ALLEN R. NISSENSON

This session explored the issues related to managed care and reimbursement for home hemodialysis (HD). Allen Nissenson, MD, from UCLA School of Medicine, Los Angeles, California, opened the session with an overview of the current state of managed care for end-stage renal disease (ESRD) patients in the United States. There are presently 16,000 ESRD patients in managed care plans, and this number continues to grow slowly as more people join managed care plans prior to developing renal failure. Currently, patients with renal failure are prohibited from joining such plans, but may remain in if renal failure develops after they join the plan. Very little information is available on the characteristics of such patients or their clinical or economic outcomes.

Dr. Nissenson reviewed the factors that determine the choice of dialysis modality worldwide, pointing out that nonmedical factors are the most important, since most clinicians feel that medical outcomes are similar with the various forms of dialysis. Reimbursement (physician, facility, or overall) is by far the driving force for modality selection in most parts of the world. Additional nonmedical factors of importance include physician bias, physician and patient education, resource availability, and social mores.

Coleman Mosely, MD, Renaissance Health Care, Inc., Westminster, Colorado, discussed the factors that drive the global costs for ESRD patients. These include those related to numbers of patients and individual costs. Current estimates of US$18 billion annually do not adequately reflect non-Medicare costs. The total number of ESRD patients grows at a rate of 7% – 9% annually. This growth relates to an increase in incidence among the U.S. population, decreased mortality rates, and a plateau in transplantation rates. The rising incidence is most steep in the population over age 65, correlating with an annual increase in the average age of ESRD patients. Thus the number of comorbidities associated with patients is increasing. Because there is no way to control the age of the population, the role of renal disease management is to focus on the process of care so as to decrease the cost of each patient’s care. Now that there are more patients in risk Health Maintenance Organizations (HMOs), and these HMOs have financial risk for 30 months, the interest and ability to apply systematic resources to such patients is increasing. The opportunity to improve the process of care for patients is one not to be missed. Clearly, early proactive care benefits the patient’s quality of life and reduces the risk factors associated with increased hospitalization rates.

Because hospitalization accounts for 30% – 40% of total costs, mechanisms to reduce the need for hospitalization are being developed and promoted. The renal community also realizes that the best long-term reduction in cost will come when patients begin dialysis in a timely manner, and in the best medical condition possible. Home HD can be a component of this system if it meets the needs of the patient for quality, compliance, education, and cost effectiveness.

The implications of reimbursement and the distribution of costs for ESRD patient care from the perspective of the provider were then reviewed by Thomas Golper, MD, University of Arkansas for Medical Sciences, Little Rock, Arkansas (“Managed Care Is About Money,” H.L. Mencken). The role for professional health care providers is to cut costs without damaging quality, and to improve quality if possible. The driving forces for rising costs include technological advances, consumer activism, an eroding doctor–patient relationship, and the many inefficiencies in the health care delivery system. The provider response to these forces must include focusing on efficiency, productivity, and outcomes. Dialysis chains have exemplified the maximization of efficiencies in the chronic in-center HD setting. However, the incentive has been to reduce costs, with minimal incentive to improve outcomes. Some reasons for this are the existence of in-hospital “acute” contracts and inpatient physician fees. Thus, incentives for reducing costs are at cross purposes in the traditional reimbursement structure. Global capitation strategies realign the incentives such that payers, providers, and patients all have the same incentive of good health at a reasonable and defined cost.

For home HD, the advantage of a global capitation is that the provider, rather than a regulator, decides how the resources are utilized. Savings in one area (e.g., transportation to the dialysis facility) are transferred to a preferred area (e.g., hiring of home dialysis helpers). In chronic in-center HD, labor represents 75% of the costs. In the experiments of the early 1980s with home helpers, 17% of the total costs were for the helper. Supply costs for home HD will be similar to in-center costs; Canadian studies have already shown the success of reuse in this setting. Thus, the start-up costs (water systems, dialysis machines) are amortized against transportation savings, labor savings, and the high probability of morbidity savings because treatments will be timely and not missed. Thus, the scenario makes economic sense, but only in a global capitated environment wherein the incentives are aligned and the provider decides how the money is spent.

Finally, Phil McFarlane, MD, FRCPC, University of Toronto, Toronto, Ontario, described the funding for dialysis in the Canadian health care system, a model of global capitation and a single-payer system, in order to see what lessons might be learned from that experience. Canada has a nationwide health care system similar to managed care in that it is a comprehensive single-payer system. It differs from the American model in that it provides universal coverage that is portable across the country. Other significant differences include the fact that it is nonprofit and publicly managed. Health care funding in Canada comes from both federal and provincial taxes, while administration of the health care system is the responsibility of the individual provinces.

The province of Ontario can be used as an example of how dialysis care is funded in Canada. In Ontario, dialysis care is funded through the global budgets of local hospitals, and a cost recovery mechanism allowing hospitals to gain access to additional funds to pay for treatment provided beyond their budgetary capacity. A final funding mechanism allows for planned program expansion and for the development of new dialysis programs. Hospital and physician funding patterns have favored in-center HD over home-based therapies. The trend in modality distribution has reflected this, with usage of peritoneal dialysis and home HD falling, while in-center HD has enjoyed brisk growth. Recently the government implemented changes in hospital and physician dialysis funding that strongly favor peritoneal dialysis, at the expense of all HD methods including home HD.

The funding for dialysis in Canada can be used as a model of dialysis funding within a managed-care system. In such a system the payer can influence the distribution of patients among dialysis modalities by controlling funding for new programs and program expansion, as well as by controlling financial incentives and disincentives for hospitals and physicians. Using Canada as an example, we can demonstrate that nephrologists should ensure that they remain closely involved in dialysis funding decisions, so that financial concerns do not solely dictate dialysis modality choice for our patients.