Hospital-operated dialysis units dwindle

Fewer hospitals run their own dialysis units, as changes to the business model have made the practice less lucrative, Crain's Chicago Business reports.

For-profit firms that specialize in dialysis units have much lower costs, including lower wages for nursing staff, according to the article. "Hospitals have been shedding this service for years," John Sullivan, an associate professor of finance at Boston University, told Crain's.

Payment methods for dialysis care have also changed significantly. In 2011, the Medicare Payment Advisory Commission (MedPAC) bundled the separate treatment and drug payments into a single payment, cutting outlays significantly. The payments have declined in recent years as a result, according to Crain's, even as the number of patients with end-stage renal failure grows.

Based on public records, there are only 10 hospital-based dialysis units in all of Illinois, the fifth most populous state in the U.S., according to Crain's. Another 210 operate as standalone units operated by firms such as Fresenius Medical Care. Only 10 percent of the 5,550 dialysis units nationwide are operated by hospitals, according to MedPAC data.

For example, NorthShore University Health System's hospital in the Chicago neighborhood of Highland Park recently decided to shut down its unit and outsource it to Fresenius, which plans to open a new dialysis center near the hospital. In its application with state regulators to move the unit, the hospital noted that operating the unit on its premises "is no longer consistent with the acute care mission of a community hospital, such as Highland Park Hospital," Crain's reported.

Meanwhile, Fresenius recently reported that it expects its annual sales to nearly double to $28 billion by the end of the decade, according to Reuters.

In New York City, the public Health and Hospitals Corp. is turning over all its dialysis centers to a private vendor in order to save $150 million a year, despite concerns that the quality of care might suffer.

To learn more:
- read the Crain's Chicago Business article (subscription may be required)
- check out the MedPAC survey (.pdf)
- here's the Reuters article

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