Value-Based Dialysis Care: An Update
 
            There is no question medical care for patients on maintenance dialysis is expensive. Most estimates range from $70-100,000 per patient per year. Recently, Pockros and associates published an analysis comparing the worldwide costs of dialysis care as a function of total medical care costs.[1] Many other studies have shown the cost of care in the US is higher than elsewhere because of prices, not utilization,[2] so it was a surprise to find that spending on dialysis care in the US is roughly half what would be predicted from international data. While there are limitations in the available data, these are unlikely to change the basic observation. It appears that the functionally single-payer system for financing dialysis care has already produced important costs savings on a global scale.
            Nonetheless, CMS is convinced it is not getting value for its money and is pressing on with a new project beginning in January 2022, based on early results from its current program known as the “Comprehensive End-Stage Renal Disease Care” model, which required creation of new business entities known as ESCO’s. In the fourth year of the model, 37 ESCO’s encompassing 1172 dialysis units, were providing services to 63,640 patients.[3] Drewry and associates have published an analysis of the organizational characteristics of the ESCO’s and their financial performance and mortality experience.[4] Given the great variety of organizational structures, the analysis was both complicated and somewhat limited, but the conclusions are important. First, organizations in their first year generally experienced cost-savings above the median, but with each year of experience gains went down. However, the more experienced units still saved more on average when the estimates were adjusted for other factors. The second observation was the more dialysis units involved in the ESCO, the lower the savings estimate. Third, lower mortality was experienced by units located in affluent ZIP codes, but overall standardized mortality was lower (0.93) than the national average of 1.0. Interestingly, participation of primary care physicians and/or vascular surgeons had no impact on observed results.
            The authors note experience with risk-bearing contracts is usually beneficial, just as has been found in the other CMS non-dialysis models. “This result suggests that organizations with such experience acquire knowledge, relationships, and strategies crucial to successful operation in a risk-based environment and are able to optimize performance over time.” They also note: “our findings that ESCO performance tended worse in communities with lower median income (higher mortality) or larger proportions of non-Hispanic Black (marginally worse financial performance) and Hispanic residents (higher mortality) align with studies of ACO’s…”
            A recent report on the first year of the advanced model care improvement model (BPCI-A) associated with bundled payments to hospitals has been published.[5] Beginning in January 2018, 826 hospitals participated in the program, 334 hospitals joined later, and 2,198 hospitals did not participate prior to 30 September 2019. The authors used the late joining hospitals and the non-participating hospitals to estimate the early impact of the program. For the study group, they found expenses/quarter went down a mean of $26, while in late-joiners the trend was $4/quarter. No effect was seen on 30-day or 90-day readmission rates or mortality rates. The also note the cost trends were driven almost entirely by reductions in spending on skilled nursing facilities.
            Lastly, I would recall the study by Sheetz and associates[6] showing that dialysis units subjected to financial penalties for being below average on various quality metrics showed no meaningful changes in those metrics in the years after being penalized. The also noted the penalized units were located in ZIP codes with a higher proportion of non-white residents, and residents with lower incomes.
            So, what, if any, conclusions can be drawn for this flurry of recent studies? Costs of health care are a function of price times volume. International comparisons suggest utilization in the US is not radically different, so much of the cost is a function of price. In our system, price controls would be politically suicidal, not to mention economically disruptive, so the “value proposition” has focused on the notion of reducing wasteful care. However, there is not real evidence that “good” care is cheaper than “bad” care, and a lot of the observed outcomes are best explained as insurance risk. Since US health insurance companies find it more profitable to function as claims processors, they prefer to pass the insurance risk on to providers. While physician decisions drive a lot of expenditures, they are generally unable to take on insurance risk, so those who can, like hospitals, tend to want to control physician behavior. But there is little evidence this actually either saves money or improves decision making. Lastly, most of the data show the “low hanging fruit” of the early years results in savings that dissipate quickly, yet payment models are predicated on continuous improvement. Further, most of the improvements made are local, and do not survive being “scaled up.”
            This does not mean I think there is no benefit to the effort, but it does suggest we need to separate quality from cost-control. Physicians and their organizations are generally willing to work together to improve care, but the current use of quality as a cudgel to browbeat them into taking insurance risk is contributing to the demoralization being seen. Cost-control is probably necessary, but the tools are different. We should, in my view, use robust quality measures to ensure our efforts to cut costs don’t hurt patient outcomes materially. Our traditional excuse that saving money will hurt patients no longer carries any validity, since all these studies show no impact of outcomes despite reduction in cost.
 
13 December 2021


[1] Pockros BM, Finch DJ, Weiner DE. Dialysis and Total Health Care Costs in the United States and Worldwide: The Financial Impact of a Single-Payer Dominant System in the US. JASN 2021;32:2137-2139. DOI 10.1681/ASN.2021010082.

[2] Tummalapalli SL, Anderson GF. Comparative Health Care Spending for Dialysis: An Example of Public Cost Containment? JASN 2021;32:2103-2104. DOI 10.1681/ASN.2021050694.

[3] Tummalapalli SL, Mohan S. Value-Based Kidney Care: A Recipe for Success. CJASN 2021;16:1467-1469. DOI 10.2215/CJN.11250821.

[4] Drewry KM, Trivedi AN, Wilk AS. Organizational Characteristics Associated with High Performance in Medicare’s Comprehensive End-Stage Renal Disease Care Initiatives. CJASN 2021;16:1522-1530. DOI 10.2215/CJN.04020321.

[5] Joynt Maddox KE, Orav EJ, Zheng J., Epstein AM. Year 1 of the Bundled Payments for Care-Improvement—Advanced Model. N Engl J Med 2021;385:618-627. DOI:10.1056/NEJMsa2033678.

[6] Sheetz KH, Gerhardinger L, Ryan AM, Waits SA. Changes in Dialysis Center Quality Associated with the End-Stage Renal Disease Quality Incentive Program. Ann Intern Med 2021;174:1058-1064. DOI 10.7326/M-20-6662.

Further Reading

Numbers
Numbers are everywhere, but we need to be conscious of both the uses and the abuses of them.

Paying for What We Don't Want
Do you believe the proverb "you get what you pay for"? What if you pay for what you don't want?

The Center Effect
Some dialysis units have consistently better performance than others, even after adjusting for individual patient variables, which is termed the center effect.  This has important implications for hospitals and health care organizations as they respond to public reporting of data.

Update on Value Based Purchasing
Three articles this week provide a useful update on value based purchasing.

Why the Value Proposition is Not Selling
Why is there resistance to the value proposition in health care?