The Economics of End Stage Renal Disease: A Case Study Essay

999 Words 4 Pages
The purpose of this paper is to discuss healthcare financing in America, as it relates to a case study about End Stage Renal Disease (ESRD). I will discuss the major reimbursement mechanisms for ESRD. Additionally, I will provide the organization’s point of view about the economics of providing ESRD treatment. I will share options and potential trade-offs related to cost of treatment, quality of treatment, and access to treatment. Finally, I will discuss the ethical implications of resulting treatment options based on cost evaluation.
Reimbursement Mechanisms
In 1972, Medicare coverage for beneficiaries and individual under 65 years of age was spurred on by economic and political forecasts. The support for ESRD reimbursement was due to
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In an attempt to defray the cost of services for dialysis facilities that care for individuals who require considerable more services beyond the standard, there is an incentive program to provide additional reimbursement when caring for these individuals.
Economics of Providing ESRD Treatment
Effective January 1, 2011, the revised ESRD prospective payment system was phased in. The facilities have two options: immediately convert for 100% of payments, or the option to phase-in over a period of four years (25% of payment based on new system and 75% based on old system). It is estimated that the reimbursement will decrease approximately $118,000 per year under the new system (Wish, 2009). Providing ESRD treatment for more individuals with decrease reimbursement will be a challenge for smaller dialysis facilities’ survival. 25% of patients in America receive dialysis at small dialysis organizations that serve patients who live in rural or inner city areas (Wish, 2009). Unfortunately these facilities are at the greatest financial risk for reducing services, staff, and or eventually closure; therefore reducing access of care to the most vulnerable patients on dialysis.
In addition to the bundling of services there is the potential financial penalties based on quality of care indicators. This is forcing facilities to develop new policies and to find opportunities to provide quality care with fewer resources. Beginning in 2012, dialysis facilities that do not meet the

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