Ben Hippen on the economics of transplantation and dialysis

Dr Hippen replies to an earlier article suggesting that incremental changes in current transplant practice could remove the need to radically increase the supply of kidneys, e.g. through financial incentives...

Debating Organ Procurement Policy Without Illusions

Benjamin Hippen, MD American Journal of Kidney Diseases

"For poor patients, the primary payor for dialysis is Medicare, Medicaid, or some hybrid, unless they are ineligible for these programs. The profit margins of dialysis facilities with an average payor mix of Medicare, Medicaid, and commercial insurance is 3% to 4%.12 Crucially, a facility composed entirely of patients with Medicare and/or Medicaid as the primary payor is financially unsustainable because payments to facilities on a per-treatment basis are, depending on local labor and other overhead costs to the facility, frequently less than the cost to the facility to provide the treatment. Although a dialysis facility requires a minimum number of patients to cover labor and operational overhead costs, the total net margin of a typical facility is achieved through cross-subsidization from collections from commercially insured patients."
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"A staple of opponents of financial incentives is that incentive proposals would not even bear consideration if transplantation professionals would just stop wasting perfectly good kidneys. Citing a 19% rate of organ discard in the United States, the authors argue that if only we biopsied more kidneys before turndown, made more use of organs with a Kidney Donor Profile Index > 85% (previously known as expanded criteria donors), and increased use rates of organ donation after circulatory death just like many European centers, we would be a long way toward solving the problem.

These arguments betray a lack of understanding of the extant regulatory burdens and financial constraints on US transplantation centers. In the United States, the expected risk-adjusted rate of death-uncensored transplant survival for a deceased donor kidney at 1 year is 96% (14; Fig 6.2), and 1-year expected patient survival is 98% to 99%. These outcomes represent the expectations of transplantation centers by CMS regulators, and failure to achieve these outcomes invites intense regulatory scrutiny under threat of involuntary closure.15 In the last several years, nearly 100 transplantation programs in the United States have gone through expensive stressful “mitigating factors” applications with CMS to avoid involuntary closure because of reported outcomes that were below risk-adjusted expected outcomes, although the data and veracity of the methodology used to calculate risk adjustment has been heavily criticized.16 With some frequency, scrutinized centers are required to enter into a Systems Improvement Agreement, essentially a contract with CMS to put oversight of the transplantation program into a multiyear third-party receivership, at extravagant expense to the transplantation center, until reported outcomes improve.

Regulatory scrutiny of programs that fall below expected outcomes is typically accompanied by denial of Center of Excellence status by CMS. Loss of this designation often causes commercial insurers to cancel insurance contracts and direct referrals to other programs. This is a profound incentive to embrace risk aversion.16 and 17 Refashioning insurance agreements and changing ingrained referral patterns is a slow process and can pose significant medium-term challenges to the financial stability of a transplantation program long after the quality issues have been resolved to a regulator’s satisfaction."

Conflicts of interest in caring for candidates for kidney transplants

Harvey Mysel has posted the following (reproduced in its entirety) here:

How Conflicts of Interest Negatively Impacts a Patients Chance to have a Kidney Transplant

Patients who need a kidney transplant expect their dialysis clinic and/or their transplant hospital to provide them with information on the best medical options available. CMS (Centers for Medicare and Medicaid Services) requires dialysis companies and transplant hospitals to provide this information. These companies may “technically” abide by these rules however, the information is often vague and not very useful.

The Conflict for Dialysis Companies
CMS requires dialysis companies to ask: “Has the patient been informed of kidney transplant options?” A Yes/No box needs to be checked. A dialysis company’s mission is to dialyze patients, not to educate them about kidney transplants. It’s a conflict of interest for the dialysis company. Once a patient receives a kidney transplant, they don’t need the services of the dialysis company. What company will educate their customer to an option that will result in losing their customer?

From the statistics you can see there is a problem in the dialysis community. There are over 400,000 people on dialysis but only 98,000 are on the kidney transplant waiting list. By some estimates, 10% of all dialysis patients die every year. Many dialysis patients were good candidates for a kidney transplant when they first started dialysis, but after years of treatments their health deteriorates and the majority is no longer healthy enough to recover from a kidney transplant.

The Conflict for Transplant Hospitals
CMS requires transplant hospitals to tell their patients they can register at more than one transplant hospital. The primary reason to register at another transplant hospital is to be on a shorter waiting list. Providing this information to their patients is a conflict of interest for the hospital. A hospital might tell their patients they could register somewhere else, without letting them know the benefit of doing so. There are regions in the U.S. where the wait for a deceased donor kidney is 5-­-10 years, while in another area, which might only be a 1.5 hour drive, the wait time is only 12 months.

There’s another conflict that can develop for the transplant hospital. Patients are given excellent advice and encouraged to find a living kidney donor. There are many benefits of a living donor kidney versus one from a deceased donor.

The biggest benefit is a kidney from a living donor lasts on average twice as long as one from a deceased donor. Statistics show about one-­-third of all potential donors who are evaluated are not compatible with their intended recipient. Potential donors could have an incompatible blood type or the recipient has certain antibodies, also referred to as being sensitized that will result in rejecting this person’s kidney. High levels of antibodies can develop as a result of a previous transplant, a blood transfusion or for some women giving birth.

Better anti-­-rejection drugs and Kidney Paired Donations (KPD) also called paired exchanges, chains or swaps allow these incompatible donors to help their intended recipient by donating to another recipient who also has an incompatible donor. KPDs have the potential of adding thousands of kidney transplants a year if a centralized national program is developed and all incompatible pairs are registered in the same pool. Unfortunately there isn’t one centralized program, but many different KPD options. To read more about KPDs go to: www.lkdn.org/LKDN_Paired_Exchanges.pdf

Since there are many KPD programs, the likelihood of being matched with another incompatible pair is increased when you join other KPD programs. It’s a numbers game. There are exceptions to this, if there are many pairs with rare blood types or when a pool contains many difficult pairs to match due to the recipient being sensitized. To read more about the paired exchange conundrum go to:http://www.lkdn.org/LKDN_The_Paired_Exchange_Conundrum.pdf

Here’s the conflict. Hospitals are under no obligation to tell their incompatible pairs about the benefits of registering with other KPD programs. This could result in a patient going to another hospital to receive a transplant. What company will educate their customer to an option that will result in losing their customer?

Kidney dialysis and kidney transplants are very profitable for these institutions. It costs approximately $83,000 a year to provide dialysis services for one patient and a kidney transplant can generate approximately $125,000 for a hospital.

What could be done to help patients understand their options and remove these conflicts of interest?

For the dialysis companies, CMS could authorize an independent company to educate the dialysis patients about kidney transplants. There’s no shortage of organizations that are qualified to provide these services.

For the transplant hospitals, CMS and/or UNOS could also authorize an independent company to educate patients about registering at other transplant hospitals and include the options patients have when a potential donor is incompatible.

A kidney transplant, whether from a deceased or living donor is a life changing and complicated process. Patients who are in need of a kidney transplant need much more help in understanding the options available to them.

Harvey Mysel is a two-­-time kidney transplant recipient and Founder of LKDN (Living Kidney Donors Network) a nonprofit organization that offers workshops and webinars to educate people in need of a kidney transplant about living kidney donation. LKDN also helps prepare those in need to effectively communicate their situation to family members and friends. LKDN’s website is www.lkdn.org and Harvey can be reached atharvey@lkdn.org

For a printable copy, click here.

Dialysis: continued debate about tragic choices, and how to finance not having to make them

This recent story about who pays for dialysis for uninsured illegal immigrants reminds me of the initial stories of how Medicare came to cover dialysis, making kidney disease unique in the way it is financed. There is a special horror in denying routine life saving treatment to patients who will die without it. That is, emergency rooms aren't supposed to deny treatment to anyone, but dialysis only becomes an emergency when regular access is denied...but we haven't done a great job of figuring out the financing.

Here's the NY Times story on illegal immigrants, by Kevin Sack: Deal Reached on Dialysis for Immigrants


"Twenty-one illegal immigrants will continue to receive regular dialysis at no cost for three years under an agreement disclosed Friday by Atlanta’s public hospital, Grady Memorial, and the world’s largest dialysis provider, Fresenius Medical Care.

"The deal solves an impasse created when a previous one-year contract between Grady and Fresenius expired on Aug. 31 and the dialysis provider refused to serve patients who showed up for their regular thrice-a-week treatments.

"The patients spent the past week seeking care in Atlanta-area emergency rooms, including Grady’s, which are required by federal law to screen and treat those at risk of impairment or death.

"In some instances, ailing patients were turned away by emergency room doctors who determined that their elevated potassium levels and fluid retention were not yet severe enough to justify emergency treatment. Each renal patient’s need for dialysis is different, but those unable to artificially clean the toxic substances from their blood can die in as little as two weeks.
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"The patients’ odyssey began two years ago when Grady closed its outpatient dialysis clinic, where many had received free treatment for years. Illegal immigrants are not eligible for Medicare, which covers most dialysis costs for American citizens. After the immigrants filed a lawsuit and gained news media attention, the hospital agreed to pay Fresenius to care for them during a transitional period. Other than the past week, it has never ended.

"Under the new contract, Grady agrees to pay Fresenius $15,500 per patient per year for treatment at the company’s outpatient clinics. That is less than half of the $750,000 flat fee Grady paid Fresenius for the yearlong contract that just ended.

"Grady, which receives direct appropriations from two county governments, faces a budget shortfall of more than $20 million this year. It maintained in negotiations that it could not afford to pay Fresenius the previous rates."
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Here's a previous post on how dialysis entered Medicare:

The special (Medicare) status of kidney disease

" In Seattle, in response to financial limitations, access to dialysis was restricted through explicit rationing carried out by an anonymous lay committee — an approach that was laid bare for the American public in a Life magazine article in November 1962.² Elsewhere, decisions limiting access to dialysis were tacitly incorporated into traditional medical decision making. Dialysis highlighted the tragic choices that had to be made when fundamental societal values encountered problems of scarcity.

"

...
"In November 1971, a patient received dialysis — albeit very briefly — at a hearing of the House Committee on Ways and Means."
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And here's a post on the continued debate about tragic choices, even without the added distraction of immigration status: 

Medicare payments for dialysis

The New York Times describes the growing federal expenses for dialysis, and some surrounding controversy: When Ailments Pile Up, Asking Patients to Rethink Free Dialysis


"Of all the terrible chronic diseases, only one —end-stage kidney disease — gets special treatment by the federal government. A law passed by Congress 39 years agoprovides nearly free care to almost all patients whose kidneys have failed, regardless of their age or ability to pay.


"But the law has had unintended consequences, kidney experts say. It was meant to keep young and middle-aged people alive and productive. Instead, many of the patients who take advantage of the law are old and have other medical problems, often suffering through dialysis as a replacement for their failed kidneys but not living long because the other chronic diseases kill them.