Commentary -Dr. Ajay K. Singh
It turns out that the dialysis industry wanted bundling of ESRD services all along.
While the reduction of ESA dosage is, in my view at least, a positive element of bundling (and I testified in 2007 to the House Ways and Means Committee of the US Congress on this), little did I realize that the dialysis industry favored moving to a model of bundled payments and lobbied for this. Was it because it would do better financially under a bundle? Or was it because it would improve care by reducing exposure to high dosages of ESA? Perhaps, we will never know. In a client case study the BGR group writes on it’s web site:
“When the world’s largest dialysis provider—Fresenius Medical Care (FMC)—sought reform in the Medicare payment system for patients with End Stage Renal Dialysis (ESRD), it reached out to BGR’s experienced healthcare lobbyists. FMC wanted Medicare to move from a model of paying separately for dialysis treatments and billable drugs to a system of bundled prospective payment. MedPAC and the Government Accounting Office already embraced this reform, citing improved quality and stability of care for ESRD patients. But the issue never came before Congress for enactment. BGR entered the scene after passage of the House Medicare reform bill, known as the CHAMP Act. CHAMP had several positive dialysis-related policy provisions—including a bundled payment system for ESRD services—but instead of providing an update formula for a Medicare dialysis composite rate, it instituted a tiered drug payment structure for large versus small-scale providers.
Seeking reform, BGR immediately focused on the Senate Finance Committee, which was ground zero for Medicare legislation because of a veto threat hanging over CHAMP. Here the dialysis industry enjoyed broad support but lacked an effective legislative champion. BGR, knowing veteran members of the committee already had their wish list locked up, turned its attention to the committee’s newer members, who understood the importance of ESRD reforms and the long-overdue payment update. Working in concert with other major stakeholders, BGR sought to persuade these newer members that the industry coalition behind ESRD reform was unprecedented and that immediate action was needed. Key committee members made it clear to Chairman Baucus and Senator Grassley that any Medicare package passed by the Senate Finance Committee must include not just a bundled payment but also an update mechanism, and that discrimination against larger providers was untenable."
So what does this mean? Below is an excerpt of a post by a nurse published Oct 8, 2011 on the effects of bundling on her dialysis unit:
"It means cost cutting exercises every single day of every single month for the renal unit.
Cheaper supplies because this is a controllable cost, also educating and teaching staff to be more vigilant when using supplies.
Medications are costly so strict control of anemia is important as Epogen used to help control anemia is very expensive. Prior to 2011 Epogen was separately billable so it was given more freely, although renal units always tried to control anemia levels and had objectives to reach there was no financial pressure to control anemia. Once dollars became an issue renal units all over the country suddenly became very focused on controlling anemia by focusing on how to control anemia within a certain range.
Staff is the single most expensive commodity, so this year staff have been streamlined, in a effort to control costs. The renal community is small, staff are transient and the work is difficult.
Careful recruiting of new staff has become important, retention being top of the list.
Overtime is another area being focused on, although in my opinion I rarely see overtime unless warranted.
Training new staff is costly so if companies cannot keep staff then it is a vicious circle of training and losing. All sorts of pre employment tests are becoming utilized in the recruitment process in an effort to recruit the right staff."
Bottom line - bundling could have positive cost controlling benefits to it. It's introduction stems from rising costs that needed to be constrained. However, in a world where many dialysis patients are managed by technicians, some better than others, and where subtle reductions in services and laboratory testing could have far-reaching consequences to care (see an earlier post), we need to be very vigilant that the bundling era does not represent a hair-cut for patient's -- a retreat to less care for less money, but maintaining profits for the dialysis industry.
So what does this mean? Below is an excerpt of a post by a nurse published Oct 8, 2011 on the effects of bundling on her dialysis unit:
"It means cost cutting exercises every single day of every single month for the renal unit.
Cheaper supplies because this is a controllable cost, also educating and teaching staff to be more vigilant when using supplies.
Medications are costly so strict control of anemia is important as Epogen used to help control anemia is very expensive. Prior to 2011 Epogen was separately billable so it was given more freely, although renal units always tried to control anemia levels and had objectives to reach there was no financial pressure to control anemia. Once dollars became an issue renal units all over the country suddenly became very focused on controlling anemia by focusing on how to control anemia within a certain range.
Staff is the single most expensive commodity, so this year staff have been streamlined, in a effort to control costs. The renal community is small, staff are transient and the work is difficult.
Careful recruiting of new staff has become important, retention being top of the list.
Overtime is another area being focused on, although in my opinion I rarely see overtime unless warranted.
Training new staff is costly so if companies cannot keep staff then it is a vicious circle of training and losing. All sorts of pre employment tests are becoming utilized in the recruitment process in an effort to recruit the right staff."
Bottom line - bundling could have positive cost controlling benefits to it. It's introduction stems from rising costs that needed to be constrained. However, in a world where many dialysis patients are managed by technicians, some better than others, and where subtle reductions in services and laboratory testing could have far-reaching consequences to care (see an earlier post), we need to be very vigilant that the bundling era does not represent a hair-cut for patient's -- a retreat to less care for less money, but maintaining profits for the dialysis industry.
