Increasing the Number of Kidney Transplants to Treat End Stage Renal Disease 7 The Cost of Treating End Stage Renal Disease The Federal Government bears most of the cost of paying for ESRD care. In 1972, Medicare eligibility was extended to people with ESRD who needed either dialysis or a transplant. The Medicare ESRD benefits cover all Medicare-covered services for ESRD enrollees, not just those related to kidney failure (CMS 2013). Between 1972 and 2016, the number of covered persons grew from about 10,000 to 511,270. While we primarily discuss the ESRD spending incurred by the Medicare system, the Department of Veterans Affairs and Indian Health Service also cover ESRD treatment. Medicare fee-for-service was the primary payer (including individuals dually eligible for Medicare and Medicaid) for 58 percent and secondary payer for 8 percent of ESRD patients in 2016 (USRDS 2018). While ESRD patients account for less than one percent of Medicare beneficiaries, they account for 7.2 percent of Medicare fee-for-service spending (USRDS 2018). Medicare Advantage covered 15 percent of ESRD patients. About 19 percent of people with ESRD had private, non-Medicare coverage (USRDS 2018). Medicare fee-for-service spending (Parts A, B and D) for patients with ESRD totaled $35.4 billion in 2016 (USRDS 2018). According to USRDS (2018), an additional $79 billion was spent on CKD short of ESRD bringing total Medicare spending on CKD patients in 2016 to over $114 billion or about 23 percent of Medicare fee-for-service spending).9 Medicare accounts for three quarters of annual United States medical spending to treat ESRD (Kirchhoff 2018). Under the 2016 Cures Act, all Medicare eligible ESRD patients will be able to enroll in Medicare Advantage programs starting in 2021. Comparative Costs and Benefits of Different Types of Renal Replacement Therapy The three renal replacement therapy modalities differ in terms of cost, outcomes as measured by survival, quality of life and productivity as measured by employment. One of the starkest differences across the three modalities is cost. In 2016, Medicare ESRD spending per person per year was $90,971 for hemodialysis, $76,177 for peritoneal dialysis and $34,780 for transplants—see Figure 2 (USRDS 2018)—though this cost differential may narrow when controlling for beneficiaries’ health and location. 9 These figures appear to be all medical spending on CKD patients, not simply spending to treat renal disease. While these patients generally have multiple medical problems, the bulk of spending is on treating renal disease, especially in the more advanced stages. CEA • Increasing the Number of Kidney Transplants to Treat End Stage Renal Disease 8 On an annual basis, hemodialysis is 16 percent more expensive than peritoneal dialysis, a finding that generally holds across most developed countries (Just et al. 2008). The primary ongoing costs of hemodialysis are facility space, dialysis machines, and staff. Hemodialysis machines cost about $18,000 to $30,000, last 5–10 years and can treat three to six patients per week. The cost of dialysates used in the machines range from $1,000 to $5,000 per year. Peritoneal dialysis avoids the facility and staff expenses, so the costs of dialysis solutions and sterile tubing are the main costs (Jindal 2009). The machines used in automated peritoneal dialysis add an additional cost of $3,000 to $10,000 for tubing (Jindal 2009). Annual costs for transplantation are less than the annual costs for either mode of dialysis. Most of the costs of transplantation are concentrated in the year of the transplantation and consist of the cost of procuring an organ, transplant surgery and post-operative care. Afterwards, the costs of transplantation include immunosuppressive medications and ongoing medical care, which are far lower than the ongoing costs of dialysis. There is no significant difference in life expectancy between peritoneal dialysis and hemodialysis patients when matched for comorbidities (Shih et al. 2005; Mehrotra et al. 2011; Barone et al. 2014; Jaar et al. 2005; Chang et al. 2016). Mortality is similar between peritoneal dialysis and hemodialysis for elderly patients (Wright and Danziger 2009). Though some studies report that peritoneal dialysis patients have a higher quality of life than hemodialysis patients, many studies (Juergensen et al. 2006; Rubin et al. 2004; Wolcott and Nissenson 1988) find no significant difference between the two modalities for most quality of life measures (Kontodimopoulos and Niakas 2008; Kutner et al. 2005; Wu et al. 2004), particularly in the case of elderly patients (Wright and Danziger 2009). Peritoneal dialysis performed overnight as automated peritoneal dialysis may free up time for work, family and social activities as compared to the more commonly performed continuous ambulatory peritoneal dialysis. However, a review of randomized trials by the Cochrane Review, found no significant advantage for automated peritoneal dialysis in terms of clinically important outcomes like mortality, hospitalizations, abdominal infections and peritoneal dialysis catheter complications (Rabindranath et al. 2007). Hemodialysis Peritoneal dialysis Transplant 20 30 40 50 60 70 80 90 100 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Figure 2. Total Medicare ESRD Expenditures per Person per