Academic journal article Health Care Financing Review

Provision of Home Dialysis by Freestanding Renal Dialysis Facilities

Academic journal article Health Care Financing Review

Provision of Home Dialysis by Freestanding Renal Dialysis Facilities

Article excerpt

INTRODUCTION

In 1992 there were 157,354 dialysis patients with end stage renal disease (ESRD), 145,399 of whom were covered by the Medicare program (Health Care Financing Administration, 1994). There are two types of dialysis--hemodialysis and peritoneal dialysis. Patients undergoing hemodialysis are attached to a machine for 3 to 4 hours, approximately three or four times a week. The patient' s blood is fed into the machine, which purifies the blood and returns it to the patient. The second type of dialysis is peritoneal dialysis, where the peritoneal cavity is filled with dialyzing fluids and the patient' s blood is purified as it passes through the peritoneal membrane. This process is continuous and the dialyzing fluid is replaced every few hours. During 1992, most patients in the ESRD program underwent outpatient hemodialysis. However, a significant minority (28,896 of 157,354) used other dialysis modalities, namely, home hemodialysis, home or outpatient intermittent peritoneal dialysis (IPD), CAPD, and CCPD. The less common modalities, which are referred to as "minority" modalities in this article, have various advantages and disadvantages relative to outpatient hemodialysis. For example, CAPD and CCPD do not require patients to visit a dialysis center three times per week, thus providing more freedom. Weighed against this is the increased risk of infection associated with CAPD and CCPD (Nolph, Lindblad, and Novak, 1988). These minority modalities are, therefore, suitable and preferable for some patients, while being disadvantageous to others. Ideally, physicians should be able to select from the complete range of modalities in order to pick the modality appropriate for their patients' circumstances. This article links patient-level data from the HCFA ESRD Program Management and Medical Information System (PMMIS) to facility data from the ESRD Statistical Cost Report Forms and the ESRD Facility Survey, to explore the determinants of modality provision among freestanding renal dialysis facilities, by examining whether they provide CAPD, CCPD, and home hemodialysis.(1)

The purpose of this article is to provide information about the use of these various modalities and to discuss issues relating to their provision. Apart from the minor exception of home IPD, CAPD and CCPD have grown fastest of all modalities, especially the latter (Health Care Financing Administration, 1994). The high growth rate of CAPD and CCPD, which in 1992 accounted for about 90 percent of the minority modalities, gives further motivation for examining the determinants of their provision.

This article applies standard neoclassical economic ideas about firm behavior to freestanding renal dialysis facilities. A facility is assumed to decide whether to provide a modality, based on its self-interest. The primary objective of most, and the sole objective of many, facilities is profit maximization. However, facilities are constrained by several considerations in their efforts to increase profits. First, facilities are constrained by the extant level of technology, which restricts the level and intensity of patient services that can be provided, given the availability of machines and staff. Second, a facility is bound to provide a certain quality of service to its patients. Thus, although a facility could lower costs by reducing the length of a dialysis session, it must also maintain the health of its patients. This must be done not only because there are generally accepted standards of medical practice for dialysis, but also out of self-interest, since facilities need to maintain their patient base. The factors that determine whether a dialysis modality is provided are a combination of facility and patient characteristics. The patient characteristics affect the feasibility and appropriateness of alternative dialysis modalities, for example, income, race, age, and patients' health. The facility characteristics affect the potential profitability of providing a dialysis modality; for example, facility size and area characteristics (location). …

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