Can One Executive Order Improve a Struggling Kidney Market?

The Trump administration recently announced a series of policy changes aimed at alleviating inefficiencies in the kidney donation and dialysis markets. The resulting executive order directs agencies to make transplants and home dialysis easier to obtain. If successful, these changes could dramatically improve the quality of life for patients with kidney problems, many of whom suffered from the effects of the poor policies of the past.

Kidney transplant and dialysis policies affect many Americans. According to the National Kidney Foundation, chronic kidney disease is the ninth leading cause of death in the United States--plaguing more than 660,000 Americans. Around 468,000 of those patients are on dialysis, and the remaining 193,000 received a kidney transplant in the past.

Doctors prefer transplants because patients enjoy longer average lifespans and improved quality of life. The problem is that transplants can be hard to obtain.

The number of patients who need a kidney far outstrips the supply of available transplants. As of January of 2016, some 100,800 patients were on the kidney donation waiting list. Unfortunately, only around 17,000 received a kidney transplant in 2014. The rest were forced to turn to dialysis while they continued to wait.

Trump’s executive order aims to increase the supply in two ways. First, the order provides federal funding to ease the financial burden on living donors by expanding reimbursable costs, whether lost wages or child care expenses during recovery. Second, the order also aims to modernize the organ recovery system by reducing the discard rate of organs procured from deceased donors.     

There is another policy reason to prefer transplants: it’s cheaper than dialysis. Results from 2016 show that keeping a patient on dialysis costs Medicare about $89,000 a year, versus $35,000 per transplant patient a year.

Reducing public health expenditures is imperative as more Americans continue to suffer kidney failure. When Richard Nixon signed the Social Security Amendments Act of 1972, which extended Medicare benefits to those with chronic kidney disease, around 10,000 patients were covered. By 2016, that number ballooned to over half a million participants and constituted 7.2 percent of the entire Medicare spending budget.

The dialysis industry has also changed substantially. At its inception, dialysis was predominately performed in hospitals. Today, it’s performed mainly by for-profit entities. The two largest companies make up a combined 70 percent share of the dialysis market and boast more than 3,900 storefronts nationwide.

Dialysis is a hugely profitable industry, raking in over $1.8 billion in profits in 2015. In 2016, dialysis payments accounted for $34 billion of Medicare’s $584 billion budget. Unfortunately, these firms have a reputation of spending taxpayer money haphazardly. In 2015, one company was accused of overcharging Medicare and Medicaid. In the end, the firm settled the case for $450 million.

But even dialysis costs can be lowered. The answer is home dialysis treatments, which cost less than going to a clinic. Right now, home dialysis treatment is “nearly nonexistent”; one leading provider claims that only about 7 percent of patients opt to receive their treatment at home.

The Trump administration would like to change that, aiming for 80 percent of diagnosed kidney failure patients to get at-home treatment or receiving transplants by 2025. To achieve this, the order states that the HHS Secretary shall develop better payment models to encourage greater use of home dialysis.  

But what if we could do away with the need for a human donor altogether? The executive order even takes a sci-fi turn, encouraging innovation in developing an artificial kidney. The Trump administration is directing HHS to consider premarket approval of artificial kidneys and encourage cooperation between the FDA and innovators.

The order will also empower the Kidney Innovation Accelerator (KidneyX)—a project of HHS and the American Society of Nephrology—to issue grants and prizes to innovators who develop better artificial kidney technology, as well as those who create improvements to in-home dialysis. If all goes well, research from The Kidney Project projects that artificial kidney technology could save Medicare some $15 billion annually.

The current system fails in terms of patient outcomes and budget sustainability. Not nearly enough patients get the transplants they could use and remain in the inferior and more costly in-clinic dialysis treatment route. In the short term, to save more Americans, more kidneys must be made available for transplant and dialysis must be made more comfortable and affordable. Looking towards the future, legislators can pave the way for innovation to thrive within this market.  

Photo credit: Getty Images/BRENDAN SMIALOWSKI/Staff