"\' 
THE ACCESS OF 
FOREIGN NATIONALS 
TO U.S. CADAVER ORGANS 
.. SERVI('t 
Richard P. Kusserow 
INSPECfOR GENERAL 
"1 
'l1f"cl3C1 .  AUGUST 1986  Office of the Inspector General

ission of the Office of the Inspector General (OIG) is

The 
to promote the efficiency, effectiveness and integrity of

programs in the United States Department of Health and Human

Services 
(HHS), It does this by developing methods to 
detect and prevent fraud, waste and abuse, Created by
statute in 1976, the Office of the Inspector General "keeps
both the Secretary and the Congress fully and currently

icnformoed  aubout nprogrtamrs ory mana,ge ment problems and 
recommends corrective actior. . The OIG performs i ts mission
by tonducting audits 
, investigations and inspections with
approximate:y l , 200 staf f 
strategically located around the
Office of A alysis and Inspections

This report is produced by the Office of Analysis and
Inspections 
(OAI), one of the three major offices within the
OIG, 
The other two are the Office of Audit and the Office
of Investigations, 
OAl conducts inspections which are 
typically short-term stud es ' designed to determine program
effectiveness 
, efficie cy and vulnerability to fraud or
abuse, 
Thi s Re::ort 
Entitled " 
The Access of Foreign Nationals to  Cadaver 
U. S. 
Organs  " this report is based on a comprehensive study 
conducted to help the U. S, Department of Eeal th and Human 
Services and other interested parties gain a better 
understanding of the effectiveness,U ef.fi ciSenc.y  and equity of
organ acquisition practices in the 
The study was prepared by the Regional Inspector General

Office of Analysis and Inspections , Boston Region.

Participating in the proj ect were the following people: 
Boston Reqion  Headquarters Office 
Mark R. Yessian, Ph. D,  Betty S. Burrier

(proj ect Leader) 
Rosalind A. Dailey

. Barry 
McCoy 
Eleanor Ellis
 'L. E: ACCESS OF FOREIGN 
NATIO  A:S TO U. S. CADAVER ORGANS 
AUGUST 1986 
Ol-86-00074 
TF, :):' . NU!-:EER 
Regior. I 

assachusettsOf fice of Analyis and Inspections
Bosto 
Office of the Inspector General
Department of Heal 
th and Human Services  y. ..  ..  ..  ..  ..  ..  ..  ..  ..  ..
  ..  ..  ..  ..  ..  ....  .. ....  ... . .. ... ....  .. .. .. ..  ..  . .. .. 
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TABLE OF CONTENTS

Major Findings.......................................... 1i

11i 
Recommendations. 
Introduction. 
Foreig  ctio 
a:s Receivi 
Transplants in the U. S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 2 
Incide:-ce. 
The District of Columbia............................ 5

Implica.ti.ons. 
Exporting Cadaver Kidneys

to Other Countries.................................... .

Imp.
lica tions. 
Recommendations. 
Appendix I: Eackgrounc 
and Methodolo 
ethodology for 
Appendix II: 

edicare Cost Savings Estimates.  AJOR FINDINGS

An estimated 300 foreign nationals received a cadaver
S. in 1985. 
kidney tra  splant in the U.  This represents 
2 percent of the cadaver donor transplants per%ormed 
in the U. S. in that year. 
In a divided vote, the Task Force on Organ
Transplantation 
, esta lished by the National Organ 
tht no 
Transpl ant Act of 1984 , recently recommended 
more than 10 percent of the transplants at any center 
should be provided to foreign nationals. This 
recommendatio  could have the unintended effe
legi timizing a 
higher incidence of transplants fer 
foreign nationals at centers now functioning we

the 10 percent level. 
In the District of Columbia, foreign nationals TEcei 
tranplants 
abo  t 22 percent 0: the 181 cadaver kidney 
1985. 
performed in  This is especially striking because
( 1) the incidence of dialysis in the District .. .,more 
than twice the national average and (2) a major

Dist ct en
tary hospital , which is located in the 
mwili hich perfo  ms transplants for mili tary perso 
dependents from all over the world, is no longelris t. 
accepting additions to its transplant waiting  ths 
The shortage of kid eys is cited as a basis for 
policy. 
An estiIT,ate:3 200-250 kidneys were exported 
:f 
S. to other countries in 1985. 
zeceiving 
Medicare policy does not require that 
foreign.  expored
centers pay the full acquisition cost of 
eys. 
kid  As a resul t 
, the Medicare program 
is, 
effect, subsidizing m ch of the acquisition cost Df 
countries. 
kidneys sent to other 
There are a number of unfortunate implications 
associated with foreign national access to U.S. cadaver
kidneys.  following: 
Among them are the 
For U. S. residents , the number of kidneys 
available is reduced and the average wait  g t

increased. 
National organ sharing is 
discouraged. 
 wating

avail abi 1 i ty of foreign nationals on a 
rovides a disincentive to sharing.

list 
increased. 
Medicare costs are 
Orga::  de:-. c:: i 0;)  is jeopardized.  Foreign nationals, on average, are more quickly

serviced.

Post-tranplant  jeopardized.

care  is 
lost. 
Valuable outcome data is 
'RE COM!1)A TI 
HCFA should undertake ezfars to  hat 
help ensure  ionals 
cadaver kidneys are not offered to foreign na 
unless it has been determned that no .sui table U. S . 
recipient can be zound. 
HkCFAi dshonulde unydersta kea e:ff:orets  tno hoelpt  ensure

expDrted to other countries unless it
has been deter.min  table U.  can 
th2t no  sui  s.  recipient 
be :found. 
counies, 
When kidneys are sent to other  HCFA should 
prohibi t Medicare Teimbursem-:t for any of the 
acquisi1:itm t:sts of those kidneys. 
ions 
These recommenda  arIied out, would allow for an
if
estimated 508 addi tionel Medicare beneficiaries to receive a 
t during 1987. 
cadaver kidney transp12  The Medicare cost 
savings generated in that year would be an estiated $37. 
ffllion over 5 years .. .
...... ....... .. ......"... . .... .. ." . ' .. " .
INTRODUCTION 
Recent advances in transplantation technology and 
immunotherapy are ushering in a new era of multiple organ
and tissue recovery. 
Instead of excising just kidneys, 
organ recovery teams are increasingly removing hearts, heart 
tiaslsveuse, .l ivers, pancreases , bone marrow, cornea, and other
This development adds to the significance, 
visibility of the acquisition process.
complexi ty and 
also makes it especially important that the more established 
efficient, 
kidney acquisition process functions in an 
effective, and equitable manner, for, in large measure, that 
process is serving as a model for organ acquisition
generally. 
With respect to cadave  kidney transplants , on which this 
report will concentrate , the improvements in patient 
strikin;. 
outcomes have been  One year patient survival 
percent. 
rates are now averaging about 93  One year graft 
survival rates are averaging about 75 percent, with some 
level. 
centers reporting results well above the 80 percent 
In the late 1970s , in contrast , cadaver kidney graft 
survival rates were averaging only a little over 50 percent. 
A major factor behind these gains was the widespread

introduction in Nove ber 1983 of cyclosporine, a powerful

immunosuppressi ve drug. Studies have shown that the use of

cyclosporine has been responsible for increasing one year

graft survival rates by a~ywhere from 8 to 12 percent and

has been particularly valuable for patients who are

highly-sensi tized (i. e. , have a high level of preformed

antibodies) and who have received a kidney with a low

antigen match.

Accordingly, there has been a considerable increase in the

level of kidney transpl ant a tion occurring in the U. S. From 
1980 to 1985, the annual incidence increased from 4 697 to 
8 percent. 
695 , an increase of 63.  During this period
cadaver transpl ants incre osee from 72. 9 percent of the total 
to 75. 6 percent. 
However , while the number of transplants rose, the demand 
for transplants increased even faster (see chart). During 
the 1980-1985 period, the number of people awaiting kidney 
idn.v Transplants

pati.nts R.c.ivin.  &itin  Transplants
and Pati.nts 
 '85 
10. 000 r  '80 - waitin
Pati.nts Transplan\s
8000  P&ti.nts R.c.ivin 
Transpl an ts
OOO 
4000 
2000
1980  19E!  1'62  198  1984  1985  transplants across the country jumped from 5, 072 to 9, 791 
an increase of 93 percent.

In this kind of situation, where the demand is greater than

the currently available supply, access to that supply

atte  of public policy. This report
becomes a key 

- addresses  i th respect to foreign
that access issue 
nationals. It looks first at the phenomenon of nonresident

81 iens coming to the U. S. to receive transplants. It then 
turns to the practice of exporting cadaver kidneys from the

s. to other countries. 
Finally, it closes with three
recommendations concerning Federal policy.

FOREIGN NATIONALS RECEIVING TRANSPLANTS IN THE U. 
:IDE 
For more tha  a decade , foreign nationals have been coming

to the U. s. to reaoe lii vvien ga  rkeildanteeyd t draonnsoprl.a nt. At first, most

would come 
 But as the success 
wi th cadaver organ transplants increased, the proportion of
rose. 
foreign nationals receiving such organs 
Currently, it
seems that at least 90 percent of the transplants performed 
on foreign natio~als in this country involve a kidney
removed fro 
a cadaver. 
Those who have travelec to the U. S. for a kidney transplant
have usually done so to gain access to a more skilled tech
nology than is available in their own country. But a numbe 
of other propelling factors have also been involved. These 
have included religious and/or cultural principles that 
restrict the use of cadave  orga  s in their own country.
They have also included active solicitation by a few U. 
transplant centers seeLing to supplement their domestic 
activi ty. Over the years the individuals who have received 
transplaDts in the U. s. have co e from countries all over 
the world, with the significant concentrations recently from

Saudi Arabia and Greece.

For many years , this practice attracted little attention.
However , as the demand for transplants began to increase, it 
controversial. In 
became increasingly visible and 
November
1983 , the House Subcommittee on Investigations and Oversight 
of the Committee on Science and Technology gave maj
. attention 
to the transplantation of nonresident aliens as 
part of a broader set of hearings on organ procurement and
allocation. 
Subsequently, the media began to focus on the
. issue and heig  tenej public awareness. 
ost pro inent in this regard was the Pulitzer Prize winning 
series of reports put  ishe6 by 
 Th1e 9P8i t5t.s buroh Press , first
ay 1985 and then in November 
in  These covered a wide  y. 

among which were the exporting of U. 
range of issues 

cadaver kidneys overseas and the transplanting of foreign 
country. 
nationals in this  The latter involved allegations 
of weal thy foreign patients being given preference for 
transplants at the major transplant center in Pittsburgh. 
There is no clear indication of the incidence of kidney 
transplants performed in the U. S. on foreign nationals or of
the impact of the widespread publicity on the level of such
transplants. 
The Health Care Financing Administration 
(HCFA) of the U. S. Department of Health and Human Services 
(HHS) does collect annual dast.a  from all 178 Medicare 
certified transplant cente  This data distinguishes 
transplants on Medicare recipients from those on 
non-Medicare recipients , but it does not break down the 
atter categc  In aedi tion to transplants paid by or on 
alf 0= fo  gn nationals , the non-Medicare category ca
include transplants fo 
individuals covered by the Veterans
inistration  edicaid 
, and private insurers. (A 1981 
:edicare to serve as a 
secondary payer
Pamendment rcalls foro 
 gram. ) 

for all transpl ants performed duri g the first year of a
beneficiary 
s coverage under the End Stage Renal Disease
Given the lacK of data and the heightened congressional 
interest in the matter of transplants for foreign nationals 
both HCFA and the Ame ican Society of Transplant Surgeons 
1983. 
(ASTS) conducted surveys of transplant centers in  The 
HCFA data , based on (often incomplete) responses from 137 of 
157 centers , identified 122 nonresident aliens receiving 
transplants in 1921 , 137 in 1982 , and 79 in the first 6
months of 19 
E3 . 
The ASTS data , based on responses from 82 centers
ide 
tified 1  2 nonresident aliens having transplants in
1982. Further , it indicated that 117 (82. 4 percent) of
these individuals had cadaver transplants and that only
eig 
t centers accounted for 50 percent of these 117 
transplant operations. 
Because of the incomplete information, this data cannot be 
relied upon to provide a full accounting of the incidence of 
1980s. 
transplants for nonresident aliens in the early  Yet,
it helps provide the basis for a reasonable estimate if one 
takes into account that there were 441 non-Medicare

transplants in 1982 and 496 in 1983 , and that these non-

Medicare totals included relatively few Veterans

inistration  edicaid 
ants.  , or private insurer covered 
transr 1  Suc  an esti ate might be an annual level of
200-250 cadaver transpl ants. Considering that there were  681 cadaver transpla ts in the U. S. in 1982 and 4 328 in 
1983, this 200-250 estimate results in 5. 4 to 6. 8 percent of
all cadaver transplants in 1982 and 4. 6 to 5. 8 percent in
1963. 
Since this survey activity and the November 1983 
hearings, a
number of transplant centers on their own initiative have 
developed more restrictive policies concerning the 
nationals. 
transplanting of foreign  Typically, these
involve specifying that u. S. residents will be given 
priori ty consideration for cadaver donor transplants. 
But, because other centers have become more accommodating to 
foreign nationals (usually without any explicitly stated 
policies) , it does not necessarily follow that the annual 
level vf transpla ts for forse.i gn nationals has decreased 
during the past 2 to 3 yea  In fact, it may have
increased. 
The HCFA data suggest that such an increase is quite 
possible (see table below) as the annual level of 
non-Medicare transplants in 1984 and 1985 increased to 
1983. 
almost twice that of  Some of this increase is 
accounted for by a j u  p in the number of non-Medicare 
covered transplants for those recorded as having Medicare 
applications pending (275 in
19S5). 
1984 and 375 in  Some is probably also explained by 
c: t 
the implementatio  e secondary payer provision
referenced earlier. But it would still appear that a 
substantial number 0: the nearly 1 000 non-Medicare 
transplants in 1985 were fer foreign nationals. 
KIDKEY TRA SPLA  EDlCARE A D NON-MEDICARE COVERAGE 
, BY

(Cale  dar Years 1981-1985) 
MEDICARE 
TOT AL  NON- Percentage
Year  Transplants  edicare  Medicare  Of Total 
1981  4885  4421  464  90. 
1982  5358  4917  441  91. 
198  6112  5616  496  91. 
1984  6965  6029  939  86. 
1925  7695  6698  978  87. 
Source:  Health  Care  Financing  Administration  Taking into account the above noted factors, we estimate 
that 300, or less than one-third of all the non-Medicare 
transplants in 1985 , were for foreign nationals receiving a 
donor. 
transplant obtained from a cadaver  This represents
2 percent of the 5,  ' donor transplants that

819 cadaver
ook place in the U. s. in that year.

Perhaps even more notable is that two recent developments 
provide a good basis for assuming that this rate will remain 
about the same in the years ahead or may even increase. One 
serves to legitimize a rate of transplantation for foreign 
nationals at 10 percent per  5 percent.
center; the other  at 
The 10 pe cent maximum comes from the Task Force 
ation 
on Organ Transplan  , which was established by the
t. 
Katio  al Organ Tra  Act of 1984 and which recently
issued its fins 
1 rep  a divided vote, the Task Force 
recommended thst transplants for nonresident aliens not 
comprise more than 10 perce t of the transplants at any
particular center 
(but that non-renal organs should not be 
offered for transplantatiQn to such individuals unless no
other sui table recipient can be found). They specified that 
this policy should apply until the soon tp be established 
national organ procure ent and transplantation network has 
had an opportunity to revie  the issue. 
The 5 percent maxi  comes fro  the American Society of 
(AS:S). In 
Transplant Surgeo  a recently adopted set of
guidelines 
, the AS S stated that the percent of transplants 
for nonresid  t aliens "must no  exceed an average 5 percent 
per year of the orga s transplanted at any single center. 
Both of those pronouncements were meant to have an
inhibi ting 
effeaclts o.n  the incidence of transplants for 
foreign natio  The Task Force , for instance, 
established the 10 percent ca  with the idea of 
reducing the level of foreign national activity at the few 
transplant cente s nOvi functioning at a higher than the 10 
percent level. But by lending authority and credibility to 
a level of 5 or 10 percent, both these entities may, however 
inadvertently, be providing a rationale for many centers now
performing below these levels , to become more inclined to 
nationals. 
conduct transplants for foreign 
THE DISTRICT OF COLU EIA 
As suggested above , the incidence of transplantation for

country. 
foreign nationals varies across the  While 7. 
percent of all individuals having transplants in the U. S. 
1985 ha  neither existing nor pending Medicare coverage
 the proportion in some states was considerably higher. 

5 percent;

examples, Massachusetts had a rate of 15. 
Tennessee - 13. 0 percent; Louisiana - 11 percent and

3 percent. Illinois 
New York - 11.  , which had a rate of 12.

1985. Similarly, 
percent in 1984 , dropped to 3 percent in 
California declined from 18. 7 to 8. 2 percent during the same
period. 
In recent years, by far the highest rate of non-Medicare

transplantation has been in the District of Columbia. 
(Here 
and subsequently, in referring to the non-Medicare category, 
we are excluding from consideration those individuals who 
have had transplants and have Medicare applications
pending.  In 1965 , non-Medicare transplant patients 
accounted for 31 percent of all those receiving kidney
transplants within the Distri  6 percent in
, up from 24. 
1934. 
Three 0: the five trcnsplant centers in the District 
performed 30 percent or ffore of their transplants on 
non-V,e=icare pctien s (see tcble below). 
TRANSPLA  T PATIENTS IN THE 
DISTRICT OF COLUMBIA, BY 
TRA  SPLANT CENTER 
TOTAL A D NON-MEDICARE 
(Calendar Year 1985) 
Total Transplants
Center  Patie~ 
Non-Medicare Patients
Number 
As % of Total 
45. 
30. 
103  33. 
12. 
TOTAL  213  31.  (avg. 
Source:  Heal th Care  Financing  Administration 
ree of t 
Our review of t  e transplant centers in the 
District showed that almost two-thirds of the non-Medicare
transplants t 
t occurre= in these centers involved foreign  nationals and that nearly all of these transplants involved

the use of cadaver kidneys. Thus, when considering that

there were 181 cadaver kidney transplants performed in the

District in 1985, we find that about 22 percent of those

- transplants 
were for the benefit of foreign nationals. 
Clearly, the nation s diplomatic center is also a center for 
foreign nationals receiving kidney transplants. 
At the same time, the District of Columbia has a higher

This is 
incidence of dialysis than any state in the nation. 
reflected by the fact that in 1982, the District' s Medicare

End stage Renal Disease (ESRD) program incidence rate was

228 per million population. This compared with a rate of

108 for New Jersey, the highest of any state, and of 87

for the country as a whole. 
ould otherwise be available 
s mea 
s that kidneys that 

for District residents aViai ting a transplant are being

offered to foreign nationals.

Similarly, some members of the military and their families 
are also denied the opportunity to receive a transplant 
because of the access obtained by foreig  nationals. A 
major military hospital located in the District performs
transplants for 
U. S. military personnel and their dependents 
over the worle. 
from all  As of July 1986, it had a waiting 
list of 56 and was not accepting any new entrants because of
the limi tee 
supply of cadaver kidneys. 
is 
In perspective  iw.p  rtant to recog ize that while the
proportio  it
of foreign nationals receiving transplants in the 
District is high, so is the overaSllt aletveesl .o f transplant 
activi ty compared to that 0: the  In 1985, patients 
who had a tra splant accounted for 25 percent of the total 
dialysis popul  tion in the District, compared with a
national average of 9. 1 percent. 
This means that when the 
non-Medicare cases are excluded, the District still has an 
ants. 
above average rate of transpl  But it does not follow 
that District residents are benefitting sufficiently from 
these transplants inasmuch as two of the five centers 
are major, high volume centers attracting many patients from
surrounding States. 
IMPLICATIONS 
any professionals in the transplant fj eld express 
considerable unease with as heavy an orientation to foreign 
nationals as exists in the District of Columbia. It -is that 
kind of unease that underlies the limits proposed by the 
Task Force ar.d the ASIS.  However , many of these professionals also feel that a lesser 
level of activity, at the 5 to 10 percent level , is not
, in fact, is beneficial. 
detrimental  Physicians
, and 
associated with transplant programs are particularly likely
to hold this view. 
It is well reflected in the following 
t. 
ovember 1983 hearings on organ

comments made at the 

. procureme  The first is by Dr. Peter Ivanovich, a 
nephrologist at the Chicago Veterans Administration 
Lakeside Medical Ce ter; the second by Dr. Nicholas J. 
Feduska , a transplant surgeon at the University of
California 
, San Francisco: 
We believe that medicine , like music, should 
recognize no cultural or national barriers.
We ca  providE a service which, in turn
allo 
s institutions in this country to profit
fro  expErie  cE gained from a select group of
patients 
, some with conditions physicians do 
not normally e counter. In addition, the fees 
that they help pay de ray the costs normally 
borne by those hospitals and third party
payers. " 
ost physicia s and surgeons take the view 
that medicine  . sho :d not be considered 
in nationalistic terms is a human
line  , that  it 
istic disci  , and that their services and 
ade available to all citizens
oskilfls  sthohulde be  
world. 
As long as this is not a problem 
of substantial magni tude , it might best be left
alone. " 
The call for an international , humanistic approach presents

an attractive and important ideal. However, like any ideal

it must be exa ined in ter s of associated realities and

practical effects. In the present environment, where the

u. S. demand for cadaver kidneys exceeds the supply, the
application of this ideal involves some realities and 
value. At 
effects that clearly undermine its  least seven of 
them deserve serious consideration. 
Foreion nationals 
, on averaae, are more quickly
serviced 
We did not find or hear of any transplant 
center that gives priority to foreign nationals.
However , many, and probably most, do not have an 
erxepsliidcie nt tpso.l iIcty  iosf  granting preference to U. S"
widely noted that among such centers
foreig 
nationals cn a waiting list tend to receive a  transplant more quickly than the U. S. residents. The 
major reason for this is that fewer of them are likely
to be highly sensi 
tized (which means that their chances 
higher). 
of receiving an acceptable kidney are  During
the November 1983 hearings immy Light, Director
, Dr. 

of Organ Procurement and Transplantation at the

Washington Hospital Center, explained this reality as

follows: 
They (foreign nationals) are a more favorable 
group to find a kidney for, in the sense that 
almost all of them are first transplants. Few 
of them are sensitized so that the cross matches 
are generally negative and you can accept, if you
..:ill 
, a lesser match. 
During t  e hearing, 
e sa  Dr. Light also noted that at
The Washington Hospi tel Center, at that time, the mean
ting tiffE for 
wai  foreign nationals was 16 weeks 
compared with 41 weeks for Medicare recipients. 
both cases , the waiting time was slightly greater for 
, and 
those with 0 blood type slightly less for those 
A blood type. 
wi th 
For U. S. . residents , the number of cadaver kidneys 
available is reduced and the average waiting time is
increased. 
rofessiona1s counter this point by
Some 
noting that many or most of the kidneys going to

foreign nationals would otherwise be discarded. But 
wi th close to 10 000 people awaiting kidney transplan
tation in the U.  , it is difficult to understand why 
nearly all c  the 300 or so cadaver kidneys being 
transplantec into foreign nationals could not be 
provided to U. S. residents -- that is, unless a 
transpl ant center is disinclined to share kidneys with 
other centers in its region or in the nation. 
National orca~ sharinc is discouraced  As we will

address in a subsequent report, the extent to which 
kidneys are being shared on a national basis has been 
years. 
decreasing during the past 2  Primarily this is 
because of the introduction of cyclosporine and its 
association with improved outcomes, even in a patient 
wi th a poorly matched donor kidney. But the 
aveilabi1i ty o  foreign nationals on a waiting list 
sharing. It
clearly provides a further disincentive to 
provides a center with a greater opportunity to use a 
kidney rather than to send it to another center.  ) .

This reality was directly addressed during the November 
1983 hearings by Dr. John McDonald, chief transplant 
surgeon at the Louisiana State University Medical 
Center and then president of the South-Eastern Organ
Procureme  t Foundation (SEOPF). 
In explaining the justification for his own center

policy of not accepting foreign nationals, he commented

as follov.' 
We are personally fearful that if we had 
nonresident aliens on our own list that we would 
use organs locally that we would otherwise have 
shared wi th othe  institutions and thereby in a 
secondary way deny kidneys to American citizens. 
Medicare costs are increased  Over time , transplan
tation not only affords the recipients the likelihood 
of a healthier and more independent life, but also 
edicare progra  with the opportunity to 
provides the 

save money. Thisd iiasl ybesciasu.s e transplantation, over time
costs less than .
Just how much less cannot be 
definitively determined. However, on the basis of HCFA 
data on dialysis costs and a recent Rand Corporation 
study on the cost effects of kidney transplantation, we 
estimate that for each transplant performed on a 
Medicare beneficiary in 1985 there was an average cost 
savings of $52 000 over a 5-year period. For 1987, we 
estimate that this savings will increase to $75 000
(see Appendix I I 
I f we assume the. t 
275 of the estimated 300 cadaver 
donor transplants performed on foreign nationals in 
1985 were instead performed on Medicare recipients
then 
, on the basis of the above estimate, Medicare 
could have saved abo  $17 million over 5 years. The 
opportuni ty for additional savings would, of course 
apply for each subsequent year. 
Orcran donation is jeopardized  Organ donation in the 
foundation. 
u. s. rests on a fragile  People donate 
organs with the assumption that the system for 
will be a fair one. 
distributing the  When they learn 
that foreign nationals receive organs instead of u. 
residents and that they generally do so in a shorter 
period of time , they begin to question the fairness of 
that system and may very well become less inclined to 
donate. Indeed , in some communi ties where there has 
been much publici ty about foreign nationals receiving 
transplanted kidneys , there has been a subsequent 
reduction in d n e. ti on  evels. 
.i  , ,
The Task Force, in supporting its recommendation that

would allow up to 10 percent of the transplants to be

performed on foreign nationals, stated that public

concern about foreign nationals receiving cadaver

kidneys is directed to policies that reflect

favoritism and injustice  . not against sharing 
se. II Yet such a 
wi th non-immigrant aliens pedrr awn. (Is it
distinction is not readily 
inj ustice 
, for instance , that foreign nationals are 
likely to spend less time on the waiting list?)
Further 
, when the media and the public address issues 
of organ shortage, questions are bound to be raised 
about the fairness of sharing scarce organs with 
foreign nationals and about the equity of the 
processes that cetermine who among the thousands of 
otentially interested foreign nationals are actually 
given access to U. S. cadaver kidneys. 
Post-transpl ant care is compromised  Transplant 
surgeons stress that post-transplant patient care 
management is a crucial determinant of outcomes. 
This involves decisions about which immunosuppressive 
medications to use , in what combinations, and for how
a time. It 
lon  also involves careful observation for
early signs of possible graft failure. 
Such oversi ht is especially critical during the first 
few months after the transplaasntts, .b uItt  is important for
as long as the transpl ant 1  is generally 
agreed that foreign nationals, who presumably return 
to their countries soon after the transplant, have less
access to ski lied medical oversight than would U. s.
residents. 
This means that their risk of complica
greater. It 
tions and/or graft failure are  also means 
that the use of a scarce societal resource may be
squanderec. 
Valuable outcome data is lost  In the same context

u. S. transplant 
surgeons lose the opportunity to 
collect outcome data and to gain critical feedback on 
time. 
the efficacy of particular interventions over 
varying extents, foreign nationals, then, represent a
lost data base. 
In a dynamic field such as
transplantation 
, where careful analysis of patient 
outcome data is intricately linked with continued
improvement , the loss of such a data base, even for 
only 5 to 10 percent of the universe , is a serious 
matter.  EXPORTING CADAVER KIDNEYS TO OTHER COUNTRIES

Some foreign nationals are able to obtain a kidney from a 
u. S. without 
cadaver donor in the  even having to travel to
this country. 
In these instances, U. S. transplant centers, 
independent organ procurement agencies (IOPAs), or the 
)--the
South-Eastern Organ Procurement Foundation (SEOPF 
nation ' s largest organ sharing program, send the kidneys
there. In 
other countries for transplantation  recent years, 
these exports appear to be primarily to England and Japan. 
Over the years, SEOPF has been the greatest single exporter

of kidneys , as it would regularly send overseas kidneys that

member institutions. But 
could not be placed among  its 
significant nu bers have also been exported by individual
transpla 
t ce ters and IO?  , which, like SEOPF, have
developed w=rking re:  ips with foreign surgeons 
interested in U. s. cadaver kidneys. 
Typically, the exported kidneys have been older ones. They 
have been removed from brain-dead donors for 40 or more 
hours and still have not been matched with an appropriate
recipient. 
u. S.  u. S. transpl ant 
surgeons have been 
disinclined to use kid eys onCE they reach this age, but

y foreign surgeons have been qui te eage  to receive and
transplant such kidneys. 
Accordingly, exportation has 
often been viewed as a way to see that a kidney that would
otherwise be discarded is 
, in fact, used. 
As with the phenomenon of foreign nationals coming to the

s. to receive a transplant, the practice of exporting 
kidneyss .b ecame increasingly visible and controversial as 
the U.  deffa  d for kidneys began to intensify. The media 
it. 
gave increasing attention to the issue and were instrumental 
in heightening public awareness of  They raised 
difficul t questions concerning why, in a time of
insufficient 
supply, kidneys were being sent overseas 
especially in view of reports that the outcomes being 
achieved with these older, exported kidneySs w. ere comparable 
to those of kidneys transplanted in the U.  They also 
raised hard questions concerning (1) which individuals were 
receiving transplants with the exported kidneys, (2) the 
extent to which u. S. procurement costs were being 
reimbursed, and (3) the comparatively high kidney wastage 
rates in the u. 
In recent years , the annual cost reports prepared by

.transplant centers , IOPAs a d SEOPF have included a count on

countries. Al 
kidneys sent to other  though these figures are  incomplete and include so e double counting, and in some

cases, may even be inaccurate, they provide a general

indication of the incidence of kidney exportation.

The peak level of activity appears to have been around
1983. 
At that time , when the U. S. rate of discarded kidneys
tended to be more than 20 percent 
, it appeared that at least 
350 and perhaps as many as 400 or more cadaver kidneys were 
being sent out of the country. 
In subsequent years, the number has almost certainly 
decreased. On the basis of our discussions and review of 
the cost report data, we estimate that 300-350 kidneys were 
1985. 
exported in 198  and 200-250 in  During this period, 
the annual number of exported kidneys reported by IOPAs
declinED fro  229 to 111 , by SEOPF - from 89 to 63. 
Why the decline? The increased u. s. demand and the 
blici ty  factors. 
heightened p  were certainly contributing 
, teo, were t e improvej outcomes associated with the use 
of cyclosporine and the greater readiness of some U. 
surgeons to transplant older kidneys. These factors have 
also contributed to a significant reduction in U. S. kidney 
wastage rates , to a leVEl thct now seems about 10-12
percent. 
IMPLICATIO?\S 
The 200-250 cadaver kidneys that we estimate were exported 
in 1985 account for 3. 4 - 4. 3 percent of all cadaver 
transplants that occurred in the U. s. that year. If these 
kidneys were net exported , some , given their advanced age 
wasted. 
would certainly have been  But with effective 
systems for pooling and sharing cadaver kidneys, it is quite 
feasible to assume that the great majority of these kidneys
ld be used for transpl antatio 
in the U. 
Thus  hile the exporting of U. S. cadaver kidneys does 
provide a valuable opportunity to some foreign nationals and 
does foster the international , humanistic ideal referenced
earlier 
, it generates some of the same kind of effects that 
were also explained. Four such effects are of particular
note. 
For U. S. residents the number of cadaver kidneys 
, the "opportunity
available is reduced  In this case
loss 
" is probably somewhat less than applies to 
cadaver kid eys transplanted into foreign natio als in

the U. S. , s nce the overall incidence seems to be
 less. 
somewhat  But nonetheless there is a loss that 
would appear to be difficult to justify in an

environment where there is a shortage of cadaver

kidneys. 
This is exactly the line of thinking expressed by a

Bri tish transplant surgeon who has often transplanted

its 
u. S. 
cadaver kidneys into private-pay patients. In 
The 
November 1985 series on kidney transplantation, 

Pi ttsburgh Press quoted him as follows: 
I feel very sorry for the patients who are

States. It 
wai ting in the United  seems 
absolutely crazy that a country the size of

the States , with whatever length of waiting

saty y.o uI th a  , co :d ever offer any kidneys

does  ' t make sense. If these 
kidneys are so bad , why don t your surgeons 
just give the  away rather than sell them to
us? Isn 
t that a bit like selling a car 
wi thout an engir.e?" 
2 .  ational oroan sharino is discouraged . Here, again 
gn nationals to receive u. 
the eagerness of fore 
cadaver kidneys can seSrv.e  as a disincentive to organ 
sharing wi thin the U.  When a transplant center 
cannot readily find an appropriate recipient for a
cadaver kidne  can merely package it in ice and
send it of  , i fore ign institution or surgeon.
f to a 
contrast 
, the alternative of striving to find an 
appro  riate p: ace  er.t in t  e U. S. can be more complex 
ing. 
and time-consu 
Medicare costs are increased  This cost effect is
twofold. First 
, for each transplant opportunity lost 
edicare recipient on a transplant waiting list 
to a 

the progra  in 1925 was deprived of an estimated cost 
savings of $6: 000 over 5 years. Thus, if 200 of the 
cadaver kidneys sent overseas in 1985 had instead been 
transplanted into Medicare recipients, the' program 
could have saved about S12 million over the next 5 
years. 
Secondly, it is important to recognize that in cases 
where kidneys are exported, HCFA' s policy has been to 
reimburse all eligible procurement costs, excluding 
transportation overseas , if such costs are not paid for 
by the foreign receiving center. It appears that in 
ori ty of 
the great maj  the cases , those costs have not 
center. I 
been paid for ty the foreign  f we were to  assume that 150 of the kidneys exported in 1985 were

not paid for by the foreign center and that the

average procurement cost was about $9 000 per kidney

(including kidneys procured by hospitals and by IOPAs)

then the loss to Medicare for that year would be $1.

million. 
Organ donation is jeopardized  The flow of U. 
cadaver kidneys to foreign nationals poses a subtle 
but continuing danger to the foundation of trust and 
donation. 
goodwill that supports organ  This is no 
less so when foreign nationals receive kidneys in 
another country than when they come here to obtain 
them. Moreover, as incidents of this kind are 
publicized in particular com i ttees 
, or, indeed, across
the natic  , the effects can be long-lasting, injecting 
in ma y a sense of dc bt or even cynicism concerning 
the eq ity and reliability of America s system for
sharing organs. 
RECOMMENDATIONS 
view of the implications discussed in the previous pages 
we offer two categories of recommendations. 
One concerns 
the transplanting of foreign nationals in the 
U. S. The 
oncerns the exporting of  cadaver kidneys. 
other  U. S. 
HCFA should undertake efforts to help ensure that

cadaver kidnevs ore not cffered to foreiqn nationals

unless it has bee  determined that no suitable 
recipient  U. s.

car. be found 
Determining the extent to which foreign nationals should 
have access to kidneys donated in the 
societal  U. S.  is
, not a medical decision. Physicians we met 
wi th tended to agree with this position and to welcome 
matter. 
specific governmental direction on the  The 
recommendation offered above would provide such
direction. 
It is a practical , straightforward recommendation that could 
be carried out administratively. It is
, in essence, the
same recommendation that the Task Force has advocated with 
organs. 
respect to hearts and other non-renal 
Since both 
renal and non-renal organs are in short supply in the 
U. s. ,
we don t see why non-U. S. residents should be given greater 
access to kidneys than to other types of organs. 
Further 
, our recommendation is in line with the position of 
the National Kidney Foundation and of eight members of the 
Task Force who filed a strongly stated dissent to the  maj ori ty ' s recommendation that as many as 10 percent of the 
transplants at a center could be for foreign nationals. 
agree with the Task Force minority that "members of 
the giving community (both American citizens and aliens 
living in the United States) have a right to expect that 
ill be met and that patient 
their medical needs 

selection decisions will not be made to their detri
ment. " A policy based on the above recommendation would 
help protect this right. It would recognize the reality 
that, 
that there is a shortage of cadaver kidneys and 
through the development of effective systems for 
sharing, just about all cadaver kidneys that become 
residents. 
available can be used by U. s. 
Such a policy would be consistent with that established 
by many other countries, including the United Kingdom. 
, i 
the sa e tiDe  t w8 ld not be a renouncement of the
international 
, humanistic ideal addressed earlier. It would 
leave the door ope~ for foreign nationals to receive living
related kidney transpl 
ants in the U. S. when they have a 
consenting donor and to receive cadaver transplants when an
appropriate  found. 
U. S. recipient cannot be  Over time , if 
the U. S. shortage of cadaver kidneys were to be reduced, the 
opportuni ty for foreign nationals to receive such kidneys 
would be enhanced.

Further 
, professionals in the transplant field in the 
U. S. can and should co tinue to work with their col
leagues in other countries , sharing information and
technology. 
This kind of interaction, which can benefit
the u. 
s. as well as other countries, would not be
const-:ained. 
Finally from a cost perspective , if the proposed policy

were enacted in 1987 , the Medicare savings generated

during that calendar yecr above would be an estimated

622. 5 million over a 5-year period (see Appendix II. 
HCFA should undertaKe efforts to help ensure that 
kidneys are not eXDorted to other countries unless it
has been deter 
ined that no suitable U. S. recipient can 
be found. Further , when kidneys are sent to other 
countries, HCFA should prohibit Medicare reimbursement 
isi tion costs of 
for any of the aC  those kidneys 
tr.is 
The first part of  recommendation is in accord with 
a policy change being considered in HCFA. We support this
change  1 that in i tsel f 
, but fee  it is insufficient. 
When a kidney is exported out of the country, we feel it  is essential that the receiving center pay the full 
acquisi tion cost for that kidney--just as is already the 
case foSr .a  foreign national who receives a transplant in 
the U.  Under present policy, which precludes 
reimbursement only for the costs of overseas shipment,
Medicare is 
, in effect , subsidizing the cost of exported
kidneys. 
Enactment of the recommendation, as stated above, would

generate in 1987 an estimated Medicare cost savings of $15

million over a 5 year period (see Appendix II).

Thus , if both our recommendations were carried out, an
estimated 500 addi tional U. s. residents would be able to 
1987. 
receive a cadaver kidney transplant during  That 
represe  ts a  estiIT  tec 5-year Y.edicare cost savings 
lic 
of S37. 5 mi  In addition there would be considerable 
savings in the Social Security disability program, as many 
of those who would otherwise receive disability payments 
would be able to lead healthier, more independent lives. 
In accord with the study findings and recommendations, the 
Administrator of ths Heal th Care Financing Administration 
(HCF  ) agreed to do the following: 
require organ procurment agencies and certified

transplant centers to maintain a record of placement

efforts fcr each kidney they export or furnish to a

foreign national , which will document efforts to place

the kidney with domestic transplant patients;

amend its reimbursement rules to ensure that organ

procurement agencies and certified transplant centers

are reimbursed only for kidneys furnished to Medicare

beneficiaries; 
work with the Public Health Service to encourage the

American Society of Transplant Surgeons to reassess the

40 hour standard for viability of cadaver kidneys in

light of the success of other countries in transplan

ting kidneys that have cold ischaemic times in excess

of 50 hours; and
 review standards governing certification of independent 
OPAs and considering whether they should be 
strengthened in any way, including extending them to
hospi tal-based OPAs.  , '

APPENDIX I

BACKGROU  D A D METHODOLOGY

Over the past few years
, the subj ect of organ acquisition
'has become an 
increasingly important and controversial one. 
Newspaper reports, television news shows, radio talk shows,
Congressional hearings 
, and other sources have been raisng
. hard questions about the adequacy of current systems for 
obtaining and distributing cadaver organs and tissues that 
will be used for transplantation. 
Because of these questions and the Medicare program

significant stake in the condition of the country 
s organ

acquisi tion systems, the Office of Inspector General has

undertaken a broadly based study of these systems. Its
overriding purpose is to promote a better understanding of 
them in terms of their effectiveness
, efficiency and equity,
and to ideDtify policy directions that might be taken to 
prc 
ote these ends. 
The study, which was initiated in January 1986
, has involved

three maj or modes of inquiry:

Reviews of literature and data bases 
articles  including journal
, books , governmental reports and statistical
compilations of public and private organizations. 
Particular attention has been devoted to the review and 
analysis of 1984-85 cost reports submitted by HHS 
certifiec independent organ procurement agencies and by 
Medicare certified transplant 
centers, and to the
review of documents and reports generated by the Organ 
Transplantation Task Force established by the National
Organ Transplcn 
Act of 1984. 
Visi ts to 17 cities, focusing on reviews of the organ
acquisi tioD 
practices in those cities. These involved
discu 
ith transplant surgeons and coordinators
nephrosiolnsogists 
, immunologists, procurement agenc
directors 
, fiscal analysts , ESRD network directors and 
others associated with organ acquisition and

transplantation. 
The cities visited were: San 
Francisco; Los Angeles; Denver; Chicago; Minneapolis;
Memphis; Nashville; Houston, Dallas; San Antonio;
Miami , FL; Richmond and Charlottesville
, VA;
Philadelphia; New York; Boston; and Washington
, D. 
Telephone discussions and selected visits with various

indi viduals 
knowledgeable about organ acquisition 
issues. 
practices and  These included representatives  of organizations , such as the South-Eastern Organ

Procurement Foundation
, and the American Council on

Transplantation; many of the members of the task force;

academics; and various officials in the Department of

Heal th and Human Services, most especially in the

Public Health Service and the Health Care Financing

inistratio:l; and others.

This report is the first of a series of reports that will

present the findings and recommendations of the study.

Forthcoming reports will 
address: (1) the extent to which

dialysis patients are being informed of transplantation as

an optional treatment; (2) 
the efficiency and economy of

kidney acquisition systems; (3) the dynamics of organ supply

and demand; and (4) the effectiveness of organ procurement

and distribution syste  , with particular attention to the

extent and nature of orga  sharing, both wi 
thin regions and
across the country. 
In each of these reports primary attention will be given to 
kidney acquisition. 
This is because there has been much
more experience and acti vi ty 
organs.  concerning renal than non-renal
Congress has extended Medicare coverage on a near 
universal basis to those req 
iring dialysis and

transplantation since 1972. 
During that time more than
50, 000 kidney transpl ants have 
been performed in the U. 
s. ,
the majority of which have involved the use of cadaver

kidneys. 
In the years ahea 
, howeve  , transplantation of non-renal

organs 
, especially hearts and livers
, will become especiall
prominent given the continued advances in technology and the 
fact that Medicare no  cove  s liver transplants for Medicare
eligible children with biliary atresia and will be covering

heart transplants for  criteerdiiaca.r e eligible individuals meeting

specified medical 
This prospect for accelerated
growth is suggested by the fact that the number of both

heart and liver transplants doubled between 1984 and 1985

from 346 to 719 in the case of hearts and from 308 to 602 
wi th respect to livers. In that period, the number of
kidney transplants performed in the U. S. rose from 6, 968 to
965. 
Thus, the problems encountered and lessons learned

concerning kidney acquisition have broader relevance to

organ acquisition generally. 
There are some distinguishing

characteristics between non-
renal and renal acquisition (not

the least of which is that non-renal organs must be made
 available for transplantation much more quickly). But

there are also important commonalities, among which is the

fact that the same organizations typically handle renal and

on-renal acquisition. Accordingly, the findings and
recommendations of .
this study, although focused on kidneys, 
have significance for organ acquisition in general.  " .  ~~~" ( 

APPENDIX II

METHODOLOGY FOR MEDICARE COST

SAVI!\GS ESTIMATES 
The methodology involves two maj  first
or components. The 
concerns the proj 
ected average 5-year Medicare cost for each 
ecicare beneficiary. The second concerns
transpl ant of a 

the proj ected average 5-year Medicare cost for each Medicare
beneficiary on dialysis. The Medicare savings is the 
difference between the two components. Further, we 
distinguished between savings estimates for 1985 from those 
1987. 
projected for  This is because the rapidly changing 
developments in the field of transplantation call for some

different assumptions for those two periods.

First of all 
th re  ct to the methodology for projecting
wi
average costs associ atec wi th transplantation over a 5-year
period 
, we drew on t e work of Jerome Aroesty and Richard 
Rettig, authors of a 1984 Rand Corporation report, based on 
research funded in part by the National Institutes of 
Heal th The Cost Effects of Improved Kidney
Transp, laand nenttiatletdi o 
In that report, the authors make different 
cost projections (all based on 1979 dollars) based on 
differing assumptions about Government policy and l-year
rates. 
kipney graft survival 
For 1985 , we used the authors first policy scenario, which 
follo\.;.:ns: 
assumes the  I) Current government policy
prevails 
, which limits ESRD benefits to 3 years for
successful tra 
spl a  t recipients and restricts coverage of 
immunosuppresive drugs tc inpatient treatment; and (2)
treatment costs remain unchanged for all three levels of 
outcome  In addi tion, we used the medium level of outcome, 
which is a 1 year graft survival rate of 74 percent. 
se assumptions an9 their analysis of the 
On the basis  of 
cost components of trans;:antation over time, Aroesty and
Rettig proj 
ect average 5-year costs of S58, 000. 
For 1987 , we used the authors ' second policy scenario , which
assumes that there will be no change in Governent policy
concerning coverage but that "new transplantation costs
decline 25 percent fro 
baseline costs, a magnitude 
consistent with results from trials reported by Pittsburgh 
and Minnesota  The continued advances in the types of 
medication available and in the use of irnumsuppressive
dru  s generally are leading in many transplant centers to  significant reductions in the length of inpatient hospital

stays for transplantation and in the incidence of post

transplant hospitalization. 
. In addition, because of continued improvements in 1 year

. graft survival rates , we used an outcome level halfway

. between the medium outcome level (74 percent) and the high

level (89 percent).

On the basis of these assumptions, Aroesty and Rettig r s 
methodology leads to proj  year transplant

ected average 5-
costs of $45, 000.

Secondly, with respect to the methodology for projecting the 
costs of dialysis, we draw on HCFA cost data and on analyses 
of th s data by Dr. Henry Krakauer, a HCFA official who, 
over the years , has studied kidney transplant outcomes and
costs in depth. 
His reviews indicate that 1 year 
maintenance costs for dialysis patients range between 
$25  500 to $27 900 , depending on the age of the patient. 
Recognizing that some of these are costs for Medicare 
covered services that would apply for eligible Medicare
beneficiaries 
, even if they were no longer covered under the 
ESRD program, we conservatively estimate the annual cost of 
dialysis to be $2  , 000. 
Thus , fer 1985 , we estimate that each transplant of a 
Medicare beneficiary will generate a 5-year cost savings of
000. 
$62  This represents $120, 000 for the 5-year cost of
dialysis ($2  , 000 x 5) minus the 5-year projected 
transplant cost of $58 , DOC. 
For 1987 , we esti ate that each transplant of a Medicare 
beneficiary will generate a 5-year cost savings of $75, 000. 
20, 000 for 
This represer.ts S  the 5-year cost of dialysis
minus the 5-year projected transplant cost of $45, 000.