Why organ transplants are so expensive in the US

• The average billed cost of a heart transplant is an estimated $1,382,400, according to consulting firm Milliman, and other organs aren't much cheaper.
• Doctors say transplant centers are strong revenue sources for hospitals; they charge high service fees, which factor into the overall cost, to help meet their bottom line.
• But transplants are also expensive because they're incredibly resource-intensive procedures, involving high-paid doctors, transportation, and pricey drugs.
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The following is a transcript of the video

Narrator: In 1954, doctors successfully transplanted the first human organ: a kidney taken from a patient's identical twin. Today, around 20,000 kidneys are transplanted every year, and based on estimates from one report, those transplants cost a total of more than $8 billion, and that's just for kidneys. Factor in the 15,000 other organs transplanted each year, and you've got yourself a booming business. Hospitals are in the business of saving lives. Keyword here being "business," and organ transplants, well, they're a pretty great way to add to your bottom line.

Katrina A. Bramstedt: Transplant centers are a good revenue center for hospitals. There are some departments in hospitals that don't make a lot of money. That's absolutely true. I'd be lying if I said, "Nah." It's true, and then there's other departments in hospitals including transplant that do tend to, yeah, be profitable for hospitals, absolutely.

Narrator: According to a report published by the consulting firm Milliman, the average billed cost for a heart transplant before insurance is an estimated $1.38 million, and other organs, well, they're not much cheaper. Around half of those costs come from what's called hospital transplant admission. That includes room and board in the hospital along with things like nursing care and medication during your stay. Now, for a heart transplant, which might require something like two weeks of inpatient care, hospital transplant admission adds up to an average of nearly $900,000 a transplant. Some doctors say these prices are so high in part because the hospital's trying to make money.

Dr. Preben Brandenhoff: Here's the dichotomy between hospital interests and our interests as doctors and patient advocates.

Narrator: That's Dr. Preben Brandenhoff. He's a cardiothoracic surgeon who specializes in heart and lung transplants.

Brandenhoff: The hospital, they just want to make money to run the hospital. If you want to be really stone-cold, they're not into taking care of patients.

Narrator: But Dr. Brandenhoff says there's a reason why transplants are so much more expensive than other procedures. Take heart bypass surgery for example. It can cost up to $130,000, but that's just a fraction of the cost of a heart transplant. To understand why, just consider what it takes to transplant an organ. If the organ donor is deceased, there's the expensive medication to keep the organs healthy, then there's the charted flights to get the organs where they need to go.

Brandenhoff: If it is one of these where I go to Hawaii and get the lungs because from the time I have the lungs out and ready to go, it'll be five hours going back to the mainland.

Narrator: And then there's all the trained personnel.

Bramstedt: So you may have 10 surgeons in an operating room working, so it's huge.

Narrator: And each of those surgeons is making a lot of money. According to Salary.com, the average base salary for a heart transplant surgeon is over $600,000 a year compared to, say, a trauma surgeon who makes under $400,000 a year. And finally, there's even more expensive medication to help the body accept the new organ.

Bramstedt: It can cost somebody a couple thousand dollars a month if they don't have insurance.

Narrator: So by the time it's all tallied up, a seven-figure transplant isn't all that surprising, even though the organ might come for free. And when you consider what you get for it, you know, life, it might even be a pretty good deal.