Blood money

...Not only were kidney patients guaranteed availability of dialysis and payment of treatment, but for the first time the Government would pay the costs of treating a specific disease through Medicare, regardless of the income level of the patient...

...We hope the lessons learned from this small but effective renal program will be applied to other areas of health care...

...About 80 per cent of these funds come from Medicare, while the remaining 20 per cent come from insurance companies and other miscellaneous sources...

...Incentives do exist that promote dialysis mills, assembly lines that are interested in producing as many dialyses as possible at the lowest possible cost and highest possible profit...

...In order to halt this threat NMC hired John Sears, former campaign manager for Ronald Reagan, to lead a lobbying effort against home dialysis...

...The Wall Street Transcript, a journal of financial analysis, refers to the growth of home dialysis as one of "two possible negative developments which could cloud the future outlook" for NMC stockholders...

...The first three points are at variance with virtually every professional study...

...Many kidney specialists desiring their own clinics join National, getting from National what is, in effect, a franchise for certain areas...

...Their lives literally depend on doctors, technicians, and machines...

...Pioneer nephrologist (kidney specialist) Belding Scribner voiced concern about the program in testimony before the House Ways and Means Committee: "What started out in 1960 as a noble experiment gradually has degenerated into a highly controversial billion-dollar program riddled with Beth Baker of Takoma Park, Maryland, is a former dialysis technician and a free-lance writer...

...So these kinds of things are de-emphasized or not done at all...

...As for the profit-making centers being the cheapest way to provide dialysis, Blagg has responded, "One could comment that, if National Medical Care is as serious about saving the taxpayers' dollar as they claim to be, they could reduce the charge for their services and still make an appreciable profit...

...As Dr...

...Total assets in 1978 reached $141 million, with after-tax net income rising 31 per cent in 1979 to more than $19 million...

...While the unending, thrice-weekly treatments are grim for these patients, they translate into bullish reports from Wall Street for the baron of the dialysis trade, NMC...

...Stepping in to help meet the challenge of providing thousands of renal patients with life itself, the dialysis company quickly grew to be the largest of its kind in the world...

...Yet even now the ESRD program is being discussed more and more as the prototype for a national health plan...

...In contrast, time and again we found that once patients were trained and established at home, they not only Tost their fear of the procedure, but could not believe that they had resisted home care for so long...

...NMC is indeed a stockholder's dream...

...Blood money A 'noble experiment' turns a profit on the pain of kidney patients Beth Baker and Stuart Kaufer They were called, simply enough, "death boards," and for the first dozen years after renal dialysis—blood purification—became technically possible for the thousands of Americans with kidney failure, the death boards decided who would have access to the limited number of machines...

...Other responsibilities—family, school, or job—are often abandoned, edged out by the time-consuming and painful process of dialysis, which produces vomiting, cramps, and fainting spells...

...The fundamental question of quality of life—the socio-psychological aspects of kidney disease—seems to have no place at NMC...

...Late one evening, when power failed, patients had to be taken off the machines manually, by the light of cigarette lighters and one battery-operated television set...

...Dialysis can be made to fit into their schedules instead of the other way around...

...And funds for research into the prevention of kidney disease have shrunk while millions are being poured into the running of private dialysis centers...

...Instead, they had to return the next day for an extra dialysis—if they were lucky enough to find an empty machine— which conveniently resulted in an additional charge for the extra treatment...

...Scribner, who has been called the father of dialysis, is credited with making the treatment possible on a mass scale by developing the "Scribner shunt," which surgically strengthens a blood vessel to tolerate repeated needle insertions...

...These kinds of dialysis service companies have as much concern for the happiness and well-being of their customers as General Motors has for its customers...

...Under the present system, the physician-owners of profit-making centers are able to stack the review boards that set policy and regulate the quality of patient care...

...NMC operates through a franchise set-up, with individual nephrologists receiving both a fee for their services and profits from the flat fees charged each patient for each dialysis...

...With the enactment of the ESRD program in 1972, NMC doctors were the first to realize that here was a field for investment with a guaranteed return and the solid promise of continued growth...

...Home patients had to pay for their own supplies, for some of the plumbing costs, and for the first three months of their treatment...

...When Congress initiated the ESRD program, the cost was estimated at $250 million a year, but by 1978 it had skyrocketed to $722 million...

...A survey of the networks around the country reveals a similar pattern: Areas where NMC prevails have a very low percentage of patients on home dialysis...

...At the Northwest Kidney Center, more than half the patients are on home dialysis...

...Far from being a model for the national health programs of the future, the NMC case serves to show how greatly we need a program controlled by public, not private, interests...

...There is no economic incentive to spend money on patient education...

...Three times a week for five hours at a time, they will sit in one position while their blood is removed through a needle the size of pencil lead, circulated through a device resembling a washing machine, and returned through another painfully large needle...

...that home dialysis is riskier than center dialysis, with a higher mortality rate, and that health care should stay in the confines of profit-making institutions...

...But to those critical of the program, the wedding of the Government funding and policy to franchise profitmaking corporations leaves much to be desired...

...One of the firm's favorite articles, reprinted and distributed to employes across the country, is entitled, "The Delivery of Dialysis Services on a Nationwide Basis—Can We Afford the Non-profit System...

...Belding Scribner and Christopher Blagg of the Northwest Kidney Center in Seattle...

...Only recently, the number of home patients has made a slow climb to 12 per cent...

...What with the Congressional mandate and the Federal money, the rapid growth of physician-owned NMC was no accident...

...NMC claims: "Without a free market approach, many years passed between the technologic and medical breakthroughs of dialysis and transplantation on the one hand, and their near universal application to the great numbers of patients dying of end-stage kidney failure on the other...

...f In one unit, a supervisor announced at a staff meeting that there was to be no conversation with the patients during the initiation of dialysis, since this only slowed down "production...

...In Washington, D.C., for example, the head of the network is also co-director of the Bio-Medical Applications subsidiary of NMC...

...One way to keep costs down is for patients to dialyze themselves at home...

...Eugene Shupak, then president of NMC, told Congress in testimony on the proposal, "The enactment of this legislation threatens the very existence of proprietary facilities...

...In addition, the fundamental issues of the quality of the patients' lives are often ignored in the rush to keep costs down and profits up...

...The patients have no voice, and very few options...

...But the problem with home dialysis is that the patient is removed from the marketplace of dialysis delivery...

...Patients requiring five or six hours of treatment instead of the ritual four-and-a-half could not stay on the machine, since another shift would be waiting in line to take their places...

...Incentives do exist that foster perfunctory care...

...Meanwhile, doctors in Seattle initiated dialysis in their own way by raising enough money to pay for dialysis for every single kidney patient in town—all before the passage of the ESRD program and without turning a profit...

...for Congress, they must contain costs, and for patients, they must provide high-quality care...

...Of the 36,400 dialysis patients covered by ESRD in 1979, more than 8,000 were treated at NMC centers...

...The reasons for the decline are many, some medically sound and others highly questionable...

...As the NMC physicians point out, "The objective evidence is overwhelming in establishing the incentive-based proprietary sector as the key economic factor in the success of the ESRD program...

...Although home patients must still rely on the machine to survive, they become responsible for their own care...

...The conflict was summed up well by dialysis patient Mark Fischer of Boston in NAPHT News, a magazine for kidney patients: "The procedures that are developed at profit-making centers often tend to favor the company, rather than the patient...

...It is, paradoxically, against the economic interests of many ESRD nephrologists to prevent or cure kidney disease...

...1 Elsewhere, workers' shifts were stretched from ten hours a day to twelve, with no pay increase...

...This strategy succeeded and the proposed quota was dropped from the bill...

...The rest were treated at non-profit, Government, smaller private facilities, or at home...

...Thus, in all crucial areas—survival, quality of life, and program costs— home dialysis stacks up equal or superior to facility dialysis...

...You bet it is...

...What's exciting here is not only National's growth, but the fact that this growth is not dependent on the course of the economy...

...On one side is NMC, almost alone in its vocal opposition to home treatment...

...In earnings and sales growth National Medical Care has one of the most impressive records among New York Stock Exchange companies...

...And questions already have been raised about the quality of care in the NMC centers themselves...

...f One center operated for almost two years with no emergency back-up generator...

...On the other are those advocating an increase in home dialysis, led by Drs...

...Bio-Medical Applications' hold on the D.C...

...These include Pennsylvania, California, Louisiana, Florida, Puerto Rico, and parts of New England...

...The firm also has set up seventy laboratories to service its dialysis centers and has merged with Erika, Inc., a major supplier of dialysis equipment...

...Last year, the company announced plans to acquire 25 per cent more dialysis machines and take on an even greater share of the market...

...While these inequities discouraged many at first, they were corrected in legislation passed in 1978...

...Moreover, the life expectancy of the group of patients who do shift is predicted to be similar to what it would have been if there had been no shift from facility dialysis...

...In addition to showing the lower costs of home dialysis, their study shows a slightly improved rate of survival for home patients...

...It concludes: "The foregoing results indicate clearly that public policies that encourage patients who are willing and able to shift from facility to home dialysis have the potential to save taxpayers millions of dollars annually...

...Only NMC holds this view...

...Therefore, it was suggested during hearings on revisions to the ESRD bill in 1977 that a quota be set for the number of patients on home dialysis...

...cost overruns and enormous profiteering...

...Because the companies decide for themselves how they choose to do business...

...The following examples from various centers in Washington, D.C., reveal an assembly line approach to dialysis: 1[ Patients were found going on and off dialysis in continuous shifts, strictly scheduled with little room for individual needs...

...The other is the decline in the "NMC dialysis treatment service market," a euphemism for dying kidney patients...

...NMC), saw the renal disease program as a chance to mushroom into a multi-million-dollar enterprise, with dozens of physician-owned franchise-type centers across the country...

...Finally, the proliferation of NMC centers, whose physicians have a direct economic interest in keeping their units filled, may have actually steered thousands of patients away from home dialysis...

...According to the Government, there are no demographic reasons for the discrepancy...

...Conveniently for NMC, many of the local networks are controlled by the physicians who own the franchises for NMC facilities...

...One corporation in particular, National Medical Care, Inc...

...These patients may have a more difficult time with home treatment...

...The attempt at cutting costs disrupted the lives of both the staff and the patients, particularly those who worked...

...Stuart Kauf er is a dialysis technician in Takoma Park...

...The provision would have required that one-half of the patients with renal disease be on home dialysis, unless sufficient evidence indicated this to be an improper form of treatment...

...To a Congress alarmed over the rising costs, home dialysis offers a relatively cheap and available alternative...

...As such, it bears close scrutiny...

...Supporters of the present profit-motive delivery system see the ESRD program as the best example of how the Federal Government can effectively fund health care...

...There is no economic incentive to deliver individualized care...

...While NMC takes credit for initially providing kidney patients with dialysis, this came only after a hefty profit \vas ensured through the ESRD legislation and the acceptance of dialysis treatments by insurance companies...

...The most authoritative independent study of the cost and survival rates of home and facility dialysis was performed by Drs...

...And, from its position of power, that corporation is now fighting for the perpetuation of a treatment system that only compounds the problems of the kidney patient...

...One patient threatened to sue just to receive his full dialysis time, since the new schedule was forcing him to choose between his work and treatment...

...And in Washington, only 3 per cent of the patients are on home dialysis, compared to a national average of 12 per cent...

...In fact, it was not the "free market approach" that saved kidney patients, but the American taxpayer, who took on what is now almost a $1 billion per year obligation...

...Their records show that, given the proper training and moral support from the medical team, most kidney patients do well at home, and in many ways better than their counterparts in a facility...

...Hours of treatment can be more flexible...

...For one thing, the population under treatment includes many more elderly and more severely afflicted patients than in the early days of dialysis...

...Ouestions of conflict-of-interest may legitimately be put to NMC physicians who treat so few of their patients at home...

...This is because home dialysis combats the extreme psychological dependence the average kidney patient develops on the machine and the medical staff...

...Only about 10 per cent of those will have a kidney transplant— the others will be on dialysis for the rest of their lives...

...Instead, the thirty-two networks responsible for monitoring treatment and setting policy at the local level were advised to set goals for home dialysis and encourage its implementation as they saw fit...

...The Rand Corporation last year completed a Federally financed study of "the ESRD implementation experience for prospective national health insurance programs," but the results have not yet been made public...

...Despite these benefits, home dialysis declined from a high of 40 per cent in the early 1970s, to less than 10 per cent in just five years...

...According to the most recent ESRD statistics, dialysis in a facility costs $22,000 per year, while home dialysis costs $21,360 the first year (for installation of the machine, plumbing, and so forth), but only $11,837 each year thereafter...

...The debate over home versus facility dialysis has been raging ever since the Government began funding the program, and it continues today...

...Forbes magazine reports: "An intriguing opportunity...

...Scribner has noted, "In-center dialysis tends to make patients fearful of the procedure because they don't really understand how to cope with the inherent risks of dialysis and must depend on others to do this for them...

...There is little doubt that the stockholders' concern over the rise of home dialysis carries over into the day-to-day decisions of NMC physicians—especially since the stockholders and the physicians are often the same people...

...that profit-making dialysis centers are the cheapest, most efficient method of maintaining kidney patients...

...Out of fourteen centers in the metropolitan area, eleven are part of the NMC chain...

...There are no statistics to support the contention that home dialysis patients die sooner...

...Paul V. Stange and Andrew T. Sumner and published in the New England Journal of Medicine in February 1978...

...In addition, the original ESRD legislation made it cheaper for the individual to go on dialysis in a center even though the overall program costs were, lower at home...

...What began as one dialysis center in Boston in the late 1960s has developed into a giant in the health field, with 114 dialysis centers across the United States and Puerto Rico, in addition to recent expansion into the fields of obesity control, mental health, and nursing home care...

...Congress was told it had no right to legislate such matters and that it was interfering in the relationship between patient and physician...

...dialysis market is so strong that another group of physicians brought an unsuccessful suit against the company for operating a monopoly...

...It argues that without profit-making centers, dialysis patients would never have been able to receive treatment...

...The physicians are thus responsible to three groups: For the NMC stockholders, they must turn a profit...

...Every year, some 12,000 Americans discover they have chronic renal (kidney) failure...

...Then, on a Saturday morning in September 1972, Congress voted to make dialysis a right guaranteed to all, virtually free of charge...

...Those not chosen faced certain death, usually in a matter of weeks...

...New portable machines offer eyen more mobility and independence...

...It was a landmark decision...

...The End Stage Renal Disease (ESRD) program that came into being eight years ago sets a precedent for the type of national health service Congress may one day enact: a service in which public funds pay for private care...

...It has often proved difficult to satisfy all three...

...It has been projected that by 1983 the program will cost close to $2 billion...