Skip To Main Content
 
  Figure 11.1 ESRD expenditures, by payer
  Figure 11.2 Costs of the Medicare & ESRD programs
  Figure 11.3 Estimated numbers of point prevalent ESRD patients
  Figure 11.4 Annual percent change in Medicare ESRD spending
  Figure 11.5 Total Medicare dollars spent on ESRD, by type of service
  Figure 11.6 Total Medicare ESRD expenditures, by modality
  Figure 11.7 Total Medicare ESRD expenditures per person per year, by modality
  Figure 11.8 Per person per year (PPPY) inpatient/outpatient & physician/supplier net costs for Medicare & Truven Health MarketScan (EGHP) patients with ESRD
  Figure 11.9 Total per person per year outpatient expenditures, by race
  Figure 11.10 Total Part D net costs, by low income subsidy (LIS) status, 2011
  Figure 11.11 Total per person per year Part D net & out-of pocket costs, by low income subsidy (LIS) status, 2011
  Figure 11.12 Total per person per year Part D costs, by low income subsidy (LIS) status & provider, 2011
  Figure 11.13 Total per person per year (PPPY) Part D costs for phosphate binders, by provider, 2011
  Figure 11.14 Total per person per year (PPPY) Part D costs for cinacalcet, by provider, 2011
  Figure 11.15 Total per person per year (PPPY) Part D costs for antihypertensives, by provider, 2011
  Figure 11.16 Total per person per year (PPPY) Part D costs for diabetes agents, by provider, 2011
View
Download
Chapter (zip)*
Slides (zip)*
*corresponding data in Excel included
Search This Page
Search All
Translate

Chapter 11

Costs of ESRD

Introduction

Total Medicare spending in 2011 rose 5 percent, to $549.1 billion, while ESRD expenditures rose 5.4 percent, to $34.3 billion. Because the USRDS Coordinating Center now receives up-to-date data on Part D use in the ESRD population, these numbers include the new Medicare Part D prescription drug benefit, added in 2006.

These expenditures cover 507,326 patients in the prevalent Medicare ESRD population, along with 108,573 non-Medicare patients; the latter patients cost an additional estimated $14.93 billion (data from Table p.a in the Précis).

Medicare HMO costs for ESRD rose to $3.62 billion in 2011, 6.8 percent higher than in 2010, and accounting for 7.4 percent of total ESRD expenditures based on insurance coverage — the highest proportion in the last 20 years. In the hemodialysis population, total fee-for-service Medicare expenditures per person per year (PPPY) were $87,945 in 2011, 0.28 percent lower than in 2010. For peritoneal dialysis patients, in contrast, PPPY costs rose 6.6 percent, to $71,630.

These year-to-year variations will need more complete assessment — including consideration of cause-specific hospitalizations — to define their exact source. Factors to consider include the introduction in 2011 of the new bundled Prospective Payment System (PPS), the decline (noted in Chapter Three) in overall hospitalization rates, which may contribute to lower hemodialysis patient expenditures, and recent growth in the peritoneal dialysis population. This growth may have changed the overall mix of expenditures, as patients on peritoneal dialysis use more oral medications than those treated with hemodialysis.

Costs differ widely between Medicare and EGHP patients, as illustrated by data from the Truven Health MarketScan (THMS) dataset. While PPPY costs in the Medicare dialysis population reached $60,676 in 2011, those for THMS dialysis patients reached $125,871 — a level 2.1 times greater, and for a population that, on average, is younger than 65. These costs do not cover prescription drugs.

Changes in the use of injectable medications are described in Chapter Ten, on ESRD providers. Expenditures for these medications can no longer be assessed, since ESAs, IV vitamin D, and IV iron are now included in the bundled costs for each dialysis treatment. Changes in use can be determined, however, by looking at reported doses, as dosing data is required on the monthly dialysis claims. In Chapter 10, Figure 10.7, we present data from July of 2010, 2011, and 2012. ESA dosing fell 20.5 percent from 2010 to 2011, and an additional 39 percent in 2012. Dosing of IV iron fell 14.1 percent in the first year, and a further 8 percent in the second. And dosing of IV vitamin D fell 14.3 percent in the first year, while decreasing only 1.4 percent in the second.

These reductions translate directly into savings for dialysis providers, as the IV dosing and expenditures included in the PPS were from 2007. The Government Accountability Office and the Office of the Inspector General recently suggested that CMS rebase the per dialysis treatment PPS bundle payment, and on July 1, 2013, CMS proposed a 12 percent reduction for 2014 payments (http://www.cms.gov/ESRDPayment/PAY/list.asp). The proposed new payment rule may be modified based on adjustments for inflation and on public feedback as to how the cuts might impact various collateral groups across the provider spectrum. CMS has indicated that the reduction may be phased in, allowing providers time to adapt. Amgen recently announced a price increase of 5 percent effective May 24, 2013, increaing costs to providers at the same time that proposed payments are being lowered. The final rule for 2014 payments is expected by the fall of 2013.

We next address use of the Part D Medicare prescription drug benefit in ESRD patients, looking at total expenditures and out-of-pocket costs by low income subsidy (LIS) status. Compared to those of non-LIS patients, medication costs PPPY for patients with the LIS are three times greater. Out-of-pocket costs for non-LIS patients, in contrast, are eight times higher, at $1,091 versus $135.

It is anticipated that phosphate binders will be added to the dialysis PPS bundle by 2016. Data on differences in medication use across providers show that, in 2011, DaVita had the highest expenditures for calcium acetate, sevelamer, lanthanum, and cinacalcet. These costs will be followed in subsequent ADRs to determine effects of the expanded bundled payment.

Figure 11.1 ESRD expenditures, by payer

Figure 11.1. Period prevalent ESRD patients. Includes Part D.

overall & per person per year costs of ESRD

Figure 11.2 Costs of the Medicare & ESRD programs

Total Medicare costs rose 5 percent in 2011, to $549 billion; costs for ESRD increased 5.4 percent, to $34.3 billion, accounting for 6.3 percent of the Medicare budget. • Figure 11.2. Costs (inflated by 2 percent) include estimated costs for HMO & organ acquisition.

Figure 11.3 Estimated numbers of point prevalent ESRD patients

The estimated number of point prevalent Medicare ESRD patients grew to 507,326 in 2011, while the non-Medicare ESRD population rose 5.3 percent, to 108,573. • Figure 11.3. December 31 point prevalent ESRD patients (11.3).

Figure 11.4 Annual percent change in Medicare ESRD spending

Total Medicare costs for ESRD patients increased 3.3 percent between 2010 and 2011, compared to a 0.6 percent increase in costs per person per year. This growth was lower than that seen in 2010, at 6.9 and 2.3 percent, respectively. • Figure 11.4. Total Medicare ESRD costs from claims data; includes all Medicare as primary payer claims as well as amounts paid by Medicare as secondary payer..

Figure 11.5 Total Medicare dollars spent on ESRD, by type of service

In 2010, 38 percent of Medicare’s ESRD dollars were spent on inpatient services, 35 percent on outpatient care, 19 percent on physician/supplier costs, and 7.8 percent on Part D prescription drugs. Part D costs for ESRD patients reached $2.16 billion in 2011, 12.5 percent higher than in the previous year. • Figure 11.5. Total Medicare ESRD costs from claims data; includes all Medicare as primary payer claims as well as amounts paid by Medicare as secondary payer.

Figure 11.6 Total Medicare ESRD expenditures, by modality

Total Medicare expenditures for peritoneal dialysis rose 14.7 percent in 2011, compared to increases of 2.5 and 2.1 percent for hemodialysis and transplant, respectively. Costs reached $24.3 billion for hemodialysis, and $1.5 and $2.9 billion for peritoneal dialysis and transplant. • Figure 11.6. Period prevalent ESRD patients.

Figure 11.7 Total Medicare ESRD expenditures per person per year, by modality

Per person per year Medicare ESRD costs for hemodialysis and transplant fell 0.3 and 0.5 percent, respectively, to $87,945 and $32,922 in 2011, compared to a rise of 6.6 percent in peritoneal dialysis patients, to $71,630. • Figure 11.7. Period prevalent ESRD patients; patients with Medicare as secondary payer are excluded.

Figure 11.8 Per person per year (PPPY) inpatient/outpatient & physician/supplier net costs for Medicare & Truven Health MarketScan (EGHP) patients with ESRD

Inpatient/outpatient costs per person per year (PPPY) for Truven MarketScan (THMS) patients with a transplant during 2011 rose 5.7 percent from the previous year, to $158,138 — 58 percent more than the $99,826 incurred by their Medicare counterparts, for whom costs rose just 1.0 percent. Costs for THMS patients with a functioning transplant in 2011 were 2 percent higher than in 2010, at $35,018 — 2.9 times higher than the $12,019 reported for Medicare patients.

In 2011, physician/supplier PPPY costs for patients with a transplant during the year fell 3.1 percent for THMS patients, to $17,798; costs for their Medicare counterparts fell 6.5 percent, to $17,145. • Figure 11.8. Period prevalent Medicare ESRD patients; period prevalent Truven Health MarketScan ESRD patients age 64 & younger.

Figure 11.9 Total per person per year outpatient expenditures, by race

Total per person per year outpatient expenditures in the prevalent dialysis population do not vary widely by race. In 2011, costs were $31,779 for white patients, $31,686 for blacks/African Americans, and $32,340 for patients of other races. • Figure 11.9. Period prevalent dialysis patients.

part d costs by low income subsidy & provider

Figure 11.10 Total Part D net costs, by low income subsidy (LIS) status, 2011

In 2011, total Part D net costs were $63 billion in the general Medicare population, and reached $2.0 billion, $1.7 billion, and $323 million in the ESRD, dialysis, and transplant populations. Costs for general Medicare patients with the low income subsidy (LIS) totaled $43.6 billion, compared to $19.6 billion in non-LIS patients. • Figure 11.10. Part D-enrolled general Medicare patients from the 5 percent sample & period prevalent dialysis & transplant patients, 2011.

Figure 11.11 Total per person per year Part D net & out-of pocket costs, by low income subsidy (LIS) status, 2011

Among dialysis and transplant patients with the LIS, net per person per year Part D costs in 2011 were $8,003 and $6,459, respectively, compared to costs of $4,194 in the general Medicare population. In patients with no LIS, Part D costs were noticeably lower, at $2,302 for dialysis patients, $2,105 for transplant patients,, and $1,043 in the general population.

Out-of-pocket Part D costs for patients with the LIS are a fraction of those realized by non-LIS patients, at $105 and $590, respectively, for general Medicare patients, and $119 versus $1,106 for patients with ESRD. • Figure 11.11. Part D-enrolled general Medicare patients from the 5 percent sample & period prevalent dialysis & transplant patients, 2011.

Figure 11.12 Total per person per year Part D costs, by low income subsidy (LIS) status & provider, 2011

In 2011, total per person per year (PPPY) Part D costs for LIS patients were highest in facilities owned by DaVita and in those that operated independently, at $9,917 and $8,792, respectively. In patients with no LIS, PPPY costs were similar across all facilities, ranging from $2,218 to $2,525. • Figure 11.12: Part D-enrolled dialysis patients, 2011.

Figure 11.13 Total per person per year (PPPY) Part D costs for phosphate binders, by provider, 2011

Total per person per year (PPPY) Part D costs in 2011 for phospate binders, calcium acetate, sevelamer, and lanthanum were highest in units owned by DaVita, at $233, $2,244, and $418, respectively, and totaling $2,894; costs in hospital-based units, in contrast, totaled $1,665, 42 percent lower than costs incurred by DaVita facilities. • Figure 11.13. Part D-enrolled dialysis patients, 2011.

Figure 11.14 Total per person per year (PPPY) Part D costs for cinacalcet, by provider, 2011

Small dialysis organizations (SDOs) and hospital-based units had the lowest PPPY cinacalcet costs, at $996 and $1,048, respectively, while costs were highest in units owned by DaVita, at $1,618. • Figure 11.14. Part D-enrolled dialysis patients, 2011.

Figure 11.15 Total per person per year (PPPY) Part D costs for antihypertensives, by provider, 2011

Part D PPPY costs for antihypertensives totaled $647 in units owned by DaVita, followed by costs of $601 for independent units, while costs were lowest were in hospital-based units, at $499. • Figure 11.15. Part D-enrolled dialysis patients, 2011.

Figure 11.16 Total per person per year (PPPY) Part D costs for diabetes agents, by provider, 2011

PPPY costs for diabetic agents do not differ widely by facility, and in 2011 ranged from a low of $363 in units owned by DCI to a high of $414 in units owned by DaVita. • Figure 11.16. Part D-enrolled dialysis patients, 2011.