Economic Considerations

Cost of home therapies to society

A meta-analysis of 13 studies calculated the cost effectiveness of home dialysis compared to in-center1.  The annual cost of home therapies was significantly lower ($33 – 55,000) compared to in-center ($55 – 80,000).  The USRDS data for 2003 reported a cost advantage of PD over in-center HD of $13,687 per year2.  There may be significant differences in the cost of training between PD and home HD during the first year due to the longer period of training required for HD, resulting in one full time equivalent nurse training three times more PD patients than HD patients; the local cost of solutions and disposables for PD and HD, respectively and the frequency of treatment during training.  The lower reported cost for home therapies combined with the contributions resulting from the increased productivity of this cohort (since more home patients are employed) translates into markedly lower total cost to society.

Economic and regulatory considerations

The economic and regulatory issues are country specific and quite variable.  Home patients tend to be healthier and more compliant and avoid hospital stays at all costs which is beneficial to the program economics and reduces cost to society.  Furthermore, home patients are more likely to have employer group health plans (EGHP) than in-center patients3.  In the US, EGHPs contribute more than three times the prevalent Medicare rate.  Consequently, although only 25% of patients have EGHP primary coverage, this insurance provides 50% of dialysis clinic revenues across the country4.

Sources of home program operational costs

Facility Operations Personnel Costs Equipment Overhead
Rent Medical Director Furniture Supply company
Insurance Training clinicians Information technology Materials management
Utilities Social worker Medical equipment Administrative costs and insurance
Maintenance Dietitian Products Educational programs
Clerk Ancillary items Accounts payable
Accounts receivable
Medical billing

The relative cost of each category very much depends on the size of the program and the already existing resources of the parent organization.  The major types of reimbursement are through public and private insurance or a combination of both.  Adding to the complexity of reimbursement, several systems are often prevalent in the same country.  Furthermore, the coverage may vary as to specific modalities of therapy (e.g. CAPD only, home HD but no PD); location where training is provided (e.g. hospital, physician’s office, free standing unit); choice of facility and physician; types of medications and services such as transportation and paid assistants (relatives versus professional aides).

In some ways, the reimbursement structure may be considered the ultimate controlling force in the establishment and maintenance of home dialysis.  Ironically, it is the low reimbursement for dialysis in general that has stimulated the use of home dialysis in certain countries, while that same lack of funding is considered  to be the deterrent of growth in other countries.  Nonetheless, adequate reimbursement is not the only driver for home therapies as confirmed by the lack of growth of the home population in countries with special reimbursement for home dialysis.  On the bright side, there is interest in revising reimbursement to favor home and frequent therapies in various countries such as the UK, where the Ministry of Health has encouraged the consideration of such therapies and the US, where a recently introduced bill to Congress (HR-3096, Kidney Patient More Frequent Dialysis Quality Act of 2005) requesting payments for more frequent HD, whether daily, nightly or more frequent, done at home or in the facility.

“The proverbial 20 patients”

A critical number of patients is required to justify the aforementioned dedicated personnel, infrastructure and administrative expenses.  Extensive experience and various business models suggest that approximately twenty patients are required to keep the program profitable.  Thus, when starting a program the team must be aware of the initial negative economic impact, the importance of early growth and the potential limitations and compromises required.  Patient and staff retention are essential during these early stages.  Continuous quality initiatives (CQI), prompt and candid evaluation and resolution of issues at these early stages contribute to the accelerated growth.

References:

  1. Winkelmayer WC, Weinstein MC, Mittleman MA, Glynn RJ, Pliskin JS.  Health economic evaluations: the special case of end-stage renal disease treatment. Med Decis Making 22:417-430, 2002
  2. U.S. Renal Data System, USRDS 2003 Annual Data Report: Atlas of End-Stage Renal Disease in the United States, National Institutes of Health, National Institute of Diabetes and Digestive and Kidney Diseases, Bethesda, MD, 2003
  3. Witten B, Schatell DR, Becker BN.  Relationship of ESRD working-age patient employment to treatment modality.  J Am Soc Nephrol 15:633A, 2004 (Abstract)
  4. Schatell D, Witten B.  Dialysis patient empowerment: What, why and how.  Nephrol News Issues 19:37-39, 2005