Update, January 2015: US Renal Care and DSI Renal finalized a merger in January 2015. At press time, the company now operates 300 outpatient clinics, 147 home dialysis programs and 26 acute care hospital contracts treating approximately 23,000 patients in 33 states and the Territory of Guam.
Dialysis can be a tough business. Dialysis patients are sicker than they used to be. Medicare payment always seems inadequate. Government-imposed quality measures come off as being more about compliance than changing and improving health (do we know if visiting a patients four times/month really does improve care? Who writes those patient satisfaction surveys anyway?). There are distractions like whistleblower suits and ambulance companies paying patients to ride to their clinics.
Despite all that, the dialysis industry continues to operate and provide care to some 500,000 patients, many of whom are treated by companies in our annual ranking of the largest dialysis providers. It has been a fairly quiet year for consolidation and growth, most of which has occurred among the medium-sized providers like American Renal Associates, DSI Renal, and U.S. Renal Care.
In fact, U.S. Renal’s jump this year now makes the Plano, Texas-based provider part of the “Big Three;’ rolling past Dialysis Clinic Inc. for the first time. U.S. Renal grew 11.5% this year, a moderate pace after acquiring Innovative Dialysis Systems last year. And a new group led by two New York nephrologists has joined the list: Atlantic Dialysis Management Services. The company owns 13 dialysis clinics in the New York City area.
The two largest dialysis providers in the U.S., DaVita Kidney Care and Fresenius Medical Care North America, grew modestly in 2014–15, mirroring their growth from the previous year. There may, in fact, be limitations on their growth through the rest of the decade. Acquisitions of smaller chains may create anti-trust and prevent the LDOs from having too big a slice of the market.
The direction for home dialysis therapy
Each year, we look at growth among the largest dialysis providers and whether progress is being made to increase home dialysis therapy options. Indeed, the number of home dialysis patients increased from 44, 522 home hemodialysis and peritoneal dialysis patients to 47,475 among the 10 largest providers—about a 3,000 patient climb. Spread over 10 dialysis providers, however, that means about 300 patients per company over a one-year period. And it was a notable drop from the 5,212 patients who were added last year to the home dialysis population. PD was the clear leader, but home hemodialysis took a jump of almost 700 patients.
Dialysis providers continue to pay attention to urgent-start PD, showing an interest in finding ways to take advantage of reimbursement for home therapies and trying to avoid the dreaded implications of temporary hemodialysis catheters. Making any home therapy successful means a strong technique survival: will patients stay on long enough to appreciate the benefits?
Perhaps the next test for change will be the Comprehensive ESRD Care demonstration, which is scheduled to debut this month for large dialysis organizations. Some issues still remain unresolved, providers say. In our top 10 ranking, Fresenius Medical Care, DaVita Kidney Care, Dialysis Clinics Inc. and the Centers for Dialysis Care have all applied for the demonstration and are expecting to participate. The five-year demonstration will test whether a new formula for reimbursement—making the nephrologist and the dialysis provider the center of care decisions—will help reduce costs and improve quality. Those savings would then be shared by all the participants—and, hopefully, offer a more holistic approach to treating those with kidney disease. We’ll find out soon.