For-Profit Dialysis Facilities Have Higher Mortality Rates and Lower Transplant Referral Rates Than Not-For-Profit Facilities

Researchers at the Johns Hopkins School of Public Health have found that, on average, patients treated in freestanding for-profit dialysis centers experience poorer survival rates and are less likely to be placed on the transplant waiting list than those who are managed in not-for-profit facilities. The study appeared in the November 25, 1999 issue of The New England Journal of Medicine.

"Our results raise serious concern that provider decision-making may differ within for-profit and not-for-profit organizations, and that the care of patients with end-stage renal disease may be compromised in for-profit dialysis centers, particularly in localities where not-for-profit facilities are absent," said senior author Neil R. Powe, MD, MPH, MBA, professor, Epidemiology and Health Policy and Management, Johns Hopkins School of Public Health; and Medicine, Johns Hopkins School of Medicine.

The authors said that the negative effects seen in for-profit facilities may be due to a greater emphasis on income-generation in those facilities, raising concerns about the current system of payment for dialysis services, which rewards facility efforts to control costs and maintain patient volume but which does not build in incentives to maximize clinical outcomes.

In 1997, 68 percent of dialysis patients were treated in freestanding for-profit units, up from 53 percent in 1990. Medicare pays dialysis facilities a fixed payment per dialysis treatment, a sum that has not increased since 1973. Lead author Pushkal P. Garg, MD, a Robert Wood Johnson Clinical Scholar at the Johns Hopkins School of Medicine at the time of the study, said, "Attempts by dialysis providers to maintain income -- in the face of Medicare reimbursements that are shrinking with inflation -- may lead to cost-cutting that compromises the quality of care."

To assess the impact of facility ownership on patient outcomes, the scientists studied a group of 3,569 patients with new-onset end-stage renal disease (ESRD) who were nationally-representative with regard to age, gender, race, and primary cause of ESRD. National data for the patients and the sites in which they were treated were obtained from medical and administrative records. In order to tease out the impact, if any, of the treating facility on patient survival and access to the transplant waiting list, the researchers adjusted their statistical analysis for age at onset of ESRD, household income, race, gender, education, employment status in first year of ESRD, marital status, primary cause and onset date of ESRD, and geographic region. Besides looking at these demographic variables, they also evaluated the impact of 14 clinical factors that were assessed at ESRD onset. The patients were followed for up to six years.

The 3,569 patients in the study sample were treated by 950 different dialysis providers in the first year of ESRD. Facilities were categorized either as freestanding, for-profit (For-Profit); freestanding, not-for-profit (Not-For-Profit); or hospital-based. Care was taken to correct for the clustering of results by facility, to make sure that any observed effects were not due to results from just a few of the facilities sampled.

The researchers found that mortality rates were 20 percent higher among patients getting dialysis in freestanding, for-profit facilities compared to those of patients who used not-for-profit centers. Treatment in for-profit centers was also associated with a 26 percent lower likelihood that a patient would be put on the waiting list for a kidney transplant. Facility volume and occupancy, urban location, and distance to a transplant center did not affect survival rates Outcomes in hospital-based centers were similar to those for patients treated in freestanding, not-for-profit facilities.

"Given that approximately 140,000 patients were dialyzed in for-profit centers in 1997, the observed increase in the absolute mortality rate among patients in freestanding, for-profit centers suggests that a considerable number of ESRD deaths may be associated with for-profit treatment," said Dr. Powe. "In addition, we observed that the association between for-profits and poor outcomes was diminished in counties where for-profits operated in proximity to not-for-profit dialysis centers."

The authors cited the results of previous studies, which reveal that for-profit facilities are more likely to provide lower doses of dialysis and reuse dialyzers, practices associated with lower costs but also poorer patient survival. Poorer outcomes could also be attributable to the lower staffing levels seen in for-profit facilities. And lower rates of staffing may mean staff have less time to spend coordinating patients' transplant evaluation process. Finally, it is possible that for-profits may under-refer patients for transplant evaluation in order to maintain patient volumes, and thus income.

The researchers suggested that more rigorous oversight or competing quality controls be put into place to make sure that the cost containment measures of for-profit centers do not jeopardize patient outcomes. In addition, policy makers, when considering converting not-for-profit health care facilities to for-profit facilities, should keep in mind the study's evidence that the presence of a not-for-profit center apparently improves outcomes for patients in nearby for-profit centers.

Other investigators included Kevin Frick, PhD, assistant professor, Health Policy and Management, and Marie Diener-West, PhD, associate professor, Biostatistics, the Johns Hopkins School of Public Health.

This study was supported by the Robert Wood Johnson Foundation Clinical Scholars Program.