It was the second operation, nearly 15 hours long this time, in which a portion of a healthy liver from a live donor was transplanted into a dying baby. Six days later the donor, Robert Jones, a 20-year-old drywall finisher from Tennessee, felt well enough to hold a press conference, and his 16-month-old daughter was free of one of the classic signs of liver failure: the jaundice that had yellowed her skin since birth. Surgeons at the University of Chicago Medical Center, who performed the delicate double surgery December 8, were delighted with his progress but astounded by hers. Sarina Jones, who weighs less than 15 pounds, had been removed from a ventilator weeks ahead of schedule. Her liver function was basically normal, and doctors were planning to move her out of intensive care. "This is the best graft ever in the history of {this} transplant program," proclaimed Peter F. Whitington, chief of pediatric gastroenterology and a member of the transplant team. "She is doing better than anyone ever could have hoped." Just three weeks earlier, the same doctors had performed the same operation -- the nation's first liver transplant involving a live donor -- on 29-year-old Teresa Smith and her 21-month-old daughter Alyssa. Previously, transplant surgeons had used only livers obtained from cadavers. The operations on the Smiths, which took place November 27, did not go as smoothly. During the laborious and exacting 13 1/2-hour operation, surgeons accidentally nicked Teresa Smith's spleen, requiring its removal, and her bile duct, which had to be surgically rebuilt. Alyssa Smith underwent five hours of emergency surgery to stop postoperative bleeding. Chicago surgeons plan to perform 18 more of these operations in the next year. Despite the enormous anxieties surrounding the pioneering procedure, what was not lost on either the transplant team or on other surgeons, medical ethicists or the estimated 31,000 Americans who die every year of end-stage liver disease was the prospect that transplants involving living donors might provide a vital new source of organs. It is far too soon to tell whether the Chicago procedure could be adapted for the 700 adults who last week were on the federal government's liver transplant waiting list. Nor is it certain how useful the procedure might be for the 700 children who need new livers every year. Half of them die awaiting the death of another child whose parents agree to donate a liver. Like Alyssa Smith and Sarina Jones, most of these children suffer from biliary atresia, a birth defect that results in blockage of the bile ducts, eventual liver failure and death. Although the future of living donor liver transplants depends on how well the Smiths and Joneses do, the historic operation has already raised serious ethical questions: Should doctors subject healthy people to a high degree of risk in an experimental procedure that will benefit someone else? How truly informed is a consent given by parents who would willingly risk their lives to save their children? Who pays for such expensive, experimental surgery? Transplant Boom Despite a continuing shortage of donors, transplantation has been one of the most stunning medical advances of the 1980s, largely because of the development of cyclosporin, a potent drug that prevents the body from rejecting the transplanted organ. Statistics compiled by the federal Health Care Financing Administration show that the number of heart transplants performed annually increased nearly 16-fold between 1982 and 1988, from 103 to 1,646, while liver transplants jumped from 62 to 1,680 during the same period. At the same time, the pool of donors has not increased. Some experts say the use of seatbelts and infant car seats has reduced the number of fatal accidents in which victims could be potential donors; others say that hospitals remain reluctant to ask relatives of dead patients to donate their organs. One-year survival rates for all types of transplants range between 70 and 80 percent; federal statistics for five-year survival rates are sketchy but are believed to hover around 50 percent. Although the condition of patients following a transplant -- especially a liver transplant -- varies considerably, many people do well for several years. Among them is Jamie Fiske of Bridgewater, Mass. Fiske underwent a transplant in November 1982, shortly before her first birthday, after her father made a desperate and highly publicized plea for a new liver. She recently celebrated her eighth birthday and has had a relatively normal childhood. Another development has occurred recently in the field of transplantation. Now that single organ transplants are common, some surgeons are experimenting with multiple organ transplants in conjunction with a new anti-rejection drug, FK 506, developed by the Japanese. Two weeks ago, Pittsburgh surgeon Thomas E. Starzl led a team that spent 22 hours transplanting a heart, liver and kidney from cadavers into a 26-year-old woman. Liver transplants are still relatively rare, a reflection of the enormous skill involved in performing them, especially when the recipient is a child. That fact alone, some ethicists speculate, will probably limit how many of the nation's 249 transplant centers attempt to follow Chicago's lead. Because the organ, which is shaped roughly like a boxing glove, is composed of so many intricate veins and ducts, surgeons say that it is much harder to transplant than a heart. Liver transplantation is "the most complex technical procedure of all the organs that we transplant," said Ronald Busuttil, chief of liver transplantation at the University of California at Los Angeles Medical School. "And if one considers the complexity and difficulty {in splitting a liver} that is going to be used to be implanted in the recipient, that even adds more difficulty." The liver is the largest internal organ in the body and, like the heart, is essential for life. It is composed of several lobes and extracts waste from the blood, stores sugar, vitamins and minerals and produces bile, the digestive juice. It is only because the liver has an extraordinary capacity to regenerate -- unlike most other organs -- that living donors are possible. The livers transplanted into Alyssa Smith and Sarina Jones will grow along with them, while their parents' livers are expected to look almost normal within a year. "There aren't many organs you can take just a piece of," said surgeon James S. Wolf, chairman of the division of transplantation at Northwestern University School of Medicine. "Could this be done with older children, say with a 90-pound girl? It's hard to say. The limiting factor in dividing the liver is the size of the bile duct." In the Chicago procedure, surgical teams spent almost as much time cutting and preparing the parents' livers as they did implanting the healthy pieces into the bodies of their sick children. First they made a splayed, three-pronged foot-long incision running from the ribcage to the navel of each parent. Getting to the liver, which is nestled behind other organs, and clamping it off took nearly 2 1/2 hours. The most dramatic and anxious moments involved cutting and removing one third of the adults' livers. The severed piece was then bathed in solution, gingerly placed in a small metal basin and spirited to a second operating room. A trio of surgeons wearing amplifying glasses hunched over what was to become the new liver, meticulously checking grafts and arteries and the functioning of the organ that would be transplanted into the baby, replacing the diseased liver. Two years ago, Christoph Broelsch, the surgeon who led the Chicago team, pioneered the use of adult cadaver livers that were cut to fit children. Last year, he performed the first "split liver" transplant, using one adult cadaver liver to save two children. The difficulty of liver transplantation is magnified when it involves live donors, whose livers are softer and tougher to handle than a chilled organ obtained from a cadaver. One of the reasons Alyssa Smith required emergency surgery for postoperative bleeding is that a hematoma, a small pool of clotted blood, had formed under a layer of skin covering her mother's liver. Chicago surgeons speculate that the hematoma probably occurred when the team handled the organ. There were no such complications in the second transplant involving Robert and Sarina Jones. Ethical Questions The Chicago transplants have revived a longstanding debate about human experimentation. "There are several key issues," says Arthur Caplan, director of the Center for Biomedical Ethics at the University of Minnesota. "One is that the procedure really raises some serious questions about the validity of informed consent. I find it very difficult to credit consent when you're asking the parent to assume a risk to save the life of his or her child. I think most parents would do nearly anything, including killing themselves, to save their child's life." George Annas, professor of health law at the Boston University School of Medicine, agrees. "The second question is one of the magnitude of risk to which you can subject healthy people," said Annas. "Generally, doctors don't put healthy people at risk at all. This is clearly an issue with liver donation which is a lot more dangerous than donating a kidney," since people are born with two healthy kidneys but need only one to survive. "And the next question," Annas adds, "is that if it works and we let parents do it, why not uncles, cousins, brothers or, for that matter, strangers?" Given the advances in transplantation, the questions are not far-fetched. Until recently, bone marrow transplants -- used to treat leukemia and other potentially fatal blood disorders -- were performed only on members of the same family. Because the chance of an exact tissue match is only 30 percent, except in cases involving identical twins, the federal government established the National Marrow Donor Program in 1987, designed to match strangers as donor and recipient. Recently the family of 20-year-old Allison Atlas of Bethesda, who suffers from a rare form of leukemia, launched a highly publicized drive to find a donor that matches her unusual tissue type. Organ transplants pose considerably greater risk to the donor than giving bone marrow, which quickly regenerates. Although federal law forbids the sale of organs, a common practice in some countries, most ethicists doubt that permitting living strangers to donate pieces of their organs will become acceptable. "We don't permit non-relatives to donate a kidney," Annas says. "There's no particular reason for it, except that doctors think it's just too weird and refuse to do it." Ethical questions about using live donors are not unique to liver transplantation. Many of the same questions were raised in the early days of kidney transplants; the debate intensified after several donors died. Surgeons acknowledge that in some cases the coercive nature of family relationships can cause serious problems, something hospitals try to guard against. "This is not a purely rational decision," said Annas. "The early research with kidney transplants showed that the family members made the decision immediately; it's sort of a gut decision. But as a basic rule, it seems to me that parents should never designate that one kid donate an organ to the other," which has occurred. Mental health workers who evaluate transplant candidates and prospective donors try to screen out those with obvious psychological problems. But they acknowledge that the subtler, and sometimes more insidious, dynamics within families are harder to read. "There are problems with some people being afraid to say no because they'll be viewed as disloyal or uncaring," said James L. Levenson, a psychiatrist at the Medical College of Virginia in Richmond, a major transplant center. "Then there are people who say no and mean yes and people who say yes and mean no. And in some cases a relative wants to donate, but their spouse doesn't want them to." Although most parents say they would gladly donate parts or entire organs to save their children's lives, some recognize that the decision is not so simple. "I would hate to see parents feeling pressured to do this," said Susan Watson of Fairfax, whose 6-year-old daughter has had an operation to correct biliary atresia and someday may need a transplant. "Let's say it's a young couple and there are other young children. I can see parents saying no, that it's just too risky to lose two members of the same family at the same time. The other thing is that a lot of families are very marginal in terms of income. If there's a risk that the breadwinner might die or lose a lot of time from work or a job, that's got to be a major consideration." The Chicago team went to unusual lengths to grapple with the ethics of using live donors, a move applauded by ethicists and other surgeons. Last August, the team outlined its plan to perform a series of 20 transplants in the New England Journal of Medicine. Unlike traditional medical policy, which stipulates that transplants should be reserved for the sickest children who have no other hope of surviving, the team announced that it planned to attempt the procedure on those who are not critically ill but are expected to need a transplant within six months. The team also said that minors would be barred as donors, to minimize possible family coercion; in most cases, the donor would be a parent who would receive extensive psychiatric and physical evaluation and then be required to wait two weeks before deciding. In addition, the consent form explicitly states, "The operation your child will have . . . has never been performed." "By approaching parents early, we've really given them a real choice, which we think sort of minimizes the coerciveness," said John Lantos, a pediatrician and ethicist who is a member of the transplant team. "We say, 'In three to six months, it looks like your kid is going to die without a transplant, and if you wait, there's still a chance a donor's going to come along, so you can try this experimental procedure or opt for the standard therapy.' That's different than saying, 'Look, your kid has got only a week or a month to live, what do you want to do?' " he adds. "The Chicago procedure was telegraphed a long time ahead, and I don't think you could ask for anyone to try harder than they did" to consider the ethics of the procedure, says Jerold Mande, senior legislative aide to Sen. Albert Gore (D-Tenn.) and an expert in transplant policy. "Obviously if this works, there will be enormous pressure on other hospitals to start doing them." Some surgeons are reserving judgment until more live liver transplants are performed but say the procedure seems promising. "From a physiological and anatomic standpoint, it's very reasonable," said Northwestern's Wolf, who is vice chairman of the United Network on Organ Sharing. "I think it's certainly a worthy experiment, and the people who are doing it are very good." Soaring Costs While using portions of live livers from parents may help solve the problem of the organ shortage, it doesn't ameliorate one of the most pressing problems confronting medicine: spiraling costs that have sparked serious discussions about rationing care. Most major insurance companies now cover many of the costs of transplantation, according to a recent survey by the Health Insurance Industry Association. But the Chicago procedure, which officials say costs at least $150,000, is experimental and few insurance companies pay for experimental treatment. Humana Healthcare Plans, which insures Teresa Smith, a fourth-grade teacher from a San Antonio suburb, has agreed to cover most of her transplant. The situation for Robert Jones and his family is far different. The Joneses are among the 37 million Americans who lack health insurance. He and his supporters raised $160,000 from friends and neighbors in their native Tennessee to cover the cost of a transplant for Sarina, who had been on the waiting list for nearly a year. They must raise another $10,000 annually to cover related medical expenses, including the medications necessary to keep her alive. Chicago officials say that financing each of the live transplants will be handled on an individual basis. If the procedure is as successful as it initially appears and if it can be adapted for adults, the financial ramifications are significant. "If you look at the fact that at least 30,000 people die of liver failure annually in the U.S. and the fact that this operation costs about $150,000, well that saves a lot of lives," Lantos observes. "But it costs a lot of money." DONOR ORGANS: STILL IN SHORT SUPPLY The following chart depicts the number of transplants performed in 1988 and the number of people on the federal government's waiting list on one day, Dec. 11, 1989. Officials who compile the figures say that the one-day snapshot of the waiting list understates the actual number of people who need transplants. It reflects only those people who reach the waiting list by meeting the medical and financial criteria established by each of the nation's 249 transplant centers. Patients who died while awaiting a transplant, who need a re-transplant because of rejection problems or who are too sick to receive a transplant have been omitted.