http://www.washingtonpost.com/wp-dyn/articles/A30439-2002Feb18.html

Market Solutions to Bad Genes and Organ Needs

By Richard Morin and Claudia Deane
Tuesday, February 19, 2002; Page A13

Here's a novel thought: Why not sell gene insurance to protect people financially when a genetic test reveals a nasty surprise that boosts their health insurance rates?

Here's another: Why not fine judges who parole criminals who then go out and commit more crimes?

And one more: Why not restrict organ transplants only to people who previously agreed to be organ donors? Didn't get around to signing an organ donor card? Aw, too bad -- No kidney for you.

These and other provocative ideas whose times have (perhaps) come are found in "Entrepreneurial Economics: Bright Ideas from the Dismal Science." The book is edited by economist Alexander Tabarrok, research director at the Independent Institute in Oakland, Calif., and will be published in March by the Oxford University Press.

The book showcases 13 big new policy ideas, all of which feature market-based, libertarian-leaning solutions.

Tabarrok wrote chapters on two of our favorite edgy ideas: gene insurance and a proposal to deal with the shortage of human organs for transplantation. He proposes allowing consumers to buy insurance before taking a test to determine if an individual has a genetic predisposition for diseases such as Alzheimer's, high blood pressure and breast cancer. If the test comes back positive, the policy would cover the cost of any related increase in health insurance rates.

He predicted that people who bought a policy would not avoid getting gene tests for fear their insurance rates would rise. In theory, these warnings might compel people to seek treatment earlier or take better care of themselves, thereby improving public health.

Tabarrok also predicted that good things would happen if organ transplants were restricted to people who previously had agreed to donate their own body parts. Such a requirement would encourage organ donations, thereby reducing the current shortage of such body parts as hearts, kidneys and lungs. (You wouldn't necessarily have to deny organs to those who weren't willing to give theirs up, he added. Free riders would merely go to the bottom of the waiting list.)

More problematic, he acknowledges, is a judicial reform proposal by Steven E. Landsburg, an economics professor at the University of Rochester. "The idea is that when a judge releases someone on parole and that person commits a crime, the judge should be penalized for making a bad choice" with a monetary fine, Tabarrok said.

Then why would a judge ever parole anyone? "His solution is to pay judges for letting people out. So they get a reward if they release people who then don't commit crimes, and are penalized if they do. What we want is for the judge to have really good incentives to make these decisions carefully."

-- Anonymous, February 28, 2002