Dialysis has become an industry dominated by large chains. According to the 2015 United States Renal Data Systems Annual Report, the three largest dialysis organizations treated 71% of patients in 2013. After peaking in 2006, the incident rate of end-stage renal disease patients has slowly declined over the last nine years. This means it is a difficult industry for businesses that want to grow. Antitrust laws make it tough for the two largest providers, Fresenius Medical Care North America and DaVita Kidney Care, to buy up their competition. Providers have started to get more creative about their growth, investing in coordinated care, partnering with physician groups, and expanding into related forms of health care.
Among all the uncertainty, this country’s sixth largest dialysis provider, Satellite Healthcare, plans to grow its patient base by approximately 42% in the next five years, from 7,000 patients to 10,000. I talked with Satellite’s president and CEO Rick J. Barnett about the non-profit dialysis provider’s plans for the future.
Focus on research, evidence-based care
Barnett took the helm at Satellite in September 2014, replacing Mark Burke, who led the company for 23 years. Barnett has more than 30 years of experience working in non-profit hospitals and ambulatory care centers. Satellite is his first experience working in the dialysis industry.
“There are a lot of similarities in the way that the [dialysis] companies operate,” Barnett said. “I was a little bit surprised by that. In other markets I’ve seen a much broader spectrum of ways that organizations position themselves to carry out clinical care, etc.”
Barnett said he does not see as much evidence-based clinical practice in dialysis care, compared to other specialties.
“There is evidence-based practice, obviously,” Barnett said. “But some of it seems to be more cultural practice within the industry and maybe not always based on scientific advances.”
He said one of his goals at Satellite is to “bring a little bit more focus on research into care processes.”
Satellite has funded more than $15 million in research since 2000. Going forward, Barnett said the company will put all of its research resources into practical care process improvement.
“If you look at pretty much any disease processes like cardiac or cancer… almost all of the major advances in clinical outcomes have been driven by care process improvement. Sometimes they are aided by drugs or devices, but there’s very few magic silver bullets in any disease process. It’s almost all just care process improvement. That’s really going to be a big focus of ours nationally. “
Barnett said they have built partnerships with half a dozen major academic medical centers, and three big state systems are joining them as well. He did not disclose the names of any of the organizations, because he said they are still finalizing the agreements. Research, he said will be the big differentiator between Satellite and some of the other dialysis providers. “As we look at making advances and care processes we may break the mold and do some other things for our patients as well.”
Barnett said his plans to grow the company include expanded partnerships with academic medical centers and university health systems, creating new relationships with physician groups, and selectively looking at acquisitions, primarily from divestitures of other organizations.
He said they are developing “some very clear criteria of markets that we will help serve and invest in.” Its important, when choosing a region, that “we can have a significant enough presence in a market to really help provide a more full continuum of care … we will shy away from areas where it’s like Starbucks, with a center on every corner.”
Barnett said they would also expand into other areas of health care. “Over the next four or five years we will be expanding what we do for our patients as part of our mission to try to treat more of the whole patient. This may include helping to monitor some of the other related chronic disease conditions.” He said the strategy includes partnering with existing providers in certain regions, as well as establishing the services themselves.
Focus on home dialysis
Of the 10 largest dialysis providers, Satellite has the highest percentage of its patients, more than 22%, using a home dialysis modality. And the need and availability of home dialysis in a region is a significant factor the company will consider when looking at acquiring or opening new clinics, Barnett said. Moving forward, Barnett he wants Satellite to significantly increase the use of home dialysis among its patients.
The provider has such a high percentage of home dialysis patients “because it has been a primary focus of ours. Patients do better at home. They feel better. They often times still work. And they have less hospitalization compared to in-center patients.”
Barnett also said the company’s status as a non-profit has played into its focus on home dialysis. “We focused on our home program early on when it was very risky to even know if you can financially even make care at home work. But we did that because the bottom line was not a primary driver … first and foremost we focus on what’s the best thing that we can do for patients. How do we make it work even if it’s not as profitable as some other things that we can do?”
Continuing to evolve
Satellite has undergone a lot of leadership change in the last few years, including Barnett himself. “It’s healthy for any company to keep fresh, to keep innovating, and keep improving what they do…organizations go through various life cycles and different leaders bring different contributions and other leaders bring other areas of expertise in the life cycle of the organization.”
Barnett said the biggest contribution he brings to Satellite is his 32 years in health care leading mission-based non-profits. “I can help deepen our focus on the mission that we were founded on first and foremost.”
He said the company’s focus is to lead in clinical quality, and to grow the organization so that they are able to afford to make investments in clinical improvement.
“I think we’re going to see radical changes continuing in the health care industry under health care reform, and if you just do what you’ve always done, you’ll find yourself like Blockbuster and be out of business.”