Heh heh heh. There are two main sources of revenue for dialysis companies: Medicare and employer group health plans (EGHPs). Medicare has traditionally paid so little that folks who have Medicare only (with no Medigap, Medicaid, or private policy to pay the balance) actually cost clinics $5-10/treatment more than they were paid.
So, they went to the cash cow: EGHPs. Each clinic has what they call “payer mix”–the “mix” of patients who have EGHPs vs. Medicare. When Renal Care Group (RCG) was bought by Fresenius a few years back, the price was based on their superior payer mix–which was based at least in part on RCG providing better care so more people could keep their jobs–and their EGHPs. EGHPs can be billed at a higher rate than Medicare. One reason that large dialysis providers are so hot on home dialysis (contrary to many people’s beliefs that they are barriers to it) is that folks who get good treatments really ARE more likely to keep their jobs & EGHPs. So, home treatments are a win-win for dialyzors and providers. We pointed this out to them when we started this site. That’s part of the reason they support our work!
At this point, most of the insurance companies have caught on. Dialysis is on their radar screen–dialysis and cancer are the two most costly illnesses. They make arrangements with networks of dialysis providers and negotiate a rate that is higher than Medicare pays–but quite a bit less than $80/K mo. Also, clinics don’t necessarily get what they charge…
Having Medicare to pay for dialysis really is a huge plus. Back in the 1960s when dialysis first started in the US (in Seattle), it was very costly and insurance companies considered it “experimental” and wouldn’t pay for it. The government set up a number of pilot sites to do dialysis and study the results. These sites were small and funding was limited, so not everyone whose kidneys failed could get dialysis. There were “Life and Death committees” made up of citizens and clergy who would review the medical files of prospective candidates and decide whether they would get the live-saving treatment and live–or not. This was an extremely uncomfortable situation for Americans, who do NOT like healthcare rationing. Congress took up the question of dialysis. Clyde Shields dialyzed on the floor of Congress. Senator Vance Hartke famously said, "60% of those on dialysis can return to work but require retraining, and most of the remaining 40% require no retraining whatsoever. These are people who can be active and productive, but only if they have the life-saving treatment they need so badly.” Based on this promise of active, tax-paying citizens, Medicare was extended to people with ESRD.
Beth makes an excellent point about not using up your lifetime insurance benefit. It doesn’t take much dialysis at commercial rates to do that. Having Medicare protects your ability to have a transplant in the future, or other healthcare.