Financial Ties, Market Structure, Commercial Prices, and Medical Director Compensation in the US Dialysis Industry: 2005 - 2019

With Xuyang Xia, Wanrong Deng, Paul Eliason, Ryan McDevitt, Jimmy Roberts, and Heather Wong
Under review
BibTeX citation available here.

Key Points:

Question: How did facility ownership in the US dialysis industry evolve between 2005 and 2019 and what is its association with commercial prices and medical director compensation?

Findings: Between 2005 and 2019, the US dialysis industry consolidated both horizontally and vertically. The share of facilities operated by the two largest dialysis chains, DaVita and Fresenius, increased from 47.16% to 70.37% and the share with a physician owner increased from 9.74% to 27.16%. During this period, markets with only one large chain had 528 dollar (95% CI, 417 to 639) higher commercial prices for outpatient hemodialysis and 290 dollar (95% CI, 190 to 391) higher medical director compensation per patient than markets that did not have large chain facilities.

Meaning: Using a novel data set of Medicare claims, cost reports, commercial prices, and facility owners, this study highlights the growing consolidation in the US dialysis industry, both horizontally and vertically, and its correlation with higher commercial prices for outpatient hemodialysis and compensation for medical directors.