Dialysis Business Indicates How Hard Controlling Medical Costs Will Be

(MoneyWatch)  The two core tenets of reforming the medical system in the United States are to reduce costs and expand coverage. The two are not mutually exclusive as they sound because if efficiencies are generated that frees up money to provide more care. It may not reduce the total amount spent but will provide more money to treat more people.

The example of how dialysis is managed in the United States indicates how hard this will be to achieve. The dialysis treatment business costs the U.S. about $65 billion a year. Much of this treatment is provided by private companies and funded through insurance. Two companies, Fresenius Medical Care and DaVita, dominate this industry.

People are on dialysis for extended periods of time perhaps even their whole lives as the only other major treatment available for many conditions are transplants. Because of the extended treatment times this means that eventually the U.S. Government through Medicare and Medicaid pay for dialysis. These programs do not actually cover the full cost of dialysis so private insurance subsidizes the public patients. Transplants reduce the annual cost of treatment substantially but are harder to perform due to supply.

Some have criticized the dialysis companies for not trying to get their patients to have transplants or at least get on waiting lists. They believe the companies would rather have a steady stream of people coming in for treatments and keep up their revenue. This also extends to doctors who make revenue of this as well but not necessarily transplants. In some cases the doctors own the dialysis facilities causing further conflicts of interest.

Various studies have shown that having a transplant early saves the insurance companies and the Government a great deal of money over the life of the patient when compared to extended periods of dialysis. The trick will be coming up with more organs to transplants and weaning those in the health business away from defaulting to dialysis.