Brokering in the dead - East Valley Tribune: News

Brokering in the dead

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Posted: Sunday, July 11, 2004 1:31 pm | Updated: 6:16 pm, Thu Oct 6, 2011.

Laurie Sterbenz clutched her father’s hand as he was wheeled into the room where his life would be brought to an end. To the doctors, Donald Bateman of Tempe already was dead. His brain function had ceased hours before.

Four-part series

Forms don’t list commercial ties

Tissue banks fix damaged bodies

But his heart was kept beating to preserve his organs so they could bring life to others.

Earlier in the day, a nurse from Donor Network of Arizona met with Bateman’s widow, Sheila, and eight children in a room at St. Joseph’s Hospital and Medical Center in Phoenix. Organ by organ, the family voted to allow his heart, lungs, liver, kidneys and pancreas to be harvested for transplant.

They took comfort in knowing his death would save the lives of others. That comfort turned to shock the next day.

When the body arrived at the funeral home, the bones had been removed from his arms and legs. Also taken were swaths of fascia lata, the tough layer of tissue that encases muscles and organs.

Family members say they were never told those items would be harvested when they agreed to organ donation.

"We went from feeling good to horrified, violated," Sterbenz said. "When I think of my dad laying there, being hauled off somewhere and being deboned like a chicken . . . they just scavenged him and it’s not right. We gave them our trust and they violated it."

Bateman’s body had entered the supply chain for the booming market in human tissues, a lucrative trade that operates with little government regulation or legal accountability.

During a three-month investigation, the Tribune found many Arizona families who were stunned to learn the donated remains of a deceased love one were parceled out in ways they never expected — and that they had no recourse.

Tissue banks have nearly complete immunity from civil liability under Arizona law. No federal or state agency in Arizona regulates tissue banks beyond rules aimed at preventing disease transmission. No law or regulation specifies what families need to be told when they agree to donate parts from a loved one’s body.

"There is no oversight," said Rodolfo Thomas, executive director of the Arizona Board of Funeral Directors and Embalmers, the state agency that is supposed to have jurisdiction over the final disposition of the dead. "There is nobody regulating them, no mechanism to make a complaint. They need to revamp the whole darned system."

Donor Network officials said they could not comment on Bateman’s case because of medical confidentiality laws. The organization did release a written statement saying there are "inaccuracies" in the story told by Sterbenz.


Brokering in the dead is big business conducted by a mix of nonprofit and for-profit entities that are tightly interconnected.

Nonprofit tissue banks alone generate revenue of about $1 billion annually, according to financial disclosure statements from tissue organizations that have registered with the U.S. Food and Drug Administration. That figure includes some nonprofit banks that deal both in organs and tissues. It does not include nonprofit organizations that deal only in tissues that are not meant for human transplantation.

Neither government officials nor industry insiders know how much money is being made by forprofit companies that deal in human tissues.

The bone graft segment of the industry alone generates more than $1.5 billion annually, according to industry financial reports.

Other tissues on the market include ligaments and tendons, corneas, heart valves, skin and fascia. Even fingernails and nontransplantable organs such as brains are valuable commodities in the market for human body parts.

Parceled out properly, a human body was worth about $222,000 in the tissue market four years ago, according to a series of stories published in 2000 by the Orange County Register. The Register cited information it obtained from the tissue banks themselves in reaching that figure. However, none of the tissue banks contacted by the Tribune this year would disclose prices for individual tissues or products they supply.

Bodies have value in three ways.

First, they can save lives if the organs can be harvested for transplant. Because organs cannot be transplanted after blood flow has stopped, the only patients suitable to donate are those who are declared brain dead, but whose hearts still are beating. Those donors are rare.

Organs are transplanted directly from one patient to another, so there is no opportunity to tack on fees for processing, storage and distribution.

A second way is through body tissue, which can be transplanted if it is harvested within about 24 hours of a person’s death.

Finally, many tissue banks specialize in supplying whole bodies, or parts of bodies such as limbs, heads and torsos, to medical conferences or schools where doctors and students can practice surgical techniques.

Donated corpses also have been used as crash dummies, and to test the destructive force of explosives by the federal government. Even very old or diseased bodies have value in these ways.

It is against both state and federal law to buy or sell human organs and most tissues meant for transplant. But the law allows tissue banks to recover "reasonable costs" associated with procuring, processing, storing and distributing tissues. Because "reasonable" is not defined, the tissues can be sold for whatever the market will bear.


The Inspector General of the U.S. Department of Health and Human Services raised concerns about the growing commercialization of the tissue banking industry in a 2001 report.

The huge sums of money and the growing influence of for-profit companies in the tissue banking industry "may overshadow the underlying altruistic nature of tissue donation," the report concluded.

"In an industry that is premised on donation of parts of a loved one’s body, it should not be surprising that donor families could feel misled as they question why everyone is making money off of this altruistic gift except the donor and the donor’s family," the inspector general’s report states.

"Tissue banking and processing practices have gradually diverged from donor families’ expectations in recent years. Tissue banking has been infused with capital and entrepreneurial practices. Processed tissue often is marketed and sold like any other medical product. For some, these practices call into question the nonprofit basis of the tissue banking community."

The tissue trade is rapidly growing, according to financial reports from the industry’s key players in Arizona. For instance, revenue generated by the Musculoskeletal Transplant Foundation, or MTF, the nonprofit tissue bank that received Bateman’s bones, jumped from $179.7 million in 2001 to $214 million in 2002, the last year for which disclosure reports are available. MTF, based in Edison, N.J., is the largest tissue bank in the world.

Tissues recovered from the dead typically pass through a series of nonprofit organizations and corporate tissue banks for processing on their way to final implantation into a patient.

Donor Network, like other nonprofit tissue banks, has agreements to supply tissues to both for-profit and nonprofit entities. Another major tissue recovery organization with a regional office in Arizona, Regeneration Technologies Donor Services, is a fullyfunded nonprofit arm of the forprofit Regeneration Technologies Inc.

Only three states — California, Florida and New York — have licensing, disclosure and inspection requirements for tissue banks that go beyond federal requirements. Georgia and Maryland have licensing requirements, but do not require inspections before a license is issued, according to California legislative studies.

Tissue banks that deal strictly in bodies, or body parts, meant for medical education or research do not need to register with any federal or state agency in Arizona.

No one knows how many tissue banks there are in the United States. Officials at the U.S. Food and Drug Administration say they only keep tabs on banks that deal in tissues meant for human transplant. The FDA only began requiring those tissue banks to register in 2001.

Bob Rigney, chief executive officer of the American Association of Tissue Banks, the industry’s main accrediting organization, estimates there are between 150 and 200 traditional banks nationally that deal in tissues from the dead meant for human transplant. A study released last year by the California Senate Office of Research found there were 136 transplant tissue banks that deal only with deceased donors licensed in that state.

The profits that can be made from the dead have spawned a lucrative black market. The UCLA medical school was rocked by a scandal earlier this year when the head of the university’s willed bodies program was arrested on charges connected to running a side business selling bodies and body parts to research organizations.

Rigney defended his industry, and the money tissue banks earn every year.

Procuring, sterilizing and turning raw tissue into usable products is expensive, he said. But the end result is medical products and procedures that allow people to lead more normal lives.

"There are for-profit entities involved in all organ and tissue donation at some level simply because at some points in the process it becomes almost costprohibitive for some nonprofits to be involved," Rigney said.


The first step in the tissue supply chain is mandated by the federal government. When a person in a hospital dies or faces imminent death, federal rules require that the hospital notify the designated organ procurement organization for that state or region.

In Arizona, the designated procurement organization is Donor Network of Arizona.

The rules were put in place in 1998, and apply to any hospital that receives payments from Medicare. The intent was to increase the donation of lifesaving organs, which are chronically in short supply. There are more than 84,000 people in the United States awaiting an organ transplant, and more than 1,000 in Arizona, according to federal figures. Yet in 2003 only about 6,460 people who died nationally became organ donors.

Last year nearly 6,000 people died nationally while awaiting an organ transplant, including 78 in Arizona, federal statistics show.

There is no similar shortage of tissues, according to Catherine Paykin, transplant program director for the National Donor Family Council, a donor family advocate established by the National Kidney Foundation.

When Donor Network is notified of an imminent death, it assesses whether the patient is a suitable organ donor.

Like other organ procurement organizations, Donor Network also operates a tissue bank. It is the only agency authorized to recover organs for transplant in Arizona. The tissue market is more competitive.

Aside from Donor Network, the American Red Cross and Regeneration Technologies Donor Services are the main agencies that recover tissues for human transplantation in Arizona. The Red Cross and Regeneration Technologies have separate agreements with hospitals and medical examiners throughout the state, and are notified when a potential donor who is not suitable for organ recovery dies, according to representatives of those organizations.

What happened to Bateman’s bones illustrates how the supply chain works.

Bateman was 63 years old and seemed to be in excellent health when he collapsed after jogging eight miles in May 2003. He died of a brain aneurism.

Donor Network’s recovery team harvested Bateman’s organs and tissues on May 3, 2003, according to interviews with family members and documents they supplied.

The only organs that were suitable for transplant were his kidneys, according to letters from Donor Network to Sheila Bateman.

Bateman’s bones were sold by Donor Network to the Musculoskeletal Transplant Foundation, according to documents received by Sheila Bateman after she demanded his tissues be returned. From there, it’s not clear whether they were processed by MTF, or sold to Osteotech Inc., a for-profit bone processing mill whose shares are publicly traded on Wall Street.

Like officials at Donor Network, MTF representatives said they could not talk about specific cases due to medical privacy laws.


Osteotech fronted $10 million to create MTF in 1987 so that the non-profit foundation could provide a steady supply of human tissues to the for-profit bone processor, according to the California Senate report and the Orange County Register series. MTF is now a completely separate organization linked to Osteotech only by its contractual agreements, said Pam Rawlins, the organization’s director of donor development.

MTF specializes in cutting and shaping bones to meet specifications supplied by surgeons so that they can be transplanted, Rawlins said. It also processes ligaments, tendons and fascia for medical products or direct transplant, Rawlins said.

Rawlins said Osteotech is essentially a subcontractor to MTF. When MTF procures bones, a certain amount is sent to Osteotech, which is paid a fee for processing it into the company’s patented products, she said. The finished product is sent back to MTF for distribution to hospitals and surgeons.

The agreement allows MTF to provide medically necessary products that only Osteotech can supply, Rawlins said.

"If MTF did not have a need for the types of tissues that Osteotech can create for us, if the surgeons did not need it, then there would be no reason to create it," she said.

About 20 percent of the bone tissue that MTF receives is sent to Osteotech for processing, according to Rawlins and information on the organization’s Web site.

Michael Jeffries, vice president of Osteotech, refused to be interviewed for this story.

Donor Network has contracts to provide tissue it recovers to four other tissue banks. Three of them, including MTF, are nonprofit organizations that separately process bones, corneas and heart valves. The fourth organization, Cryolife Inc., is a for-profit corporation specializing in processing heart valves and veins for transplantation, said Sara Pace Jones, director of donor program development for Donor Network.

Donor Network also provides a small amount of tissue to the University of Arizona for medical research, Jones said.

The agreements are a means of ensuring tissues recovered by Donor Network are put to optimal use when they are ultimately transplanted into recipients, said Tim Brown, president and chief executive officer of Donor Network. Donor Network only recovers tissue and has no means of processing it into transplantable products, he said.

"We have no use for it unless we have a processor," Brown said.


Donor Network does not "sell" tissues, but rather charges fees to compensate for its recovery costs, Jones said. She said agreements Donor Network has with other tissue organizations prohibit her from disclosing what it charges as recovery fees for individual tissues. However, she did release a chart showing Donor Network, on average, receives about $12,000 from all the tissues it recovers from a single body if all available tissue is harvested. That includes about $5,135 for orthopedic tissue including bones, ligaments, tendons and fascia; $2,625 for heart valves and veins; $394 for skin; and $1,950 for each cornea.

It is rare that all of those tissues can be recovered from a single body, Jones said.

None of the other tissue banks contacted by the Tribune would disclose any information about their fees for procuring or processing tissue.

The inspector general’s report acknowledged commercialization of the tissue banking industry has produced benefits through new medical products and surgical techniques. But it also notes that the huge sums of money being made off tissue, particularly by for-profit corporations, could shake the public confidence that the industry relies on.

To protect public confidence, tissue banks need to fully disclose all of their financial arrangements with other entities, whether they be for-profit or nonprofit, the inspector general concluded. Families need to be made aware of those relationships when they are approached about donation, according to the report.


For Bateman’s family, the tissue supply chain was something they learned of only after his bones and fascia had been harvested, according to his widow, Sheila, and several of his children.

Sheila Bateman told the Tribune there was no discussion of donating her husband’s bones or other tissues prior to her signing the authorization for organ harvesting. She said she was never told his tissues would be sold by Donor Network to other organizations, or that they could be processed by a for-profit company.

Jones said that information is always disclosed to families. However, it is not stated anywhere on the consent form Sheila Bateman signed.

Sheila Bateman agreed to one interview with the Tribune, but later asked that she not be contacted further because of the tensions the yearlong battle with Donor Network had created within her family.

When Bateman’s family learned that his bones had been removed, they contacted Donor Network in an attempt to get them back, according to interviews with the family and documents they provided.

Brown, president of Donor Network, acknowledged Sheila Bateman’s concerns in a series of letters he sent to her beginning May 13 — 10 days after Bateman’s bones were harvested.

"I have been informed that your family feels you were misled with regard to the consent for tissue donation," Brown wrote, adding "we will not proceed with the donation if a family is uncomfortable."

In September 2003, Brown notified Sheila Bateman that Donor Network had taken steps to stop processing her husband’s bones.

"While everything done by Donor Network of Arizona has been in full compliance with our legal and ethical obligations, our strongest desire is that any family making the gift of life will find comfort and solace in having given it."

In November, Sheila Bateman received one more letter from Brown. In it, he noted she had revoked the donation of Donald Bateman’s tissues, and stated that Donor Network had asked that his bones be quarantined by the processor — MTF — until her final decision was clear.

"Regrettably, we have recently learned that the processor did not properly implement our request," Brown wrote. "Instead, the tissue was processed for distribution on August 15, 2003. Some of the tissue has been transplanted and is not available for return and cremation."

A small amount of cremated tissue eventually was returned to the family.

Sterbenz said the yearlong battle with Donor Network has caused family conflicts and made it difficult to find "closure" in her father’s death. The family never sought financial compensation from Donor Network. Sterbenz did contact her legislator, Rep. Warde Nichols, R-Chandler, who pushed through legislation this year requiring tissue banks to better disclose to families what they will be recovering from donors.

"It’s like most of my dad isn’t there," Sterbenz said. "Where is he? I have no idea where all of my dad is. We know where a few ounces are, but that’s it.

"I had to resort to thinking of my dad in terms of body parts and I shouldn’t have to think of him that way. No one should have to think of their parents in terms of body parts."

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