In response to my piece about the Medicare's cut in the bundled rate, Gary Peterson writes in RENALWEB Oct 21:
If only it were that simple...
It is true that the bundling of ESRD meds was driven and promoted as a cost-savings benefit for Medicare by the largest dialysis company. However, these cuts also serve the long-term business strategies of the largest corporations.
The big prize is still dialysis patients with private insurance, especially in markets with little or no competition. Medicare pays approximately $240 per treatment, while private-insurance patients are charged thousands of dollars per treatment.
If these Medicare cuts go through, it will drive out more small and medium-sized providers, allowing the two largest dialysis providers to further dominate large geographic areas. This allows these large, for-profit corporations to control even more private-insurance patients. To save Medicare even more money, the largest providers are lobbying Congress to increase the time period, from 30 months to 42 months, that private insurance must pay for dialysis treatments.
Despite their posturing, it won't really matter to the two largest providers whether the cuts go through or not. They will benefit either way.
Telling providers to publically set a "fair price" means that all payers would expect to pay that price. Averaging the revenues from private-insurance patients and Medicare patients would greatly increase the cost of a Medicare dialysis treatment. Who will support that?
Finally, what patient life outcomes are we targeting for that "fair price"? Will "not dead and not in the hospital" remain the standard of care or should we be targeting higher-functioning patients who actually thrive on dialysis? (i.e. working-age patients who remain employed)
The patient organizations again lost a tremendous opportunity to improve patients' lives. Instead of bargaining for improved life outcomes, they simply fell in place behind the corporations that provide their financial sustenance with simplistic, fear-based messages. These organizations provide no effective message or voice for patients in complicated financial issues."
If only it were that simple...
It is true that the bundling of ESRD meds was driven and promoted as a cost-savings benefit for Medicare by the largest dialysis company. However, these cuts also serve the long-term business strategies of the largest corporations.
The big prize is still dialysis patients with private insurance, especially in markets with little or no competition. Medicare pays approximately $240 per treatment, while private-insurance patients are charged thousands of dollars per treatment.
If these Medicare cuts go through, it will drive out more small and medium-sized providers, allowing the two largest dialysis providers to further dominate large geographic areas. This allows these large, for-profit corporations to control even more private-insurance patients. To save Medicare even more money, the largest providers are lobbying Congress to increase the time period, from 30 months to 42 months, that private insurance must pay for dialysis treatments.
Despite their posturing, it won't really matter to the two largest providers whether the cuts go through or not. They will benefit either way.
Telling providers to publically set a "fair price" means that all payers would expect to pay that price. Averaging the revenues from private-insurance patients and Medicare patients would greatly increase the cost of a Medicare dialysis treatment. Who will support that?
Finally, what patient life outcomes are we targeting for that "fair price"? Will "not dead and not in the hospital" remain the standard of care or should we be targeting higher-functioning patients who actually thrive on dialysis? (i.e. working-age patients who remain employed)
The patient organizations again lost a tremendous opportunity to improve patients' lives. Instead of bargaining for improved life outcomes, they simply fell in place behind the corporations that provide their financial sustenance with simplistic, fear-based messages. These organizations provide no effective message or voice for patients in complicated financial issues."
The word out there is that rather than a 9.2% cut, the cut will be approximately 6.2%. Regardless, there will be a cut in the rate.
Fresenius lobbied for the bundle because they knew that a vertically integrated company like therirs would prosper under the bundle. Futhermore, they factored in that their lobbying prowess would limit the follow-up reduction in the bundled rate even if the utilization of injectable medications such as epo and iron went down.
My view: Yes, Gary is correct that the small dialysis providers are likely to be affected to a greater extent than the larger dialysis organizations (LDOs like FMS and DaVita). However, it still makes sense to reimburse providers based on the true cost of dialysis. The cost of dialysis will be higher than it is now, but certianly not the high amounts that private insurance pays in some instances. The benefit will be to remove the insane financial incentives that currently drive clinical care and will provide us with the backdrop to start focusing again on patient outcomes.
