Dialysis: The Great American Scam

When a colleague of mine recommended a book, I was hoping it would be something fun. Maybe a sports anthology. Or a music biography. Even a novel. Alas, it was about dialysis, as in the great American scam that it is. It turns out I had already come to the same conclusion. Here’s why, supported by the meticulous research of Tom Mueller.

 

The Truth

Dr. Willem Kolff, a doctor working in Nazi-occupied Holland, is often credited with building the first machine for human dialysis (or kidney replacement therapy) in 1943. The era was one of great innovation in the burgeoning field of nephrology—about a decade later, the first kidney transplant took place between identical twins at the Peter Bent Brigham Hospital in Boston.

Suddenly, deadly organ failure didn’t have to be…deadly.

Of course, the invention of life-saving technologies came with a sense of unease.

How about the patients who were still dying due to lack of access?

In the US, this angst ultimately led to novel legislation in 1972 that allowed those with advanced kidney disease to be covered under the Medicare program, regardless of age. The expectation was that dialysis would be used either for those with acute (and reversible) kidney failure or those who would eventually receive a transplant. Costs, while high, would be manageable.

With a guaranteed payer (i.e. the federal government via the US taxpayer), Americans saw opportunity. Dialysis units, often owned by nephrologists and/or small companies, proliferated. For a time, the sale to larger entities was a way for humble kidney doctors to strike gold.

As the process accelerated, the players became larger and fewer. Today, the dialysis scene in the US has been described as a duopoly, with two publicly-traded companies—Fresenius and DaVita—controlling about 80 percent of the market. Americans no longer bat an eye when they see some of the country’s sickest patients receiving treatments at their local strip mall, next to Chuck E. Cheese and Dollar General.

While publicly-traded companies do have to deliver a reasonable product, shareholder satisfaction is paramount. In other words, the focus is not on success 30 years down the line but rather the next quarter. In a what-have-you-done-for-me-lately environment, profits must flow.

Many tactics can be deployed to achieve this goal:

• Provide dialysis to those who don’t need it. Let’s take this one off the table as no one wants to burn in Hell.
• Offer dialysis to those who, given a limited life expectancy, might be better served by palliative care.
• Discourage transplantation to avoid patient loss.
• Keep treatments on the shorter side to increase the number of patient “shifts” that can be accommodated in one day. Never mind that research (and common sense) suggest that longer and slower treatments more closely replicate actual kidney function.
• Badger (i.e. lobby) the government to keep payments for dialysis generous.
• Give preferential treatment to those with private insurance that typically pays more for dialysis.
• Replace trained nurses with less-trained technicians.
• Cut staff and ask those remaining to work slightly harder.
• Use similar dialysis prescriptions for all patients, allowing for an economy of scale.
• Encourage the use of medications that are reimbursed and discourage the use of medications that are not.
• When called out on gray-area business practices, admit no wrongdoing but settle. (And take advantage of the fact that kidney disease is genetically overrepresented in African-American communities which often lack the resources to raise a ruckus.)
• Dabble in most of the above, all the while creating glossy websites and brochures that suggest you care about patients.

 

And what about the nephrologists?

We already know that many nephrologists are geeks. It turns out the vast majority are also meek, powerless to change the system thrust upon them.

There’s the burden of patient care and the time constraints that come with it.

Then there’s the fact that dialysis is a nephrologist’s biggest money maker, and with only two options, no one wants to bite the hand that feeds them. (I eventually want to leave the field of medicine, allowing me to grow a set of canines.)

And finally, there are the ones who get in bed with the companies. It’s called a joint venture, otherwise known as shared ownership. For a nephrologist, it’s legalized double dipping—getting a sliver of facility fees along with the physician fee.

With everyone at the top living large, where’s the incentive for change?

To put it bluntly, nowhere.

What was once arguably the most cutting-edge field in medicine is now known for its lack of innovation. Sure, new medicines appear from time to time, but the largest figures in the field aren’t particularly interested in identifying a disruptive technology.

Stated another way, if not for these corporate middlemen, taxpayer money that could have otherwise been directed to research and development is instead funneled to the likes of Warren Buffett, whose Berkshire Hathaway owns something like 40 percent of outstanding shares in DaVita. As an astute investor, Buffett knows that a business with clients who choose between paying and dying is a safe place to direct funds.

Meanwhile, despite adjustments for a wide variety of factors, dialysis outcomes in the US continue to fall short of those in other wealthy nations.

 

Answers to Your Questions

No, I’m not anti-American. I was born in Milwaukee, and this majestic country is the only one I’ve ever known.

No, I’m not anti-capitalism. Those who work hard, create, and add value to society deserve to make more money.

No, I don’t think this article will change anything.

And, yes, I will end with one question myself:

Given all the ways to turn a profit in the greatest country on Earth, does treating kidney failure need to be one of them?