DaVita responds to proposed Medicare cuts by threatening patients

As I wrote last week, the US Centers for Medicare & Medicaid Services (CMS) recently published a proposed rule (.pdf; 1.1MB) that would reduce the composite rate in the Dialysis Bundle by 9.4 percent, reducing the composite base rate from US$240.36 per patient per treatment to US$216.95 beginning on 1 January 2014.

I don’t know enough to opine on the efficacy of this proposed reduction, so I haven’t. I’ve focused more closely on the absence of a previous CMS proposal to restore the hemoglobin “floor” to the suite of metrics it uses to quantify dialysis treatment and outcome quality.

But I’m closer today to forming an opinion about the proposed reduction, after reading (and re-reading) Allen R. Nissenson’s screed demanding the cuts be stopped. Nissenson is DaVita’s chief medical officer and DaVita is one of the two corporate giant providers of dialysis services in the US.

I read much of Nissenson’s comments as not-so-veiled threats to patients. In a sort of National Lampoonish “buy-this-magazine-or-we’ll-kill-this-dog” sort of way: “… now these proposed cuts may threaten access to care for one of America’s most medically fragile patient populations; … this latest round of reductions could be devastating to patients; … may force center closures…;” and a recitation of the CMS unintended consequences, closing with a citation of Hubert Humphrey’s moral imperative:

“The moral test of government is how it treats those who are in the dawn of life, the children; those who are in the twilight of life, the aged; and those in the shadows of life, the sick, the needy and the handicapped.”

(From Humphrey’s remarks at the dedication of the Hubert H. Humphrey Library Building on 1 November 1977, published in the Congressional Record, 4 November 1977, vol 123, p. 37287.)

Nissenson’s Kantian moral imperative citation was especially grating given DaVita Chief Executive Kent Thiery’s 2009 statements comparing providing dialysis services to running a chain of taco stands and insisting “it’s not about the patients, it’s about the teammates.”

Even more disturbing is Nissenson’s disingenuous attempt to reframe the issue as a governmental threat to patients. Parse his opening sentence very carefully: “Centers for Medicare & Medicaid Services (CMS) recently took another step in a series of funding cuts for some of the most vulnerable patients [emphasis added] in the US healthcare system.”

But that’s not what the CMS proposed rule would do at all. What the CMS proposed rule would do is simply reduce the price it pays dialysis providers for a single dialysis treatment from US$240.36 to US$216.95. Not one Medicare recipient’s benefit is being reduced by one cent. Pretty fair exchange for the years DaVita and other corporate dialysis providers are alleged to have used the expensive erythropoiesis-stimulation agents (ESAs), like Amgen’s Epogen, as a major profit center. Getting off damn cheap, I’d say.

It’s Nissenson who’s threatening patients.

Nissenson also conveniently ignores that dialysis patient survival rates and quality of life are significantly worse in the US than in other parts of the industrialized world, have improved in the US only because of implementation of CMS’s Quality Incentive Program (QIP) mentioned above, and that while mortality rates have stagnated over the past year, the demand for intravenous iron and blood transfusions have risen quite dramatically.

Perhaps realizing the thin ice he’s on with regard to his disingenuous reframing as a governmental threat, Nissenson quickly pivots to a just as disingenuous reframing as “punishment” for the corporate dialysis providers: “…this rule would punish providers rather than reward their successes in helping patients live longer and live better.”

Nissenson cites “key members of Congress and patient advocates” as urging a “holistic” look at reimbursement and presumably he supports such an undertaking. He urges CMS “to consider the actual costs to operate an ESRD facility and use those costs in the calculation of reimbursement.”

In that small sliver — that very narrow gap — we have common ground. Here’s a modest proposal:

DaVita will solely and adequately fund competent independent research through the end of CY 2013 and through CY 2014 to determine the “actual costs to operate an ESRD facility.” The determination will be fully, completely, transparently, and publicly documented as to true costs, absent any externalities. I expect that determination to be remarkably close to US$216.95 US$225 (US$216.95 plus your profit margin) per patient per treatment.

Your failure to do so will be seen as capitulation that this is all just greed-based political dog-and-pony show hand waving. (Was that a threat?) Just think, you could come out of this just swell: You could spin it as a double-bottom-line play; maybe even propose converting DaVita into a B-Corporation.

In the meantime, here are four other modest proposals regarding how DaVita can weather the most recent CMS proposed rule, should it come to pass:

  1. Take the CMS proposed 9.4 percent cut for dialysis services out of the salaries of your director-level and above employees.
  2. Take the CMS proposed 9.4 percent cut for dialysis out of your net profit. Says here DaVita’s 2012 posted attributable adjusted net income was a tidy US$612.4 million.
  3. Take Warren Buffet’s money and run; maybe he can do better (without whining).
  4. Quit threatening your patients.
Disclosure: I’ve been a DaVita in-center hemodialysis patient since February 2000. Prior to 1 June 2013, I carried private health insurance. On 1 June 2013, I transitioned to Medicare and continue to carry a private health insurance supplement and prescription drug coverage.
Update: Wednesday, 17 July 2013 12:43PM CDT: Yesterday, shortly after publishing this article, I submitted a shorter version of it as a comment to Nissenson’s screed. Within the hour, DaVita deleted the comment on the grounds of “inappropriate language which is against our commenting policy.”

Typical corporate bullshit (was that inappropriate language? Not here) — rather than engage the issues, dissemble, deflect, subvert, and reframe.

Update: Saturday, 27 July 2013 7:19PM CDT: Roll Call has published a commentary by Ron Kuerbitz on Medicare’s proposal to reduce its reimbursement rate for dialysis services. While Kuerbitz’s argument is significantly more sophisticated than that of his peers, his goal is the same: To turn back the proposed reduced reimbursement rate. “Indeed, if the proposal is finalized, Medicare would fail to cover the basic cost of dialysis,” writes Kuerbitz, without quantifying the true cost of dialysis treatment.

And the threat to dialysis patients — albeit more nuanced and veiled — is still there in Kuerbitz’s piece: “For the first time since Shep Glazer testified before Congress while receiving dialysis treatment, the commitment made to Americans with kidney failure is in doubt.”

Kuerbitz identifies himself as the chair of Kidney Care Partners, “a coalition working to improve quality of care for individuals with chronic kidney disease and end stage renal disease.” Except the list of Kidney Care Partners’ partners is overwhelmingly populated with corporate dialysis providers and pharmaceutical companies. The sole exception seems to be the most excellent Northwest Kidney Centers, a community non-profit dialysis provider in Seattle.

Northwest Kidney Centers also opposes Medicare’s proposed rule, but much more reasonably. No threats; no attempts to reframe or dissemble.

Kuerbitz conveniently fails to identify his day job and conflict of interest. He’s chief executive of Fresenius Medical Care North America, the other largest corporate dialysis provider. Its parent, Fresenius Medical Care, saw 2012 net income of more than US$1.1 billion.

Again, I don’t know enough of the facts to either support or oppose Medicare’s proposed reduction in its reimbursement rate to dialysis providers. What I do know is that without regular dialysis, I will die. I also know that survival rates and general outcomes for dialysis patients in the US are not as good as those in other developed countries. Finally, I know that DaVita, Fresenius, and all the other corporate players in the dialysis services and pharmaceuticals game profit handsomely from the misfortune of others.

For all these reasons, my proposal to fund research to determine the actual, true costs of providing dialysis applies to Kuerbitz/Fresenius as well. He and his company can go in halfsies with Nissenson/DaVita. Again, my money says Medicare’s estimate comes pretty dang close. As for weathering Medicare’s proposed rule, if it’s implemented? Consider my proposals above: Take the CMS proposed 9.4 percent cut for dialysis services out of the salaries of your director-level and above employees or, in the alternative, out of your net profits.

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  1. DaVita chief executive threatens dialysis center closures | ARTS & FARCES internet - Tuesday, 20 August 2013

    […] medical officer for one of the two giant corporate providers of dialysis services in the US — threatening the company’s dialysis patients if the current proposed rule (.pdf; 1.1MB) published by Medicare & Medicaid Services (CMS) is […]