Dialysis Patients

Medicare is trying to cut the cost of serving dialysis patients by paying dialysis centers and kidney doctors for cutting costs, even if the patients die.

91% of dialysis patients do not participate in Accountable Care Organizations, which have their own incentives to cut costs, so Medicare is trying to set up groups just for kidney patients. These are called End Stage Renal Disease seamless care organizations (ESCO). Dialysis patients are "1.3% of the Medicare population and accounted for an estimated 7.5% of Medicare spending, totaling over $20 billion in 2010."

ESCOs will receive 50%-75% of Medicare's savings on dialysis patients, compared to baseline costs. "Members must place their fiduciary duty to the ESCO before the interests of any ESCO participant" (Medicare's explanatory slides p.39)

They have 23 quality measures, one of which is the death rate. Medicare has not yet announced the weight to be given each measure, but judging by weighting for Accountable Care quality measures, no one measure will have much weight, including the mortality rate, so ESCOs can meet quality standards without minimizing deaths. Since a death stops all costs, the financial rewards for death are large.

Each "beneficiary’s first visit to a given dialysis facility during a particular period will prospectively match that beneficiary to the dialysis facility, and by extension the ESCO, for the upcoming performance year" (Request for Applications-RFA p.12). So a patient can avoid the incentives by changing to another dialysis facility, not part of the same ESCO. An email from Dr. Alefiyah Mesiwala, Medicare's leader for the program, says, "Once a beneficiary is seen by an ESCO facility, they are then matched for the life of the entire model unless the beneficiary dies, has a transplant, or becomes ineligible as stated in the RFA. Once a beneficiary is aligned to a facility, even if that beneficiary visits multiple facilities or providers in a given performance year, all costs associated with that beneficiary will be attributed to the ESCO facility the beneficiary was initially matched to per the matching rules outlined in the RFA" (5/5/2014).

The "first visit" rule gives an incentive for dialysis centers to be unable to find space for high risk patients (old or with multiple sicknesses), so they go to another ESCO at least for the first visit.

When patients find themselves in an ESCO, patients can avoid the cost-cutting incentives by finding a dialysis center which is not part of the same ESCO, and using doctors who are also not part of that ESCO. These other centers and doctors will not face the conflict of interest of being rewarded for cutting costs, so patients are more able to trust their recommendations and treatment decisions.

Dialysis companies and researchers doubt the ESCOs will be successful.