This week, two congressional committees—the House Ways and Means committee and the House Energy and Commerce committee—are scheduled to vote on a new Medicare bill. If passed, the bill would move to the full House of Representatives for a vote. The draft bill includes a provision that would increase the level of payment to dialysis centers. The payment increase would be funded by lowering the payments for home dialysis by 20 percent. Currently more than 340,000 people are on dialysis or have a kidney transplant in the United States and total treatment costs are US$17 billion each year.
The proposed payment level increase is problematic for hemodialysis patients for a variety of reasons. Most of us currently dialyze in dialysis centers—only about ten percent of U.S. end-stage renal disease (ESRD) patients dialyze at home—but the home dialysis technology improvements are promising. Most disturbing is that lower home dialysis payments will likely create a disincentive for dialysis centers to continue their home dialysis programs. Such a situation would, in turn, create a disincentive to the continued development of innovative home dialysis technologies.
While I have no plans for home dialysis, it’s important to me as a treatment option, especially since I’ve seen the level of care I receive at the dialysis center steadily decrease over the past two years. Dialysis technicians that six months ago seemed grossly incompetent—and obviously so—now bring relief when I find they’re on duty. It’s not because they’re suddenly competent, it’s just that some of the newer technicians are even more incompetent.
Data from the U.S. Renal Data System indicates that home dialysis patients live longer and have a better quality of life.
From a purely economic equation, home dialysis options will likely be critically needed in the near future. The number of dialysis patients is growing while the number of qualified nurses is stagnating.
The question is simple: Do the corporations that own the dialysis centers (to the best of my knowledge, almost all dialysis centers in the United States are owned or operated by corporations) need an additional 20 percent subsidy from the government, and if so should this subsidy come at the expense of home dialysis patients? The answer isn’t as simple as yes or no.
Because dialysis is an expensive procedure, most dialysis patients in the United States are on Medicare regardless of their age. Medicare pays for 80 percent of the cost of dialysis treatments. In my case, I’m not on Medicare and my dialysis treatments are paid for by private insurance. And therein lies a glaring disparity of the system.
Medicare currently pays US$128 per dialysis run for each patient. Each dialysis provider negotiates its rate with each individual insurance company. In my case—based on the Explanation of Health Care Benefits I receive from my insurance company on an almost daily basis—my insurance company pays the dialysis provider I use US$1,177.44 per dialysis run, or more than nine times the Medicare rate. It’s safe to say that I’m a cash cow for the corporation that owns my dialysis center.
It’s important to realize that these figures do not include doctor or lab fees (US$315 and US$250 per month respectively on uneventful months). Those fees grow exponentially if I have to be hospitalized or actually need the doctor to do something besides sign off on my chart. It’s interesting to note that in my case the same corporation that owns the dialysis center I use also owns the lab.
On 10 May, the corporation that owns the dialysis center I use announced its first quarter 2002 financial results. DaVita owns 487 dialysis centers in 32 states and D.C. and provides acute dialysis services at 280 hospitals. The most interesting metric in the company’s financials is the claim that its revenue per dialysis treatment was US$290.45. This is more than double the current Medicare payment rate, so it’s safe to assume that private insurance patients like me—or rather, the private insurance companies—are making up the difference. The bottom line is that the company is profitable to the tune of almost US$36 million in the first quarter of this year.
Two days before announcing its quarterly financial results, DaVita announced that it had received a subpoena from the Philadelphia office of the U.S. Department of Health and Human Services, Office of the Inspector General. The subpoena calls for documents related to the company’s financial relationships with physicians and pharmaceutical companies. In a conference call that was broadcast live over the Internet, company officials acknowledged that the subpoena also covered information related to patient care, corporate compliance, and billing practices.
It’s likely that DaVita would take the proposed 20% increase in Medicare payments and apply it directly to its bottom line, raising its quarterly profits to more than US$40 million. Those increased profits would just as likely be distributed to the company’s shareholders who did absolutely nothing to increase the company’s value. Meanwhile, the dialysis technicians that care for me will still be getting paid about US$10 per hour.
For all these reasons, the level of Medicare payments to corporate dialysis providers should not be increased, and certainly not at the expense of funding for home dialysis. The long-term solution is simple: I just want a health care plan as good as that received by my elected officials.
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