January 7, 2001 - Here are two stories from India and Thailand that chronicle the heart-breaking decisions that families have to make when a family member has end-stage renal disease:

"Suffer the cash-strapped children" - article from Bangkok Post

"Not just renal, a public health failure too" - Finanical Times article from The Times of India

Before 1972, a similar situation existed in the United States. At that time, just a few dialysis centers existed. People with end-stage renal disease (ESRD) requiring dialysis either had to pay for the treatments themselves or had to petition to be accepted into a dialysis program. At that time, most dialysis programs were supported solely by donations, grants, and private subsidies. These dialysis programs had to set up so-called "death committees", made up of physicians and community members, to choose a few patients to receive dialysis treatments from the long lists of candidates. The unsuccessful petitioners nearly always died.

In 1972, Congress passed the Right to Life Bill. The federal government agreed to cover 80% of the costs of dialysis treatments for ESRD patients. With reimbursement now guaranteed, dialysis programs sprang up across the country. The government reimbursed the dialysis centers for their costs, which the centers essentially determined on their own.

By 1983, the costs of the ESRD program had far exceeded projections. As the government simply reimbursed for all reasonable costs incurred, there was no financial incentive for dialysis centers to operate efficiently. In order to get costs under control, the government moved to a composite rate system (one fixed fee for all supplies and services). Dialysis centers were then paid based on a $138 per treatment cost. If a dialysis center could deliver a treatment for less than $138, they made money. If the dialysis center spent more than $138 per treatment, they lost money and needed to change their operations and/or lower expenses.

The US government reimbursement rate for dialysis treatments has been virtually unchanged since 1983. While the cost of dialysis supplies has decreased since 1983, labor costs have vastly increased over the last seventeen years. Many hospitals, seeing their dialysis unit profit margins shrink with each successive year, sold their dialysis operations in the 1980's and 1990's to dialysis provider chains (Fresenius, Gambro, TRC, RCG, etc.) that could take advantage of the economies of scale. The Medicare Payment Advisory Commission (MedPAC), an independent body that advises Congress on Medicare issues such as dialysis reimbursement rates, has recommended no increases in the composite rate for 2002.

The biggest expense of an in-center hemodialysis treatment is nursing/technician labor. In the 1970's, patient-to-staff ratios of 2:1 were common. At that time, registered nurses made up the majority of the patient-care staff. Today, the stagnant reimbursement rate has resulted in patient-to-staff ratios of 3:1, 4:1, and even 5:1 in some facilities.

Dialysis technicians, rather than RN's, now make up the majority of the staff. Dialysis technicians earn between $15,000 and $35,000 per year, depending on geographic location, experience, market demand, and level of responsibility. The vast majority of dialysis technicians only receive on-the-job training. No states require certification or licensing as a condition of initial employment.

The government has now shifted a significant portion of the payments for dialysis treatments to private insurers, but Medicare remains the biggest payer for dialysis treatments. Despite the stagnant reimbursement rates, the renal community has been able to improve the quality of care in dialysis facilities as measured by outcomes data. In the Centers for Medicare and Medicaid Services� (CMS) 2001 Annual Report on ESRD Clinical Performance Measures, data shows once again improvements in all key quality of care indicators tracked by CMS.



[This message has been edited by Gary Peterson (edited 01-07-2002).]