?transplants?can?proceed,?the?organ?procurement?shortage?and? its?causes?must?be?discussed.?Many?go?on?dialysis?because?they?do?not?meet?the?criteria?for? kidney?donation?under?the?current?shortage.?Daniel?Fisher,?one?of?the?founders?of?the?transplant? center?in?Chattanooga,?Tennessee,?estimated?that?only?around?half?of?the?city?s?dialysis?patients? were?considered?healthy?enough?for?a?transplant?consideration?(Bregel).?While?this?is?not? necessarily?representative?of?the?nation?as?a?whole,?Chattanooga?is?fairly?average?city?with? regards?to?many?demographic?variables.? ?Some?background?on?the?history?of?organ?transplantation?is?needed?to?understand?the? existence?of?the?current?shortage.?Initially?when?the?first?organ?transplantations?first?occurred? decades?ago,?there?was?no?issue?of?shortages?(Kaserman?2006).?This?was?due?to?a?recipient?s? responsibility?of?securing?the?donor?organ,?and?general?limitations?of?the?medical?technology.? Constraints?of?the?medical?technology?were?primarily?due?to?limitations?of?available? immunosuppressive?drugs.?Illustrating?this?limitation?were?the?initial?transplants?being? performed?on?close?relatives,?with?the?first?transplant?being?performed?between?a?set?of?twins.? Three?main?arguable?causes?of?the?shortage?stand?out?to?the?author.?The?first,?which?some? economists?have?been?discussing,?is?the?regulated?legal?price?of?organs.?The?second,?primarily? those?in?the?medical?profession,?is?the?lack?of?education?and?education?expenditures?regarding? donation,?the?latter?being?the?point?of?analysis?for?Beard,?et?al?(2004).?The?third?is?failure?to? obtain?consent?for?donation,?from?either?prior?knowledge?of?an?individual?s?wishes?such?as?a? driver?s?license?donor?card?or?making?wishes?known?to?survivors?(Kaserman?and?Barnett?2002).? The?regulation?placed?on?the?price?of?organs?will?be?the?first?topic?discussed.?? In?the?United?States?we?have?a?regulated?price?set?on?donated?organs,?cadaveric?or? 15 living.?This?is?arguably?one?of?the?main?causes?of?the?transplant?shortages?and?waiting?lists?we? now?face.?The?failure?of?hospitals?to?ask?the?families?of?the?deceased?to?donate,?has?also?greatly? contributed?to?the?estimated?6,000?annual?fatalities?(Beard,?et?al).?The?National?Organ? Transplant?Act?of?1984?prohibits?the?sale?of?organs.?The?prohibitions?on?the?sale?of?organs? equates?the?market?price?too?zero.?The?market?place?is?constrained?with?a?price?ceiling?set?at? zero.?The?fact?that?an?effective?price?ceiling?results?in?a?shortage?is?an?important?fact?that?an? undergraduate?should?know?at?the?conclusion?of?a?basic?microeconomics?course.?? Under?the?National?Organ?Transplant?Act,?the?sale?of?an?organ?is?a?felony.?According?to? Kaserman?and?Barnett?(2002)?some?supporters?of?the?regulation,?most?notably?the?American? Medical?Association,?justify?it?based?on?moral?grounds.?One?common?argument?is?restrictions? are?in?place?to?protect?the?poor?from?extortion?or?some?form?of?injustice?in?the?purchase?or?sale? of?an?organ.?The?basis?for?this?belief?on?the?purchasing?side?is?the?price?of?a?legal?organ?will?be?as? high?as?black?market?prices.?While?this?could?be?true,?evidence?is?pointing?in?the?opposite? direction.?According?to?an?Economist?article?in?2006,?Iran?has?implemented?a?government? regulated?market?for?organ?sales.?The?market?is?specifically?for?kidneys,?and?the?prices?have? ranged?from?two?to?four?thousand?dollars.?While?this?system?is?different?than?many?have? proposed?in?the?U.S.,?it?shows?that?a?market?price?is?probably?much?lower?than?black?market? prices.?Kaserman?and?Barnett?(2002)?speculated?in?their?book?the?going?black?market?price?for? kidneys?was?around?forty?thousand?dollars,?citing?observations?of?willing?patients?trying?to? obtain?a?kidney?domestically?and?internationally.?They?estimated?the?black?market?price?would? be?around?ten?times?the?legal?market?price.?This?estimate?would?be?inline?with?the?findings?of? the?Economist?article.?? The?lack?of?a?legal?pricing?mechanism?is?one?of?the?contributing?factors?of?the?organ? 16 shortage.?The?importance?of?the?organ?shortage?on?dialysis?is?simple,?the?more?people?waiting? for?a?transplant,?the?more?people?on?dialysis.?This?brings?into?issue?whether?the?hospitals?have? an?incentive?to?keep?patients?on?dialysis?rather?than?encourage?transplantation/donation.?At? first?the?idea?of?hospitals?intentionally?keeping?patients?on?dialysis?may?rather?odd,?and?fairly? grim.?The?reason?for?the?speculation?is?the?hospitals?have?built?dialysis?clinics?themselves?or?are? affiliated?with?local?clinics?to?provide?services.?This?research?will?focus?on?the?first?type?of?clinic.? The?costs?of?dialysis?and?kidney?transplant?costs?are?then?bore?by?the?federal?government.?? Payment?by?the?government?while?easing?the?financial?strains?on?some?patients?brings? about?inefficiency?due?to?the?third?party?payment?system.?It?reduces?some?of??the?social?inequity? some?fear?could?result?in?an?open?market.?However,?instead?of?bidding?up?the?price,?people? compete?via?entry?on?multiple?waiting?lists.?With?the?price?of?kidneys?set?at?zero,?the?market?is? not?allowed?to?work,?as?it?should.?At?present?one?who?is?on?dialysis?and?on?the?wait?list?for?a? transplant?is?subject?to?the?waiting?list.?The?system?while?well?intentioned?has?a?notable?flaw?in?a? sense.?The?government?pays?for?dialysis,?and?also?for?the?medical?costs?associated?with?a?kidney? transplant.?The?operation,?being?the?bulk?of?the?transaction?costs?aside?from? immunosuppressive?drugs.? As?a?side?note,?it?worth?mentioning?that?over?the?last?few?years,?some?allowances?have? been?made?to?allow?for?trials?allowing?various?forms?of?compensation.?None?have?been? implemented,?judging?by?current?literature?as?of?this?writing.?Technological?innovations?have? allowed?new?means?of?communication?between?patients.?One?example?of?this?is?websites? established?to?facilitate?kidney?swaps.?? The?main?shortcoming?of?all?donated?kidneys?is?the?expected?useful?life?of?the?kidney?is? not?the?remainder?of?the?individual?s?life.?This?is?due?to?two?primary?issues?one?being?the?single? 17 replacement?kidney?is?doing?the?work?normally?performed?by?two?kidneys.?Secondly,?are?the? limitations?of?immunosuppressive?drugs,?while?greatly?and?continually?improving?are?not? perfect.?Over?time,?the?body?eventually?rejects?the?organs.?These?and?other?factors?shorten?the? life?expectancy?of?the?replacement?organ.?Often?the?organ?lasts?around?a?decade?according?to? Marcotty?in?their?article?highlighting?the?current?shortage.? ?Under?the?current?procurement?system,?and?given?current?technology,?it?is?feasible?and? practical?to?keep?a?patient?on?dialysis?for?many?years?while?waiting?on?a?transplant.?As?previously? addressed,?the?life?of?a?dialysis?patient?is?by?no?means?one?of?high?quality,?but?it?allows?a? reasonable?quality?of?life?a?few?days?a?week?with?either?type?of?treatment.?Quoting?Kaserman?in? a?2006?lecture,??they?re?waiting?for?an?organ?or?death??in?reference?to?those?on?the?waiting?list.? However?using?the?ability?of?those?on?dialysis?to?maintain?employment?as?an?indicator,?it? appears?those?on?dialysis?treatments?have?a?poorer?quality?of?life?compared?to?transplant? recipients.?Many?patients?cite?the??washed?out??feeling,?and?other?concerns,?but?it?is?also?not? very?quantifiable?in?traditional?senses,?so?the?employment?serves?as?an?indicator.?There?may?be? other?biases?at?play?in?the?ability?to?maintain?employment,?as?the?time?required?for?treatments,? two?to?three?days?a?week,?could?be?difficult?for?many?schedules.?Some?employers?would?not?be?a? flexible?in?working?with?their?employees,?operational?hours?of?the?clinics?also?factor?into?this.?? ?The?previous?raises?the?question?as?to?whether?incentives?exist?to?keep?patients?on? dialysis?either?hemodialysis?or?peritoneal?dialysis.?If?the?treatments?produce?such?poor?side? effects,?why?is?there?not?a?larger?push?to?perform?transplants??Kaserman?and?Barnett?(2002)? discussed?issues?regarding?the?number?of?families?asked?about?cadaveric?donation.?If?the?rather? simplistic?solution?of?asking?all?possible?donors?is?not?implemented,?it?begs?the?question?as?to? whether?a?reason?exists.?Why?are?so?few?patients?asked?about?donation?of?their?loved?ones?? 18 While?the?position?of?asking?is?a?rather?awkward?one?for?hospital?staffing,?great?benefit?can? come?from?it.?Incentives?appear?to?be?in?place?for?hospitals?to?keep?patients?on?dialysis.?The?cost? of?one?year?of?homeostasis?dialysis?is?nearly?comparable?to?a?transplant?as?illustrated?in?the? table?below,?using?numbers?Kaserman?referenced?in?2005?lecture.?While?the?upfront?cost?is? higher?with?a?transplant,?the?average?and?total?costs?are?lower.?When?a?patient?is?on?dialysis?for? several?years,?the?hospital?will?reap?significantly?higher?revenue?compared?to?performing?a? transplant?and?providing?proper?medication?over?the?course?of?a?few?years.?? Table?3?Cost?of?Dialysis?Treatment? ? ? ? This?rather?simple?example,?does?not?take?into?account?any?form?of?interest,?inflation,?or? discount?rate?however?it?illustrates?the?nominal?savings?possible.?Beyond?the?difference?in? revenues,?other?possible?reasons?exist?to?keep?patients?on?dialysis?treatment.?One?reason?is?as?a? justification?for?the?dialysis?clinics?themselves.?It?seems?reasonable?to?assume?excess?capacity? has?to?be?built?for?the?clinics?to?handle?the?necessary?number?of?patients,?growth,?as?well?as? emergency?cases.?The?machines?while?not?extremely?costly?to?purchase?relative?to?other?modern? medical?equipment.?Maintenance?and?operation?costs?for?the?machines?and?clinics?themselves? are?costly.?The?operation?expenses?stem?from?the?staff?requirements?at?a?clinic,?and?variable? cost?incurred?per?patient.?Barnett?et?al.?list?labor?costs?as?70?75%?of?the?total?costs?facing?a?clinic.? 19 The?same?paper?states?clinics?must?maintain?a?staff?to?patient?ratio?of?three?to?four?nurses?or? technicians?for?every?ten?patients?undergoing?treatments?at?one?time.?If?this?holds?true,?it?is? beneficial?for?the?clinic?to?be?operating?near?sustainable?capacity,?assuming?the?staff?can?handle? the?aforementioned?load?with?no?degradation?in?care?rendered.?This?means?the?hospitals?have? incentive?to?keep?patients?on?dialysis,?even?though?this?is?not?the?most?cost?effective?or?best?for? their?patients?gauging?by?quality?of?life.?? The?author?recognizes?that?not?all?dialysis?patients?are?candidates?for?kidney?transplants;? however?a?great?many?are?as?do?many?others.?Bregel?quotes?transplant?surgeons?speculating? half?of?dialysis?patients?are?eligible?for?transplants,?but?many?of?those?are?not?on?the?list?due?to? current?shortages.?Kaserman?speculated?in?lectures?of?similar?occurrences?he?believed?were? occurring.?An?additional?incentive?is?for?expansion?of?existing?dialysis?facilities.?As?more? transplants?occur,?fewer?patients?would?be?on?long?term?dialysis,?if?fewer?transplants?occur?the? demand?for?dialysis?care?would?increase.??The?author?is?not?trying?to?dispute?the?need?for?dialysis? clinics,?merely?stating?the?incentives?in?existence,?which?may?result?in?inefficient?outcomes.? Some?patients,?even?in?the?absence?of?a?shortage?are?simply?not?candidates?for?transplants.?The? goal?of?this?thesis?is?not?to?solve?the?kidney?shortage,?but?to?examine?if?the?current?system?if?the? rather?perverse?outcomes?are?the?result?of?the?system?in?place.?Some?explanation?of?the?causes? of?the?organ?shortage?is?warranted?to?better?understand?the?problem.?? ? Price? ? A?common?notion?is?that?payment?for?organs?would?encourage?illegal?organ?harvesting,? possibly?resulting?in?someone?forcibly?kidnapped.?This?belief?is?probably?agitated?by?urban? legends?and?Internet?rumors,?of?people?being?drugged?and?waking?up?in?a?back?alley?without? 20 their?kidneys.?One?could?also?speculate?that?poorer?people?would?begin?selling?organs?to?pay? their?bills.?The?main?point?of?this?line?of?thought?is?that?people?should?be?protected?from?the? repercussions?of?the?sale?of?organs;?whether?those?repercussions?are?of?their?own?doing?or?not.? The?ban?on?organ?sales?was?passed?in?part?due?to?the?response?to?a?doctor?buying?college? student?s?kidneys?and?transplanting?them?into?the?highest?bidder.? If?allowing?the?market?to?work?naturally?is?deemed?perverse,?what?else?can?be?done?to? alleviate?the?shortage??One?idea?is?to?enforce?the?laws?regarding?organ?donor?cardsi?and?to?also? ask?families?of?the?deceased?if?they?would?like?to?donate.?Those?measures?would?aide?in?easing? the?shortage,?yet?may?not?solve?the?problem.?One?other?issue?is?it?is?hard?to?analyze?the?impact? of?donor?cards?and?asking?for?family?consent.?The?reason?for?this?difficulty?is?according?to? Kaserman?(2002);?donor?cards?are?often?overridden?by?the?family?s?wishes,?against?Federal?law.? He?also?said?families?of?up?to?half?of?potential?donors?may?not?be?asked?to?donate?the?organs?of? the?deceased.?? Some?in?the?medical?community?have?speculated?programs?that?educate?the?general? public?and?better?educate?the?medical?professionals?about?organ?donation?will?have?a?large? impact?on?organ?donation.?While?the?idea?behind?increasing?education?seems?very?logical,?it?may? be?not?be?the?perfect?solution.?Due?to?the?insignificance?of?educational?expenditures?in?prior? analysis,?Beard?et?al.?(2004)?and?Lawson,?the?variable?was?not?included.?Also?recent?data?is?not? readily?available;?the?data?used?in?Beard?et?al.?(2004)?was?obtained?through?the?Freedom?of? Information?Act?(FOIA),?time?constraints?prevented?obtaining?more?recent?figures.?? Discussion?of?the?moral?implications?of?organ?donation?policy?is?not?the?aim?of?this? paper,?nor?is?proposing?a?solution.?Basic?discussion?of?the?problem?is?warranted?to?better?grasp? the?arguments?for?and?against?different?programs?and?policies?regarding?organ?donation.?Data? 21 availability?and?the?practicality?of?testing?some?solutions?hinder??analysis?of?proposed?solutions? greatly.?While?a?market?works?in?other?nations,?due?to?legal?reasons,?solutions?of?this?sort?may? not?be?tested?due?to?legal?restrictions.?While?some?restrictions?have?been?relaxed?over?the?past? few?years,?primarily?to?allow?compensation?trials.?However,?none?have?been?tested?as?of?this? writing.?Enforcing?donation?cards?and?consent?laws,?is?problematic?at?best.?As?these?are?required? now?and?various?estimate?only?50%?of?families?are?approached?after?a?death?allowing? transplantation.?However?we?can?however?look?at?demographic?variables?and?educational? expenditures?and?determine?their?relation?to?donation.?From?this?we?may?be?able?to?learn?which? groups?are?less?prone?to?donate,?and?craft?incentives?to?reach?these?groups.?? Transplant?Market?Structure? ? Rather?than?division?solely?along?state?or?county?lines,?the?nation?is?divided?it?up?into? Organ?Procurement?Regions,?at?the?time?of?this?writing?there?are?twelve?listed?on?the?United? Network?for?Organ?Sharing(UNOS).?Within?each?UNOS?region,?there?are?multiple?Organ? Procurement?Organizations?(OPOs)?that?are?not?profit?entities.?The?territories?of?the?OPOs?may? or?may?not?encompass?an?entire?state.?Some?states?may?have?several?areas;?Tennessee?for? example,?has?two.?Some?OPO?s?may?encompass?sections?or?entire?parts?of?multiple?states.?Some? of?the?prior?research,?primary?Beard?et?al.?(2004)?in?Limits?to?Altruism,?used?the?OPO?territories? as?the?unit?of?their?analysis,?as?data?on?cadaveric?kidney?donation?was?available?by?that? particular?unit.?The?use?of?OPOs?added?a?minor?level?of?complexity,?as?demographic?variables?are? available?on?state?and?sometimes?county?levels.?To?create?data?exactly?for?the?OPO?s?would?be? laborious?if?not?impossible,?as?existing?research?has?noted??? ?? ? 22 Factors?that?Impact?Transplantation? ?Much?of?the?following?comes?from?work?regarding?organ?donation.?The?belief?held?by? the?author?is?that?the?factors?that?contribute?to?organ?donation?are?also?correlated?to? transplantation?and?the?dialysis?information.?The?demographic?variables?included?were? percentage?of?population?that?is?African?American,?below?the?poverty?level,?with?an?affiliation? with?a?Christian?denomination,?and?with?a?college?degree.?Dummy?variables?were?also?added?for? geographic?regions.?These?were?added?to?account?for?regional?differences?in?collection?attitudes? and?policies.?? ??The?logic?behind?the?demographic?variables?is?certain?demographics?were? acknowledged?by?Siminoff,?et?al.?(2001)?in?to?be?more?apt?to?donate?than?others.??Siminoff,?et? al.?s?data?was?collected?from?interviews?with?Organ?Procurement?Organization?(OPO)?staff?and? families?of?all?donor?eligible?deaths?at?hospitals?in?parts?of?Pennsylvania?and?Ohio.?They?analyzed? the?results?from?interviews?to?determine?the?demographics?of?the?organ?donors,?to?see?if?certain? demographics?where?more?prone?to?donate.?The?studies?showed?higher?income?individuals?were? more?apt?to?donate.?However?they?did?not?imply?poverty?or?lower?incomes?would?decrease? donation,?as?Beard,?et?al.?had?hypothesize.?When?racial?background?and?education?level?are? controlled?for,?poverty?should?positively?impact?donation.?The?intuition?behind?this?belief?is?the? group?in?question?may?be?more?generous?with?non?monetary?gifts.?In?a?sense,?they?are?giving? what?they?can?to?help.?While?there?is?not?much?resource?to?support?the?stance,?it?seems? reasonable.?Under?the?current?system,?a?donation?is?solely?done?as?an?act?of?generosity.?This? could?also?be?capturing?some?aspects?of?family?size,?as?poverty?is?generally?correlated?to?higher? birthrates.? Minorities,?particularly?African?and?Asian?races?were?found?less?likely?to?donate,?in? 23 multiple?studies.?Yeun?et?al?(1998)?wrote?a?paper?entitled??Attitudes?and?beliefs?about?organ? donation?among?different?racial?groups??attributing?hesitance?of?African?Americans?to?fill?out? donor?cards?on?distrust?of?the?government?and?hospitals.?They?believed?this?to?be?one?of?the? larger?contributing?factors?to?poor?donation.?They?analyzed?survey?data?from?Bronx?health? clinics,?to?determine?why?there?are?discrepancies?in?donation?among?races.?African?Americans? were?found?to?have?very?similar?attitudes?as?other?races?toward?donation,?but?a?vast?majority? had?refused?to?sign?donor?cards.?Others?commented?they?did?not?trust?hospitals?or?the? government,?holding?the?belief?that?medical?staff?would?let?them?pass?to?harvest?their?organs.? This?distrust?is?a?common?misconception?among?all?races,?not?just?African?Americans.?The? misconception?is?misguided,?as?the?doctor?performing?the?transplant?is?generally?a?specialist?in? that?field.?While?the?doctors?providing?care?rarely?have?any?relation?if?any?to?transplant?centers? or?transplant?operations.?? The incidence of kidney failure among African Americans was higher than among other races. Donor and transplants being of the same ethnic background often have better success rates than those of differing races. Given the distrust, and correspondingly low donation rates, dialysis treatment among minorities becomes even more critical. Minorities, especially those in rural areas, benefitted greatly from the End Stage Renal Disease Program, as this funded more clinics to be built, especially in the rural areas. This was one issue that was analyzed by Ford and Kaserman (1993), as they found that the percentage of the population that was black was positively correlated with the number of dialysis clinics in a state. Given the greater need for transplants among African Americans, it is hypothesized a positive relation exists between the percentage of a state?s? population that?is?African?American?and?the?number?of?transplants?performed?in?a?state.? 24 The?variable?for?education?used?was?percent?of?the?state?population?over?twenty?five? that?had?earned?a?bachelor?s?degree?or?higher.?Siminoff,?et?al?(2001)?found?that?many?of?the? donors?in?her?study?held?college?degrees.?This?variable?was?found?to?be?positive?and?significant? in?the?model?of?Beard,?et?al.?(2004).?Note?this?variable?only?takes?into?account?higher?levels?of? education.?Given?the?correlation?between?education?and?donation,?it?is?assumed?the?trend?will? continue?with?transplantation.? ? State?dummy?variables?were?added?to?control?for?the?possibility?of?state?and?possible? regional?differences?in?varying?attitudes?toward?organ?donation?and?transplantation.?Beard?et?Al.? (2004)?used?regional?dummy?variables?in?their?paper?Limit?to?Altruism.?They?found?that?there? were?statistically?significant?variations?between?the?base?and?four?other?regions.?Also,?the?use?of? the?Organ?Procurement?regions?in?their?analysis,?prevented?the?use?of?state?dummies,?as?the? areas?often?do?not?coincide?with?state?boundaries.? ? In?this?analysis,?it?was?decided?to?use?a?set?of?regional?dummies?as?well,?though?not?of? the?same?creation?as?in?Beard?et?al.?(2004).?The?hospitals?were?sorted?by?state,?then?grouped?by? region?into?the?following?five?groups?based?upon?their?location:?Southeast,?West,?Midwest,? Great?Lakes,?and?North?East.?The?North?East?was?chosen?as?the?base,?and?was?not?included?in?the? regression?input.?No?prior?expectations?are?made?about?the?dummies.??? The following are variables created to further elaborate on the model of Beard et al. (2004) and Lawson (2008). The main difference being this analysis is looking at transplants in 2008 and their models evaluated cadaveric donations in 1995. While?reading? about?organ?donation,?one?factor?that?has?been?empirically?ignored?is?the?impact?of?religious? affiliation?on?donation?in?the?United?States.?The?hypothesis?is?people?with?a?religious?affiliation? will?be?more?inclined?to?donate,?bar?the?vast?minority??with?affiliation?denominations?that?do?not? 25 endorse?or?permit?transplantation?of?organs.?Often?the?perceived?issues?revolve?around?the? acceptance?of?blood?from?another?person?According?to?the?group,?Transplant?for?Life?s?summary? of?major?religions,?almost?all?of?the?major?religions?practiced?in?the?United?States?either?have?no? official?negative?opinion?or?openly?encourage?donation.?Many??such?as?the?Catholic?and? Episcopal?Churches?openly?encourage?organ?donation.?Some?such?as?the?Quaker?and?Pentecostal? denominations?do?not?directly?or?openly?address?the?issue,?leaving?the?decision?to?the?individual.? Many?of?the??neutral??groups,?those?that?have?not?officially?endorsed?a?position,?recognize?the? benefits,?and?take?the?stand?that?donation?is?ultimately?a?personal?choice.?? Some?analysis?exists?on?the?topic,?Randhawa?(1998)?in?his?analysis?of?the?influence?of? religion?on?donation,?found?many?derive?their?views?toward?donation?from?the?stance?of?their? religion?s?attitude?toward?donation.?While?his?study?was?limited?to?a?sample?of?the?Asian? population?in?the?United?Kingdom,?it?is?reasonable?to?infer?other?people?place?emphasis?on?the? opinion?of?their?faith.?One?point?of?interest,?over?half?of?the?respondents?in?his?study?did?not? know?the?official?stance?of?their?religion.?In?reality,?most?of?those?were?of?faiths?that?had?either? publically?advertised?their?support?and?or?openly?encouraged?donation?through?other?means.? While?this?may?not?correspond?perfectly?to?a?more?diverse?sample,?the?merits?of?the?findings? warrant?some?further?evaluation.? Accurate?data?on?Christian?affiliation?is?available?from?the?census?by?state.??Only?one? Christian?sect?has?a?strictly?negative?attitude?negative?attitude?toward?organ?donation.?They? constitute?a?miniscule?part?of?the?U.S.?population,?and?would?not?be?expected?to?a?have?a? significant?impact.?It?is?hypothesized?Christian?affiliation?will?be?positive,?as?most?Christian?and? Jewish?groups?encourage?organ?donation.??It?is?important?to?note?that?data?was?also?available?on? the?percentage?of?the?population?that?consider?themselves?religious.?The?affiliation?and?religious? 26 variables?both?have?some?degree?of?bias.?The?generic?religious?variable,?is?vague,?but?captures?a? larger?set?that?may?be?missed?in?the?affiliation?variable.??The?variable?also?is?more?prone?to?a? response?bias,?as?someone?may?say?yes?to?give?a?politically?correct?or?accepted?answer.?The? affiliation,?appears?to?overlook?smaller?denominations?or?independent?churches,?but?in?many? regards?more?precise?in?that?it?looks?at?membership?numbers,?rather?than?a?generic?question.? The?affiliation?data?is?also?from?a?census?study..?The?result?of?using?the?affiliation?data?is?that? some?states,?particular?those?with?high?percentage?of?Catholic,?Episcopalians,?Lutherans,?and? others?groups?with?a?formal?confirmation?process,?will?be?inflated?in?comparison?to?those?with?a? percentage?that?attend?smaller,?possibly?unaffiliated?churches?This?hypothesis?was?confirmed? with?cadaveric?donations?in?Lawson?(2008).? ? The?age?of?patients?is?also?a?contributing?factor?to?the?number?of?transplants.?Older? transplants?may?not?be?the?best?candidates?for?transplants,?however?they?may?still?receive?them.? To?account?for?the?health?of?the?population,?the?mean?life?expectancy?of?a?state?is?used?to? measure?health.?While?it?does?not?necessarily?capture?the?age?of?an?area,?it?does?provide?a? representation?of?the?health?of?the?area.?The?coefficient?of?this?variable?was?somewhat? unknown.?If?people?love?longer,?it?could?be?assumed?they?are?healthier,?either?through?their?own? actions?and?or?as?a?result?of?the?health?care?system?in?the?area.?As?life?expectancy?decreases,? one?would?suspect?the?demand?for?kidneys?and?renal?care?would?increase?as?many?common? health?concerns?facing?this?nation?at?present?stem?from?the?largest?contributing?factors?to? kidney?failure.? Attributes?of?the?hospital?themselves?must?be?captured.?The?sheer?size?of?the?hospital? also?has?a?certain?impact?upon?transplantation.?Speaking?in?general?terms,?smaller?hospitals?will? not?perform?as?many?transplants?as?a?large?hospital.?To?account?for?this,?two?hospital? 27 demographic?variables?were?obtained?from?the?American?Hospital?Directory.?Those?were? variables?taking?into?account?the?number?of?staffed?beds?at?the?hospital?and?the?total?patient? revenue?of?the?hospital.?Both?of?the?variables?are?hypothesized?to?have?positive?coefficients.? There?might?be?some?exceptions?regarding?the?revenue?with?children?and?Veteran?s? Administration?hospitals,?as?there?revenue?might?not?reflect?true?revenues.? General?health?of?the?population?also?has?an?impact?upon?kidney?dialysis.?The?leading? contributors,?as?mentioned?prior,?for?kidney?failure?are?diabetes?and?hypertension.?These?are? often?associated?with?other?characteristics?reflecting?poor?health?of?the?population.?If?the? populous?of?a?state?is?less?healthy?overall,?the?supply?and?demand?curves?for?kidneys?will?be? altered.?As?the?population?lives?longer,?the?general?inference?is?the?population?is?relatively? healthier,?and?the?corollary?is?also?true.?If?the?population?is?healthier,?it?seems?reasonable?to? assume?the?population?would?then?be?better?candidates?for?donation.?If?the?population?has? poorer?health,?then?it?seems?reasonable?to?infer?fewer?transplantable?organs?could?be?sourced? from?the?population.?The?argument?is?best?illustrated?based?on?the?impact?on?African?Americans.? Factors?leading?to?kidney?failure?are?more?prevalent?than?among?African?Americans?and?other? minorities,?as?such?the?incidence?of?kidney?failure?is?higher.?Corresponding?to?the?higher? incidence?of?failure?is?a?disproportionately?large?shortage?compared?to?other?races.?? The?final?three?variables?deal?with?the?affiliated?dialysis?clinics?themselves.?They?are?the? non?profit?or?for?profit?status?of?a?clinic,?the?number?of?hemodialysis?machines,?and?the?offering? of?peritoneal?dialysis.?There?were?some?issues?regarding?the?availability?of?the?data,?which?will? be?addressed?later?in?the?next?section.?The?number?of?hemodialysis?machines?is?expected?to?be? negatively?correlated?with?the?number?of?transplants?performed?at?a?particular?hospital.?As? previously?mentioned,?the?incentives?of?the?dialysis?industry?have?an?incentive?to?retain?patients? 28 on?dialysis?care.?For?the?same?reasons,?the?dummy?variable?for?the?offering?of?peritoneal?dialysis? is?expected?to?have?a?similar?signed?coefficient.?The?reasoning?behind?hemodialysis?applies?to? peritoneal?dialysis.?The?incentives?may?in?fact?be?stronger?as?previously?mentioned?papers? estimate?the?average?cost?of?peritoneal?to?be?lower?than?hemodialysis.?The?dummy?variable? representing?the?for?profit?status?has?been?included?to?evaluate?the?impact?of?the?profit?motive? of?the?clinic.? ?Data? ? The?data?regarding?the?number?of?kidney?transplants?was?acquired?from?the?Medicare? website.?The?program?keeps?records?of?all?legal?transplants,?as?they?fund?the?procedures? through?the?End?Stage?Renal?Disease?Act.?The?data?was?listed?by?transplant?hospital,?through? 1988.?While?the?data?went?back?to?1988,?it?is?overly?optimistic?to?believe?that?many?of?the? hospitals?performing?transplants?where?even?open?at?that?time?or?even?capable?of?the? performing?the?transplants.?Similarly,?it?is?unrealistic?to?believe?that?all?hospitals?operating?in?the? late?80?s?are?still?in?operation?or?performing?transplants.?Given?data?limitation?for?the?hospital? statistics?it?was?decided?that?2008?would?be?the?best?year?to?analyze.?This?is?because?the?data? regarding?hospital?revenue,?patient?days,?discharges,?and?staffed?beds?was?available?for?2008.?? ? Revenue?and?staffed?beds?may?fluctuate?more?so?than?demographic?variables.?The?data? regarding?dialysis?clinics?as?of?the?last?report?to?Medicare,?most?had?been?updated?within?the? last?two?calendar?years.?The?assumption?being?that?the?number?of?machines?in?a?clinic?would?not? vary?over?the?course?of?a?maximum?time?frame?of?two?years.? The?general?demographic?variables,?were?sourced?from?the?US?Census?website.?A? limiting?factor?with?the?data?is?that?it?is?largely?grouped?to?2000,?or?prior?data?as?is?the?case?with? information?on?religious?affiliation?being?sourced?from?a?1997?study.?It?has?been?previously? 29 argued?that?religious?affiliation?is?fairly?constant.?By?this?it?is?meant?that?one?does?not?change? faith?often,?changes?in?denominations?may?occur?frequently.?However,?there?are?not? traditionally?large?swings?in?general?affiliation?over?a?ten?year?period.?? ? Another?issue?with?the?data?was?the?availability?of?dialysis?clinic?data.?The?main?reason? for?analysis?was?to?analyze?the?impact?of?clinics?directly?affiliated?with?hospitals.?Separating?the? clinics?not?affiliated?directly?with?hospitals?was?done?by?hand.?Information?on?Medicare? approved?clinics?was?listed?on?the??Dialysis?Facility?Compare??webpage?on?the?Medicare? website.?In?many?cities,?no?clinic?appeared?to?be?directly?link?to?a?hospital;?in?others?the?hospitals? had?obvious?direct?affiliation,?either?confirmed?by?name?of?the?clinic?and?or?address?of?the?clinic? and?the?hospital.?This?was?referenced?manually,?by?cross?referencing?the?information?on?the? Medicare?website?and?that?provided?to?the?American?Hospital?Directory.?Care?was?taken?to? insure?affiliation?of?a?clinic?directly?with?a?transplant?hospital.?In?many?cases,?where?machines? were?not?listed?with?a?hospital,?research?was?done?to?determine?if?the?hospital?had?dialysis? machines.?The?research?methods?involved?using?internet?search?engines,?to?locate?the? information?if?it?was?listed?on?alternative?sources,?then?the?hospital?s?own?website?was? examined?for?information?regarding?dialysis?machines.?In?most?cases,?this?research?turned?up? little?information.?Data?for?three?or?four?hospitals?was?obtained?via?this?method,?and?was?not? denoted?in?the?research?process.?? All?hospitals?have?dialysis?machines?if?they?perform?kidney?transplants;?this?is?necessary,? as?patients?would?require?the?machines?prior?to?the?transplant,?and?for?a?short?time?post? transplant.?The?issue?was?that?not?all?hospitals?listed?dialysis?clinics?that?were?of?direct?affiliation.? Often?there?would?be?clinics?in?the?same?neighborhood,?but?under?private?ownership,?under? companies?such?as?DaVita.?This?was?rather?unscientifically?determined?as?the?listing?of?clinic? 30 listed?street?addresses?in?the?listing?for?a?city.?Often,?clinics?would?have?addresses?that?were?a? block?or?two?over?from?the?main?hospital?building.?Because?of?the?lack?of?direct?affiliation,?these? clinics?are?ignored,?as?the?focal?point?is?examine?the?impact?of?direct?affiliation?This?could?be?for? one?of?a?couple?main?factors,?either?hospitals?do?not?offer?traditional?dialysis?care,?they?have? arrangements?with?private?companies??across?the?street?,?or?possibly?the?names?were?not? obviously?linked?with?the?hospital.?Time?constraints?prevented?research?on?every?hospital?having? an??official?clinic?.?What?is?believed?to?be?the?case?for?most?is?that?they?have?machines?but?are? not?used?for?long?term?patients;?they?are?referred?to?separate?clinics.?? ? The?disconnect?between?hospital?affiliated?clinics?and?hospitals?caused?a?large?reduction? of?observations?having?complete?data?sets.?A?hospital?may?also?be?listed?as?a?qualified?transplant? hospital?but?elected?not?to?perform?transplants?in?the?given?year.?For?most,?however,?there?were? no?transplants?performed?in?prior?years,?or?trend?downward?trending?of?transplant?numbers.? ??In?some?cases,?the?patients?may?have?been?transferred?for?simplicity;?In?the?case?of? Chattanooga,?TN?many?patients?perceive?a?low?transplant?number?with?low?quality?(Bregel).? Empirical? ? Due?to?the?count?nature?of?transplant?data,?a?Poisson?Model?was?chosen.?The?model? type?is?most?useful?when?the?dependant?variable?is?a?count,?as?the?transplant?data?is.?To?test?for? biasness?caused?by?the?missing?hospital?demographics?or?dialysis?clinic?information,?a?binomial? probit?model?was?ran,?with?the?inverse?mills?ratio?being?stored?and?used?in?the?Poisson? Regression?to?correct?any?possible?biasness?caused?by?the?missing.?The?data?availability?for?most? observations?is?believed?to?be?random.? The?specification?for?the?Probit?and?Poisson?models?can?be?found?below.?? 31 PROBIT: PRODDUCO = one + ? 1 LIFEEXP + ? 2 BEDS +? 3 TPR + ? 4 HEMO + ? 5 PERITO + ? 6 NONPROFI+ ? 7 PCOLLEGE + ? 8 PCHRISTI +? 9 PPOVERTY +? 10 pblack+ ? 11 west +? 12s east+? 13 mwest + ? 14 glakes ? Poisson: t2008 = one + ? 1 LIFEEXP + ? 2 BEDS +? 3 TPR + ? 4 HEMO + ? 5 PERITO + ? 6 NONPROFI+ ? 7 PCOLLEGE + ? 8 PCHRISTI +? 9 PPOVERTY +? 10 pblack+ ? 11 west +? 12s east+? 13 mwest + ? 14 glakes +? 15 seast ? ? The?explanatory?variable?of?the?Poisson?regression?is?binary?and?represents?the?availability?of? data?for?an?observation.?This?variable,?Prodduco,?was?creating?by?evaluating?the?product?of?three? binary?variables.?The?first?one?represents?whether?demographic?data?for?the?hospital?was?on? reported.?The?second?represents?whether?dialysis?clinic?information?was?available,?a?value?of? one?represents?known?information?about?the?clinic.?The?third?and?final?variable?was?one? capturing?the?performance?of?transplants?in?recent?years,?a?value?of?one?equates?to?having?not? performed?any?transplants?since?between?calendar?year?2004?and?2008.?By?doing?this?any? observation?that?had?missing?data?was?included?in?the?explanatory?variable?in?the?Probit?model.? ? ? ? ? ? ? 32 Conclusion? Most?of?the?results?came?out?as?expected?and?as?shown?in?the?table?below,?a?full?output?is? shown?in?the?Appendix,?as?is?a?listing?of?the?descriptive?statistics?of?the?non?dummy?variables.? Table?4?Regression?Output?and?Expectations? ? The?notable?exception?to?the?expectations?was?percent?Christian?having?a?negative? coefficient.?In?prior?analysis,?Lawson?2008,?the?variable?was?found?to?be?marginally?significant? and?positive.?This?may?be?an?issue?relaying?donation?data,?specifically?cadaveric?donation?to?total? transplants.?Also?the?use?of?OPO?region?in?prior?analysis?rather?than?state?level?data?may? contribute?to?the?discrepancy.? The?variable?indicating?the?number?of?homeostasis?dialysis?machines?in?or?related?to?a? hospital?was?negative?as?hypothesized,?at?the?one?percent?significance?level.?This?variable?was? the?primary?inspiration?for?the?research.?In?the?Probit?model,?the?variable?was?significant,? implying?correlation?existed?between?the?missing?observations.?? Peritoneal?dialysis?surprisingly?came?back?significant,?implying?that?the?offering?of?the? treatment?had?an?impact?on?transplantation.?This?is?most?likely?to?the?disproportionate?ratio? between?the?two?treatments,?with?peritoneal?being?the?less?frequent?option?of?the?two.? 33 Rather?surprisingly,?the?variables?meant?to?capture?the?size?of?a?transplant?hospital? came?back?with?mixed?signs.?The?number?of?beds?was?negatively?correlated?with? transplantation.??One?possible?explanation?for?this?could?be?that?some?of?the?hospitals? particularly?may?not?be?as?large?regarding?the?number?of?rooms?and?staffed?beds,?mainly?dealing? with?out?patient?care?and?not?focusing?on?certain?treatments?that?would?require?extended?stays? and?the?capacity?to?handle?those?impacts.?Total?patient?revenue?for?2008?was?also?significant,?it? was?positive?as?expected,?showing?that?correlation?exists?between?a?measure?of?size?and?the? number?of?transplants?performed..? ? One?interesting?finding?was?that?the?offering?of?peritoneal?dialysis?had?a?negative?impact? on?transplantation.?This?was?expected,?as?the?incentives?to?offer?this?treatment?are?similar?if?not? more?enticing?than?peritoneal?dialysis?for?many?clinics.?As?estimated?costs,?at?least?at?one?time,? placed?the?costs?of?peritoneal?dialysis?around?half?the?price?of?an?equivalent?hemodialysis? treatment.? ? The?coefficient?for?dialysis?clinics?that?affiliated?themselves?as?non?profit?was?inversely? correlated?to?the?number?of?transplants?performed?at?a?hospital.?The?significance?of?this?variable? is?rather?troubling,?as?it?does?lend?credit?to?a?hypothesis?that?non?profit?providers?may?sacrifice? care?for?the?sake?of?revenue?or?other?purpose.?Granted?no?real?predictions?were?made?about?the? variable?as?nothing?lent?toward?signing?the?variable?one?way?or?another.?One?would?hope?to?see? a?positive?relationship?between?non?profit?status?and?transplantation.?This?finding?may?be?the? result?of?an?unknown?separation?of?the?clinics?and?the?transplant?hospital.? ? Percent?African?American?was?also?another?variable?that?had?the?anticipated?sign.?One? concern?with?the?sign?of?this?variable?was?the?greater?shortages?existing?in?the?African?American? Community,?as?the?incidence?of?hypertension?and?diabetes?is?higher.?However,?given? 34 preferences?and?past?success?rates?of?transplantations,?it?is?preferable?for?a?recipient?to?receive? a?kidney?from?a?donor?of?the?same?race?as?himself?or?herself.?The?preferences?come?from?the? decrease?in?complications?when?donor?and?recipient?are?of?the?same?race.?Percent?poverty?was? significant,?as?it?was?in?Lawson.?The?variable?was?positive?in?this?analysis.?? ? The?results?of?the?state?dummies?can?be?seen?in?the?chart.?Of?the?states?with?dummy? variable,?only?four?had?negative?and?significant?variables.?The?aforementioned?states?are? Colorado,?Massachusetts,?and?Oklahoma.?No?real?explanation?as?to?why?those?particular?states? have?negative?coefficients,?particularly,?Massachusetts.?The?state?has?eleven?hospitals?transplant? hospitals?in?2008,?a?possible?explanation?for?this?odd?finding?is?that?once?size?of?the?respective? hospitals?are?accounted?for?they?in?fact?perform?fewer?transplants.? ? The?mills?ratio?was?found?to?be?negative?and?significant.?The?inclusion?of?the?mills?ratio? compensates?for?possible?bias?caused?by?self?selection?bias?of?either?the?hospital?or?dialysis?data.? Take?Away? ? The?results?of?the?empirical?model?show?that?correlation?exists?between?the?dialysis? industry?and?the?number?of?kidney?transplant?performed.?The?relation?shows?the?incentives?of? the?dialysis?industry?may?be?impacting?kidney?transplantation.?The?results?show?an?inverse? relationship?between?both?the?number?of?dialysis?machines?and?the?offering?of?peritoneal? dialysis?and?transplantations.?The?correlation,?does?not?guarantee?a?causation?effect.?The? incentives?of?the?market?however,?support?the?theory.?A?clinic?has?the?incentive?to?perform? fewer?transplants,?as?the?loss?of?a?perpetual?income?stream?is?not?an?appealing?prospective. 35 References? Barnett,?,.?W.,?Saliba,?M.,?&?Walker,?D.?A?Free?Market?in?Kidneys:?Efficient?and?Equitable.? Independent?Review?,?5?(3).? Barnett,?A.?H.,?Beard,?T.?R.,?&?Kaserman,?D.?L.?(1993).?Inefficient?Pricing?Can?Kill:?The?Case?of? Dialysis?Industry?Regulation?.?Southern?Economic?Journal?,?60,?393?404.? Beard,?T.?R.,?Kaerman,?D.,?&?Saba,?R.?(2004).?Limits?to?Altruism:?Organ?Supply?and?Educational? Expenditures.?Contemporary?Economic?Policy?,?22?(4),?433?441.? Beard,?T.?R.,?Kaserman,?D.?L.,?&?Saba,?R.?P.?(2006).?Inefficiency?in?Cadaveric?Organ?Procurement.? Southern?Economic?Journal?,?73?(1),?13?26.? Bregel,?E.?(2009,?Otober?11).?Tranplant?Bottleneck.?Chattanooga?Times?Free?Press?.? DaVita.?(n.d.).?Definition,?causes?and?symptoms?of?chronic?kidney?disease.?Retrieved?September? 2009,?2009,?from?KIDNEY?DISEASE:?http://www.davita.com/kidney?disease/the?basics/a/91?? DaVita.?(n.d.).?The?basics.?Retrieved?10?25,?2009,?from?DaVita:? http://www.davita.com/dialysis/the?basics/a/45? Dor,?A.,?Held,?P.?J.,?&?Pauly,?a.?M.?(192,?October).?The?Medicare?Cost?of?Renal?Dialysis.?Medical? Care?,?879?891.? Ford,?J.?M.,?&?Kaserman,?D.?(1993).?Certificate?of?Need?Regulation?and?Entry:?Evidence?from?the? Dialysis?Industry.?Southern?Economic?Journal?,?59,?783?791.? Ford,?J.?M.,?&?Kaserman,?D.?(2000).?Suicide?as?as?Indicator?of?Quality?of?Life:?Evidence?from? Dialysis?Patients.?Contemporary?Economic?Policy?,?18?(4),?440?448.? Foundation,?N.?K.?(2009,?9?10).?25?Facts?about?Kidney?Donation.?Retrieved?9?10,?2009,?from? http://www.kidney.org/news/newsroom/fs_new/25factsorgdon&trans.cfm? Greene,?P.?J.?(n.d.).?The?Parts.?Retrieved?9?10,?2009,?from?What?are?the?Parts?of?the?Kidneys:? http://coe.fgu.edu/Faculty/greeneP/kidney/theparts.htm#cortex? Hoovers.?(n.d.).?INDUSTRY?OVERVIEW:?Kidney?Dialysis?Centers.?Retrieved?9?1,?2009,?from? http://www.hoovers.com/kidney?dialysis?centers/??ID__204??/free?ind?fr?profile?basic.xhtml? Kaserman,?D.,?&?Barnett,?A.?H.?(2002).?The?U.S.?Organ?Procurment?Systme:?A?Prescription?for? Reform.?Washington,?DC:?American?Enterprise?Institute.? Marcotty,?J.?(2009,?October?11).?National?Demand?for?Donor?Kidneys?Explodes.?Chattanooga? Times?Free?Press?.? Nix,?J.?(2009,?September?28).?I?love?my?socialist?kidney.?Retrieved?from?Salon:? http://www.salon.com/news/feature/2009/09/28/kidney_disease/print.htm? 36 Psst,?wanna?buy?a?kidney??Organ?Transplants.?(2006,?November?18).?The?Economists?,?381? (8604),?p.?15.? Radcliffe?Richards,?J.,?Daer,?A.?S.,?Guttman,?R.?D.,?Hoffenberg,?R.,?Kennedy,?I.,?Lock,?M.,?et?al.? (1998).?The?Case?for?Allowing?Kidney?Sales.?Lancet?,?351?(9120),?1950?52.? Randhawa,?G.?(1998).?An?explanatory?study?examining?the?influence?of?religion?on?attitudes? toward?donation?among?the?Asian?population?in?Luton,?UK.?Dialysis?and?Transplantation?News? (13),?1949?1954.? Roth,?A.?E.?(2008).?What?Have?We?Learned?from?Market?Design??The?Economic?Journal?,?118,? 285?310.? Sharing,?U.?N.?(n.d.).?who?we?are.?Retrieved?11?2009,?11,?from?United?Network?for?Organ? Sharing:?http://www.unos.org/whoWeAre/regions.asp? Siminoff,?L.,?Gordon,?N.,?Hewlettt,?J.,?&?Arnold,?R.?M.?(2001).?Factors?Influencing?Families'? Consent?for?Donation?of?Solid?Organs?for?Transplant?Organs.?Journal?of?the?American?Medica? Association?,?286?(1),?71?77.? University?of?Chicago?Medical?Center.?(n.d.).?New?hemodialysis?system?lets?patients?treat? themselves?at?home.?Retrieved?from?University?of?Chicago?Medical?Center:? http://www.uchospitals.edu/news/2004/20040726?dialysis.html? Web?Md.?(n.d.).?Acute?Renal?Failure.?Retrieved?October?20,?2009,?from? http://www.webmd.com/a?to?z?guides/acute?renal?failure?topic?overview? Williams,?R.?D.?(n.d.).?Web?MD.?Retrieved?September?10,?2009,?from?Living?Day?to?Day?with? Kidney?Dialysis:?http://www.webmd.com/a?toZ?guides/function?kidneys? Your?Religion.?(2008,?November?15).?Retrieved?November?15,?2008,?from?Transplant?for?Life:? http://www.transplantforlife.org/miracles/religion.html? Yuen,?C.?C.,?Burton,?W.,?Chiraseveenuprapund,?P.,?&?Elmore,?E.?(1998,?January).?Attitudes?and? Beliefs?about?Organ?Donation?Among?Different?Racial?Groups.?Journal?of?the?National?Medical? Association?.? ? ? 37 Appendix?? --> DSTAT;Rhs=t2008,LIFEEXP,BEDS,TPR,HEMO ,PERITO,NONPROFI,PCOLLEGE,PCHRISTI,PPOVERTY,pblack$ Descriptive Statistics All results based on nonmissing observations. =============================================================================== Variable Mean Std.Dev. Minimum Maximum Cases =============================================================================== ------------------------------------------------------------------------------- All observations in current sample ------------------------------------------------------------------------------- T2008 55.7491525 62.5855995 .000000000 347.000000 295 LIFEEXP 76.8047458 1.37965459 72.0000000 80.0000000 295 BEDS 450.908475 522.421470 .000000000 7020.00000 295 TPR 336195296. 880303274. .000000000 .643111916E+10 295 HEMO 7.20000000 14.2982326 .000000000 93.0000000 295 PERITO .271186441 .445327537 .000000000 1.00000000 295 NONPROFI .322033898 .468049868 .000000000 1.00000000 295 PCOLLEGE 28.1366102 5.66862249 15.9000000 49.1000000 295 PCHRISTI 49.1445161 9.02724515 30.0608611 74.2798686 295 PPOVERTY 12.5864407 2.61275376 5.80000000 22.6000000 295 PBLACK .129901011 .952569505E-01 .865646200E-02 .544107882 295 Matrix: Las [11,7] 38 -> PROBIT;Lhs=PRODDUco;Rhs=one,LIFEEXP,BEDS,TPR,HEMO ,PERITO,NONPROFI,PCOLLEGE,PCHRISTI,PPOVERTY,pblack,west,seast,mwest ,glakes;hold$ Normal exit from iterations. Exit status=0. +---------------------------------------------+ | Binomial Probit Model | | Maximum Likelihood Estimates | | Model estimated: Nov 23, 2009 at 05:59:13PM.| | Dependent variable PRODDUCO | | Weighting variable None | | Number of observations 295 | | Iterations completed 9 | | Log likelihood function -34.84278 | | Restricted log likelihood -171.4112 | | Chi squared 273.1369 | | Degrees of freedom 14 | | Prob[ChiSqd > value] = .0000000 | | Results retained for SELECTION model. | | Hosmer-Lemeshow chi-squared = 4.07985 | | P-value= .66587 with deg.fr. = 6 | +---------------------------------------------+ +---------+--------------+----------------+--------+---------+----------+ |Variable | Coefficient | Standard Error |b/St.Er.|P[|Z|>z] | Mean of X| +---------+--------------+----------------+--------+---------+----------+ Index function for probability Constant 71.8791330 24.6131746 2.920 .0035 LIFEEXP -1.01441624 .32686577 -3.103 .0019 76.8047458 BEDS .00349763 .00066742 5.241 .0000 450.908475 TPR -.752243D-10 .246946D-09 -.305 .7607 .336195D+09 HEMO .13442201 .02608267 5.154 .0000 7.20000000 PERITO .08560137 .41703821 .205 .8374 .27118644 NONPROFI 3.10922645 .59357885 5.238 .0000 .32203390 PCOLLEGE .07878563 .06260001 1.259 .2082 28.1366102 PCHRISTI .01249135 .02321334 .538 .5905 49.1445161 PPOVERTY -.18093325 .10264698 -1.763 .0780 12.5864407 PBLACK -4.59785149 4.46255072 -1.030 .3029 .12990101 WEST 2.35992649 .93706357 2.518 .0118 .19322034 SEAST .83426349 .76271883 1.094 .2740 .30169492 MWEST .42151250 .78854109 .535 .5930 .13559322 GLAKES .16390178 .81163532 .202 .8400 .19322034 +----------------------------------------+ | Fit Measures for Binomial Choice Model | | Probit model for variable PRODDUCO | +----------------------------------------+ | Proportions P0= .732203 P1= .267797 | | N = 295 N0= 216 N1= 79 | | LogL = -34.84278 LogL0 = -171.4112 | | Estrella = 1-(L/L0)^(-2L0/n) = .84300 | +----------------------------------------+ | Efron | McFadden | Ben./Lerman | | .81614 | .79673 | .92691 | | Cramer | Veall/Zim. | Rsqrd_ML | | .81542 | .89445 | .60382 | +----------------------------------------+ | Information Akaike I.C. Schwarz I.C. | | Criteria .33792 154.99018 | +----------------------------------------+ Frequencies of actual & predicted outcomes Predicted outcome has maximum probability. Threshold value for predicting Y=1 = .5000 Predicted ------ ---------- + ----- Actual 0 1 | Total ------ ---------- + ----- 0 210 6 | 216 1 6 73 | 79 ------ ---------- + ----- Total 216 79 | 295 39 ======================================================================= Analysis of Binary Choice Model Predictions Based on Threshold = .5000 ----------------------------------------------------------------------- Prediction Success ----------------------------------------------------------------------- Sensitivity = actual 1s correctly predicted 92.405% Specificity = actual 0s correctly predicted 97.222% Positive predictive value = predicted 1s that were actual 1s 92.405% Negative predictive value = predicted 0s that were actual 0s 97.222% Correct prediction = actual 1s and 0s correctly predicted 95.932% ----------------------------------------------------------------------- Prediction Failure ----------------------------------------------------------------------- False pos. for true neg. = actual 0s predicted as 1s 2.778% False neg. for true pos. = actual 1s predicted as 0s 7.595% False pos. for predicted pos. = predicted 1s actual 0s 7.595% False neg. for predicted neg. = predicted 0s actual 1s 2.778% False predictions = actual 1s and 0s incorrectly predicted 4.068% ======================================================================= 40 --> poisson;Lhs=t2008;Rhs=one,LIFEEXP,BEDS,TPR,HEMO ,PERITO,NONPROFI,PCOLLEGE,PCHRISTI,PPOVERTY,pblack,seast,west,mwest ,glakes;selection;keep=yh$ +---------------------------------------------+ | Poisson Regression | | Maximum Likelihood Estimates | | Model estimated: Nov 23, 2009 at 05:59:14PM.| | Dependent variable T2008 | | Weighting variable None | | Number of observations 295 | | Iterations completed 6 | | Log likelihood function -1373.722 | | Restricted log likelihood -2085.415 | | Chi squared 1423.385 | | Degrees of freedom 15 | | Prob[ChiSqd > value] = .0000000 | | Chi- squared = 2243.74073 RsqP= .4434 | | G - squared = 2298.08747 RsqD= .3825 | | Overdispersion tests: g=mu(i) : 6.986 | | Overdispersion tests: g=mu(i)^2: 7.283 | +---------------------------------------------+ +---------+--------------+----------------+--------+---------+----------+ |Variable | Coefficient | Standard Error |b/St.Er.|P[|Z|>z] | Mean of X| +---------+--------------+----------------+--------+---------+----------+ Constant -37.1493586 2.11892834 -17.532 .0000 LIFEEXP .55698367 .02718550 20.488 .0000 76.7430380 BEDS -.00012206 .204319D-04 -5.974 .0000 661.126582 TPR .167090D-09 .201748D-10 8.282 .0000 .430898D+09 HEMO -.01557950 .00109396 -14.241 .0000 23.0000000 PERITO -.37856256 .03472152 -10.903 .0000 .68354430 NONPROFI -.84733203 .05434405 -15.592 .0000 .86075949 PCOLLEGE -.00762697 .00489225 -1.559 .1190 29.2240506 PCHRISTI -.03196952 .00211026 -15.150 .0000 49.8875012 PPOVERTY .07448478 .00852484 8.737 .0000 12.3936709 PBLACK 5.09575790 .39318071 12.960 .0000 .13710477 SEAST .29870372 .05802184 5.148 .0000 .27848101 WEST -.35794327 .06956301 -5.146 .0000 .15189873 MWEST .59576008 .06910843 8.621 .0000 .16455696 GLAKES .94594354 .06546048 14.451 .0000 .16455696 MlsRatio -.72149793 .04807735 -15.007 .0000 .24347196 ?? ? ? ? ? ? ? ? ? ? ? 41 ? ? ? ???????????????????????????????????????????????????????????? ?