Health Care Financing Review

End Stage Renal Disease

End Stage Renal Disease and Medicare
Joel W. Greer, Ph.D.
(.pdf, 353KB)

Since 1972 all persons with end stage renal disease (ESRD) eligible for Social Security are entitled to all Medicare benefits, regardless of age. ESRD patients need continual renal replacement therapy to survive. Although only 1 percent of Medicare beneficiaries suffer from ESRD, they account for roughly 9 percent of all Medicare payments. ESRD patients tend to be economically disadvantaged and belong to ethnic and racial minorities. CMS has developed many programs and regulations specifically for ESRD patients designed to improve care, pay providers fairly, and minimize government expenditures. This issue of the Review contains seven articles reporting findings from policy-relevant research.

Evaluation of the ESRD Managed Care Demonstration Operations
Caitlin Carroll Oppenheimer, M.P.H., Jennifer R. Shapiro, M.P.H., Nancy Beronja, M.S., Dawn M. Dykstra, Daniel S. Gaylin, M.P.A., Philip J. Held, Ph.D., and Robert J. Rubin, M.D.
(.pdf, 432KB)

Individuals with end stage renal disease (ESRD), most of whom are insured by Medicare, are generally prohibited from enrolling in Medicare managed care plans (MCPs). CMS offered ESRD patients the opportunity to participate in an ESRD managed care demonstration mandated by Congress. The demonstration tested whether managed care systems would be of interest to ESRD patients and whether these approaches would be operationally feasible and efficient for treating ESRD patients. This article examines the structure, implementation, and operational out-comes of the three demonstration sites, focusing on: the structure of these managed care programs for ESRD patients, requirements needed to attract and enroll patients, and the challenges of introducing managed care programs in the ESRD arena.

Patient Selection in the ESRD Managed Care Demonstrationt
Jennifer R. Shapiro, M.P.H., Dawn M. Dykstra, Ron Pisoni, M.S., Ph.D., Nancy Beronja, M.S., Daniel S. Gaylin, M.P.A., Caitlin Carroll Oppenheimer, M.P.H., Robert J. Rubin, M.D., and Philip J. Held, Ph.D.
(.pdf, 430KB)

The Centers for Medicare & Medicaid Service's (CMS') end stage renal disease (ESRD) managed care demonstration offered an opportunity to assess patient selection among a chronically ill and inherently costly population. Patient selection refers to the phenomenon whereby those Medicare beneficiaries who choose to enroll or stay in health maintenance organizations (HMOs) are, on average, younger, healthier, and less costly to treat than beneficiaries who remain in the traditional Medicare fee-for-service (FFS) sector. The results presented in this article show that enrollees into the demonstration were generally younger and healthier than a representative group of comparison patients from the same geographic areas. .

Quality of Life and Patient Satisfaction: ESRD Managed Care Demonstration
Trinh B. Pifer, M.P.H., Jennifer L. Bragg-Gresham, M.S., Dawn M. Dykstra, Jennifer R. Shapiro, M.P.H., Caitlin Carroll Oppenheimer, M.P.H., Daniel S. Gaylin, M.P.A., Nancy Beronja, M.S., Robert J. Rubin, M.D., and Philip J. Held, Ph.D.
(.pdf, 404KB)

To study the effects of managed care on dialysis patients, we compared the quality of life and patient satisfaction of patients in a managed care demonstration with three comparison samples: fee-for-service (FFS) patients, managed care patients outside the demonstration, and patients in a separate national study. Managed care patients were less satisfied than FFS patients about access to health care providers, but more satisfied with the financial benefits (copayment coverage, prescription drugs, and nutritional supplements) provided under the demonstration managed care plan (MCP). After 1 year in the demonstration, patients exhibited statistically and clinically significant increases in quality of life scores.

ESRD Managed Care Demonstration: Financial Implications
Dawn M. Dykstra, Nancy Beronja, M.S., Joel Menges, M.P.A., Daniel S. Gaylin, M.P.A., Caitlin Carroll Oppenheimer, M.P.H., Jennifer R. Shapiro, M.P.H., Robert A. Wolfe, Ph.D., Robert J. Rubin, M.D., and Philip J. Held, Ph.D.
(.pdf, 445KB)

In 1996, CMS launched the end stage renal disease (ESRD) managed care demonstration to study the experience of offering managed care to ESRD patients. This article analyzes the financial impact of the demonstration, which sought to assess its economic impact on the Federal Government, the sites, and the ESRD Medicare beneficiaries. Medicare's costs for demonstration enrollees were greater than they would have been if these enrollees had remained in the fee-for-service (FFS) system. This loss was driven by the lower than average predicted Medicare spending given the demonstration patients' conditions. The sites experienced losses or only modest gains, primarily because they provided a larger benefit package than traditional Medicare coverage, including no patient obligations and other benefits, especially prescription drugs. Patient financial benefits were approximately $9,000 annually.

Is Case-Mix Adjustment Necessary for an Expanded Dialysis Bundle?
Richard A. Hirth, Ph.D., Robert A. Wolfe, Ph.D., John R.C. Wheeler, Ph.D., Erik C. Roys, M.A., Philip J. Tedeschi, Ph.D., Alyssa S. Pozniak, and Glenn T. Wright
(.pdf, 395KB)

Congress has required CMS to expand the Medicare outpatient prospective payment system (PPS) for dialysis services to include as many drugs and diagnostic procedures provided to end stage renal disease (ESRD) patients as possible. One important implementation question is whether dialysis facility case mix should be reflected in payment. We use fiscal year (FY) 2000 cost report and patient billing and clinical data to determine the relationship between costs and case mix, as represented by several patient demographic, diagnostic, and clinical characteristics. Results indicate considerable variability in costs and case mix across facilities and a significant and substantial relationship between case mix and facility cost, suggesting case mix payment adjustment may be important.

Improving the Care of ESRD Patients: A Success Story
William M. McClellan, M.D., M.P.H., Diane L. Frankenfield, Dr. P.H., Pamela R. Frederick, M.S.B., Steven D. Helgerson, M.D., M.P.H., Jay B. Wish, M.D., and Jonathan R. Sugarman, M.D., M.P.H.
(.pdf, 449KB)

Medicare's health care quality improvement program (HCQIP) is a national effort to improve beneficiaries' quality of care. The end stage renal disease (ESRD) HCQIP was implemented in 1994 in response to criticism about the poor quality of care received by ESRD patients. Quality improvement efforts initiated by the ESRD Networks and dialysis providers in response to the HCQIP have demonstrated substantial improvement in care for dialysis patients. This article describes the evolution of the ESRD HCQIP and its successful application in the ESRD program.

Potential Organ-Donor Supply and Efficiency of Organ Procurement Organizations
Edward Guadagnoli, Ph.D., Cindy L. Christiansen, Ph.D., and Carol L. Beasley, M.P.P.M.
(.pdf, 408KB)

The authors estimated the supply of organ donors in the U.S. and also according to organ procurement organizations (OPOs). They estimated the number of donors in the U.S. to be 16,796. Estimates of the number of potential donors for each OPO were used to calculate the level of donor efficiency (actual donors as a percent of potential donors). Overall, donor efficiency for OPOs was 35 percent; the majority was between 30- and 40-percent efficient. Although there is room to improve donor efficiency in the U.S., even a substantial improvement will not meet the Nation's demand for organs.

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Measuring Beneficiary Knowledge of the Medicare Program: A Psychometric Analysis
Carla M. Bann, Ph.D., Sherry A. Terrell, Ph.D., Lauren A. McCormack, Ph.D., and Nancy D. Berkman, Ph.D.
(.pdf, 414KB)

Reliable measures of Medicare beneficiaries' program knowledge are necessary for credible program monitoring, evaluation, and public accountability. This study developed and evaluated the psychometric properties of two possible measures of beneficiary knowledge. One measure was based on self-reported knowledge, the other was a true/false quiz which requires beneficiaries to demonstrate their knowledge. We used data from the 1998 and 1999 Medicare Current Beneficiary Survey (MCBS) to evaluate the reliability and construct validity of the indices. Overall, based on both content considerations and the psychometric analyses, the true/false quiz proved to be the more accurate and useful measure of beneficiaries' knowledge.

In the current policy debate, pharmaceutical use in the elderly has been characterized largely by its economic impact, with little discussion of what drugs the elderly are taking. Based on data from the Medicare Current Beneficiary Survey (MCBS), this study defines subgroups of the community-dwelling elderly using health and functional status, and provides a comprehensive description of the composition of prescription drug use in this population. Drugs are classified into 16 primary therapeutic classes, with further breakdown into secondary classes and characterization by chronic versus acute use. Utilization is reported by age and health status categories.

MCBS Highlights

Demographic projections made in the 1980s suggested that the aging of the population would produce a surge in the number of persons needing long-term facility care as we approached the year 2000. Based on the existing stock of nursing home beds, it appeared that there would be a shortage of beds to accommodate these persons. However, this expected large increase in the number of nursing home patients did not materialize. Findings from the National Nursing Home Survey (National Center for Health Statistics, 2003) suggested that elderly use of nursing homes actually declined between 1985 and 1995.

Statements contained in Review abstracts are solely those of the authors and do not express any official opinion or endorsement by the Centers for Medicare and Medicaid Services (CMS).