SHOULD DIALYSIS COMPANIES BE MAKING RECORD PROFITS?

Part of my daily routine is to peruse articles provided by kidneybuzz.com, a free online service provided by a California-based company that also offers patient-related products for those like me who are on dialysis.

I found this morning’s item quite interesting, even though it was read several hours ahead of sunrise. It centered on a report of earnings for the top two dialysis providers in the United States. The headline posed the question: Should Dialysis Companies Treating Chronic Kidney Disease Patients Be Making Record Profits?

The article cites Los Angeles Times-published info that reads: “The two dominant for-profit dialysis firms, Denver-based Davita and German-owned Fresenius, report pretax operating profits in the billions and margins of 18 percent and 19 percent.” More specifically, in 2017, DaVita earned about $1.8 billion in pretax operating profit of $10.1 billion from Dialysis Patient-Related revenue. Fresenius reported pretax operating profit of $2.3 billion on Dialysis Patient-Related revenue of $11.7 billion for North America.

In my recent book Dialing in on DI-AL-Y-SIS, I offered 2015 revenue figures that showed Fresenius with over $1 billion in after-tax dollars and DaVita’s net patient revenue at $668 million.

The kidneybuzz.com article also notes that as Proposition 8 (an initiative to cap Dialysis Company profits at 15 percent) is set to appear on the California Ballot – and possibly ballots in other states across the country afterward – the earnings of dialysis organizations are being put into the spotlight. Large dialysis organizations have already contributed more than $8 million to oppose Proposition 8, while supporters of the measure have amassed $6 million to push the proposition forward. Still, recent figures released by well-known publications are causing some to pause and evaluate massive earnings as it relates to patient care and whether it is good or bad for chronic kidney disease and dialysis patients.

The article continues:

This has been met with mixed responses from the chronic kidney disease community, with some patients applauding the firms for their great care and terrific business savvy, while other patients do not feel as though they are getting high-quality care and find such earnings to be shocking, since they struggle on a fixed income.

Most of the feedback that kidneybuzz.com gets as it relates to clinics is not that they make profit – in fact, having a profitable business ensures that dialysis can continue to be offered to patients. However, the primary difference is in care. Some patients find that they have exceptional care at dialysis with great service and kind and friendly healthcare professionals. Others believe that their treatments can be improved with more staff, safer facilities, more cutting-edge technology, and better-trained professionals.

It is important to note that DaVita and Fresenius combined operate approximately 4,900 outpatient clinics and serve about 400,000 patients – accounting for roughly 70 percent of all dialysis patients. Hence, the dialysis companies are given an awesome responsibility to keep patients alive, but are they making too much money in relation to the service and resources patients are getting? On the other hand, are the profits simply the rewards of a job well-done for caring for the vulnerable population of dialysis patients?