First Do No Harm ... to the Shareholders

Discussions for Patients, Family, and Friends HD For Patients
1

First Do No Harm … to the Shareholders
The Patient as Profit Center

By CARL GINSBURG

Nothing you are about to read will change at all no matter what Congress and the President finally agree to do in the never-ending circus of health care reform. A stratified system where privilege rules, and others wait, stays in place, unscathed. Primary doctors will not increase, nor will preventive care, nor will government assistance as envisioned by President Obama make a meaningful difference in the lives of anyone. Most doctors want nothing to do with Medicaid patients—indigent or otherwise. You see, in the end, doctors decide who they see.

They see dollars, lots of them. Take the example of the nation’s nephrologists – kidney specialists – who have made millions of dollars on patients in an on-going scandal of profiteering, ethical lapses and outrageous indifference.

In 1973, the US government stepped in on the side of patients suffering from End Stage Renal Disease—that’s when your kidneys stop doing the job. It’s an awful condition, often brought on by hypertension, diabetes and other illnesses related to the preventable stress and strain of modern living. Loss of kidney function occurs predominantly among poor, urban populations. The only way to stay alive, short of getting a new kidney, for which there are long waiting lists, is to go on kidney dialysis, a cumbersome process whereby a patient goes to clinic three times a week for 3-4 hours per session and has his blood cleaned mechanically.

Medicare picks up the tab for this life-saving process. In 2007, the government spent $8.6 billion for dialysis and with projections of kidney failure going up, patients on dialysis are expected to reach 400,000 in the next few years, money spent – and made – in this field is enormous and growing.

Health care is a profit center and it didn’t take a Harvard MBA – actually, a number of Harvard MBA’s did in fact run this scheme– very long to see the potential. Health entrepreneurs began approaching nephrologists across the country in the 1980s with offers to purchase their practices and many doctors happily agreed. With practices of 70-100 patients per doctor and Wall Street setting a price of about $70,000 per patient, nephrologists got checks in the $5 to $7 million dollar range. For what, exactly? For promising to send their patients to clinics now owned by for-profit clinic systems. And that wasn’t the end of it. Doctors also got directorships and other consulting deals for handing over their patients. Doctors just needed to agree to the protocols of the corporate dialysis company – the standing orders governing dialysis procedures and drugs. Remember, nothing in medicine gets done without a doctor’s prescription, so there needs to be enduring cooperation between the dialysis corporation and the MD.

As more and more nephrology practices were bought up, two players came to dominate the field—the DaVita Corporation, a Fortune 500 company based in Denver, and Fresenius Corporation, headquartered in Hamburg, Germany. Today, these two companies control more than 70 percent of the US dialysis market, making billions of dollars annually. The CEO of DaVita has banked hundreds of millions in bonus money. “We created this giant money machine that made a lot of nephrologists and entrepreneurs rich,” economist Stuart Altman told USA Today last month.

Making rich is doing right by shareholders, and nice for the nephrologists who sold their patients, but the reality is that dialysis in the US is the worst in the industrial world, with the highest death rates (21% of patients die each year, which means a dialysis patient lives five years on average) lowest quality and highest expense around. Across the board, from the hiring of unskilled technicians, re-use of equipment including the key dialyzer component, poor needle and other supply quality, machine repair, cleanliness, water preparation…. the for-profits brought the standards down. Patients who complain are summarily ejected from clinics, only to have Medicare cower when patients look to them for help.

Some doctors, actually just a relative few, backed out of the deals made to sell patients to the for profits, as they took offense at the substitution of their medical instructions for those of the corporation. Suits were filed, settled and sealed. Ah, American justice—not a peep.

And there is of course the pharmaceutical angle. One drug, epogen, a hormone that stimulates red-blood cell growth, has earned the Amgen Corporation billions of dollars since it was released in 1989. It is very expensive and very much in use in the dialysis field, where accusations of overuse are being investigated. No other industrial country uses such large dosages of epogen on its dialysis patients due to expense and concerns that too much can actually harm the dialysis patient. Epogen is the single largest drug cost for Medicare.

The only way to make sense of the US health care system, and to fashion some measure of meaningful reform, is to unravel the patient as profit center. Too bad the Administration didn’t get it right from the start.

Carl Ginsburg is a tv producer and journalist based in New York. He can be reached at carlginsburg@gmail.com

http://www.counterpunch.org/ginsburg09112009.html

2

Interesting, Plugger; I hadn’t seen this one. The journalist failed to note several things, however:
– When dialysis was originally paid for by the Federal government (by creating a 3rd doorway into Medicare called the “Medicare ESRD Program”) it was because Congress had been told that with dialysis, people would be active, productive, tax-paying citizens. And that may well have been true of the carefully selected early group who made it through the “Life-and-Death Committees” to get dialysis. But once Medicare started to pay, the doors were opened to nearly all comers, and that changed the population significantly. So, the idea was always that dialysis would have a spending offset from taxes and productivity–but instead, the way we deliver treatment today, even folks who are of working-age (about half) find it nearly impossible to work. This means we not only lose the offset, but also incur billions of dollars in disability payments.

– The Feds caught on fairly quickly that dialysis was becoming a boondoggle, and by 1984 changed the payment structure from fee-for-service (i.e., “get rich quick”) to a Composite Rate for each treatment. This payment was set at ~$135–and basically hasn’t changed since, which means that today it’s worth in the neighborhood of $20 (adjusting for inflation), and clinics that have Medicare-only patients LOSE money on each treatment.

– Since Medicare doesn’t pay the full freight for people on dialysis, clinics make up their losses by trying to improve their “payer mix”–the % of people who have employer group health plans (EGHPs) when they start treatment. EGHPs are required to pay first (for 30-33 mo.) and they tend to pay quite a bit more than Medicare does.

– Keeping people on dialysis healthy enough and feeling good enough to be working and insured with an EGHP is then a win-win. Clinics make enough money to stay open and people get to have those active, productive, tax-paying lives that Congress was promised when they agreed to pay for dialysis in the first place. THIS is why the large dialysis providers are big supporters of home therapies. Sure, they like to see people feeling their best, and it gives them great PR, but they also are able to stay in business, keep ALL of their patients alive, and–since much of healthcare is for-profit (for better or worse)–pay their shareholders and their CEOs.

3

thank you for pointing out some of the problems with government run healthcare in your response to plugger_ who relays the opinion of a tv producer/former air america exec.

“This payment was set at ~$135–and basically hasn’t changed since, which means that today it’s worth in the neighborhood of $20 (adjusting for inflation), and clinics that have Medicare-only patients LOSE money on each treatment.”

The bright bulbs in the Econometric section of CMS has done this (doesn’t sound sustainable to me)

Yes, and those evil insurance companies to the rescue:

“Since Medicare doesn’t pay the full freight for people on dialysis, clinics make up their losses by trying to improve their “payer mix”–the % of people who have employer group health plans (EGHPs) when they start treatment. EGHPs are required to pay first (for 30-33 mo.) and they tend to pay quite a bit more than Medicare does.”

(I know, get rid of insurance companies)

Oops, this almost makes it sound like the EGHP are brighter than CMS:

"Keeping people on dialysis healthy enough and feeling good enough to be working and insured with an EGHP is then a win-win. Clinics make enough money to stay open and people get to have those active, productive, tax-paying lives that Congress was promised when they agreed to pay for dialysis in the first place. THIS is why the large dialysis providers are big supporters of home therapies. Sure, they like to see people feeling their best, and it gives them great PR, but they also are able to stay in business, keep ALL of their patients alive, and–since much of healthcare is for-profit (for better or worse)–pay their shareholders and their CEOs. "

Surely that can’t be true…I mean it’s only been 8 years since Jim McDermott introduced his daily hemo bill. But, I know, let’s turn all healthcare over to the government, then we will be secure.

4

Congress goofed with the Medicare ESRD Program, because it was the first single-disease entitlement: they forgot to include an annual cost-of-living adjustment. With so many other calls on Medicare dollars (hospitals, nursing homes, etc.) and not enough money allocated, dialysis has been short-changed. That doesn’t meant that the system of government payment itself is the problem, just that it hasn’t been fixed. The new MIPPA law is supposed to fix this–we’ll all see how well that works.

Insurance, however, is the problem–NOT the solution–to U.S. healthcare, IMHO. Not that it matters: there is no plan on the table for U.S. healthcare reform that would either get rid of health insurance companies or offer government-paid care (single payer). So, it’s a moot point.

5

Carl Ginsburg has been one of the staunchest friends of DialysisEthics over the years, so I thought you might like to know a little more about him:

“For 25 years, Carl Ginsburg has reported on and advocated in behalf of injured individuals and groups. As a producer at NBC and subsequently CBS News in the 1980s and 90s he covered courts, government agencies and business. Later, his investigative work took special aim at the healthcare sector. A Carter Center Fellowship in mental health affairs allowed Carl to firmly set his focus on healthcare matters nationwide and his published works have appeared in The Nation magazine and aired on network and cable TV programs. Carl also taught journalism to graduate students at New York University’s School of Journalism and at Hunter College. He has lectured in the United States and abroad on methods of investigation, legal harm and the political economy of healthcare.
In the late 1990s, Carl began a collaboration with Howard Pierce, a Tyler Cooper partner, to develop methods of investigating healthcare abuse, with particular emphasis on witness development. In this capacity he has traveled throughout the United States seeking the participation of first-hand observers to abuse and fraud in the healthcare system. Carl is a graduate of Northeastern University School of Law and Columbia University.”

P.S. The guest ought to check into how “terrible” government intrusion is affecting dialysis and health care in other countries: Japan, France, etc…

6

He sounds like a great friend to have, Plugger! It can be a huge help to have someone with media influence who is willing to get up to speed on the complexities of dialysis and tell the stories that need to be told.