The Economics of End-Stage Renal Disease, Essay Example

End-stage renal disease is a serious condition in which the kidneys are no longer functioning.  The illness typically occurs as chronic kidney disease damages the kidneys to the point they are only functioning at about 10 percent of normal capacity. End-stage renal disease patients require dialysis or a kidney transplant. This is the only treatment.  Some dietary modifications may help the symptoms but there is no cure.  The disease is most commonly due to diabetes or high blood pressure. The disease has a long and slow progression getting to the point of dialysis or transplant necessity; the last resort. Due to the severity of the disease, the costs associated can be enormous. Healthcare organizations must look at the economics as strategic plans are formulated.  Medicare and Medicaid, as well as private insurances, play a role in the determination for how end-stage renal disease is approached.

In Nancy Short’s article Applied Healthcare Economics for the Noneconomics Major; there are two important factors which preside over end-stage renal disease treatment. The first is patient and provider treatment decisions and the reimbursement policies determined by the government. The Centers for Medicare and Medicaid Services provide close monitoring of expenditures.  Previously this organization operated under bundled rates for treatment. Meaning that certain procedures were included under one title, or ‘code’ and providing payment for the package as a whole.  After 2003 Medicare changed the mechanism for reimbursement and no longer bundled treatment modalities together under the assumption it was financially feasible.  Codes were ‘unbundled’ and a specific code applied to each individual diagnosis and treatment and reimbursed separately.

From an organizations standpoint, providing treatment to end-stage renal patients can be costly. Through the years it has been challenging to meet the needs of these patients and contain costs. Expenditures will continue to increase as a result of technology, drugs, aging population, increasing incidence of obesity, diabetes and hypertension (Short, 2007).  Controlling costs is a main focus of any organization. Research and evaluation of costs and expenditures is important to conduct on a regular basis.  Trying to determine break-even factors for policy and procedure implementation is important for reimbursement rates to equal the cost of providing the services (Short, 2007).  By creating dialysis treatment facilities it was believed to create this type of macroeconomical scenario.

However, the cost of end-stage renal disease continued to rise over the years. In order to control the costs, payment structures were changed and shifted the reimbursement schedule onto the patient and provider and off of the government. For the patient this could mean another reorganization of services provided.  As the number and acuity of patients increase, the availability of trained nephrologist will decrease causing the total costs to continue to rise (Nissenson & Rettig, 1999). As Medicare and Medicaid reduce their reimbursement rates, private insurances will follow the lead. The disallowable fees which are written off by the providers will create a scenario where treatment options in terms of location and quality could suffer.

As patients live longer with advanced technology and dialysis treatment or organ transplant, options for improvements in therapies and reimbursement are still a debate. Research has opened discussion for the benefits of cost containment and patient comfort through daily dialysis over the traditional breaks between treatments. The costs of providing daily dialysis on a large scale can be substantial but with significant improvements in the outcome measures with deceased hospitalization rates; demonstrating cost-effectiveness or budget neutral from a global standpoint (Ananthraaman & Moss, 2007). Ethical issues must be considered and balanced against cost. Ethically appropriate criteria including likelihood of benefit, urgency of need, change in quality of life, duration of benefit, patient selection, equitable distribution and the amount of resources required (Ananthraaman & Moss, 2007).

Balancing the costs of treatment versus organization growth and resulting ethical concerns for patients is a delicate and methodical undertaking. Careful consideration of business implications and patient care can present a tremendous challenge for the healthcare industry. Medicare, Medicaid and private insurances as well as private pay patients all pay a role in the business and ethical aspects of this dilemma.

References

Anantharaman, P., Moss, A.H. (2007). Should the medicare ESRD program pay for daily dialysis? An ethical analysis. Advanced Chronic Kidney Disease. July;14(3):290-6. Retrieved from http://www.ncbi.nlm.nih.gov/pubmed/17603984

Nissenson, A.R., Rettig, R.A. (1999).  Medicare’s end-stage renal disease program: current status and future prospects. Health Affairs, January/February, 1999. Retrieved from http://content.healthaffairs.org/cgi/reprint/18/1/161.pdf

Short, N.M. (2007). Applied healthcare economics for the noneconomics major. Health Policy and Politics: A Nurses Guide, 3^rd Ed.  Jones and Bartlett Publishers.