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Transplant centers report major advances in preventing the rejection of transplanted organs. Should these advances be realizable in wider practice, then organ transplantation's role will be expanded in the treatment of patients with end-stage disease of the kidney, heart, lung, liver, pancreas, and bone marrow. This expansion poses a number of questions, some of them significant in policy terms. In 1982, Medicare expended $1.8 billion for ESRD health care costs, including 5,000 kidney transplants and dialysis treatment for 60,000 beneficiaries. Many observers have speculated on the extent to which improved transplant outcomes and an increased rate of kidney transplantation might yield cost savings to Medicare while also improving the quality of life for many patients. This report uses an analytic model, supported by current and historic data, to quantify these speculations realistically and to bound the potential cost effects to the federal government of improved transplantation.

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