The Economics of Home Dialysis: Acting forthe Individual While Planning Responsiblyfor the PopulationPaul Komenda and Manish M. Sood

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Traditional medical education paradigms tend not to focus on health economics and economic evalu-

ation. This has led to a culture in which bedside clinicians simply allocate health care resources made

available to them, with often minimal input as to what these resources are at the population or health

care system level. Life sustaining chronic dialysis therapies for end-stage renal disease are heteroge-

neous in terms of health care costs and the quality of life provided to patients receiving them. From

the traditional clinician’s perspective, they may be considered equivalent because there are no well-

designed randomized control trials establishing the superiority of one particular dialysis modality in

terms of all-cause mortality or cardiovascular events. The intent of this review is to provide clinicians

practicing in the area of chronic kidney disease some insights into the concepts of economic evaluation

and how it may be integrated into clinical decision making at a programmatic level while not compro-

mising individual patient care at the bedside. An epidemiologic perspective will be used to help frame

how the implementation of home dialysis modalities vary depending on local health policies in place.

Lessons learned by regional nephrology care systems may be readily transferable to other jurisdictions

in augmenting the uptake of home dialysis modalities where they are dwindling or struggling to grow.

A high-level understanding of economic data in this area may help influence health policy in the direc-

tion of the most efficient provision of dialysis to patients while not adversely affecting their quality of

life or health outcomes.

Q 2009 by the National Kidney Foundation, Inc. All rights reserved.

Index Words: Home dialysis; Economic evaluation; Health policy

The provision of life-sustaining chronic dial-ysis is extraordinarily resource intense in

a patient population with poor overall healthoutcomes. Many publicly funded health caresystems in industrialized nations have declaredchronic dialysis as a core essential service.Medicare in the United States with primarilyprivately provided health care services has enti-tled citizens to reimbursement for dialysis since1972.1,2 There is a great deal of variability in thepervasiveness of home dialysis modalities, notonly worldwide but even within regions inthe same health care system.3,4 This inter- andintrasystem variability reinforces the notionthat economics, health care policy, and the prac-tice of specific health care providers interact in

m the Department of Medicine, Section of Nephrology,

sity of Manitoba, St Boniface General Hospital, Winni-B, Canada.

dress correspondence to Paul Komenda MD, FRCPC,

CHE, University of Manitoba, St Boniface General Hos-

09 Tache Ave, BG007, Winnipeg, MB, Canada R2H 3A6.: paulkomenda@yahoo.com

009 by the National Kidney Foundation, Inc. All rights

d.8-5595/09/1603-0009$36.00/0

:10.1053/j.ackd.2009.02.006

Advances in Chronic Kidney Disease, Vol

a complex fashion and play a significant rolein how dialysis is delivered to a population.5

The aims of this review are to provide clini-cians with some fundamental concepts in eco-nomic evaluation and how this can beintegrated into clinical decision making in car-ing for end-stage renal disease (ESRD) pa-tients. We frame the discussion with somebackground epidemiology on the global bur-den of ESRD and how various health care sys-tem factors have likely influenced the uptakeof home modalities. We review the economicsof home peritoneal dialysis (PD) and home he-modialysis (HHD) in terms of costs, outcomes,and quality of life as compared with the dom-inant modality of chronic renal replacementtherapy, conventional in-center hemodialysis(HD). These concepts potentially provide in-sight into a rationale behind encouraginghome-based therapies in providing high-quality and economically efficient provisionof dialysis services to a population. Takinginto account the variability in geography andaccess to resources, the intent is to provide in-sights into the need for the development ofcustomized local policies to improve thepenetration of home therapies.

16, No 3 (May), 2009: pp 198-204

The Economics of Home Dialysis 199

History

Why have home modalities historically failedto proliferate in the United States? The answermay lie in economics. First, Medicare does notreimburse the significant costs to initiateHHD (training, renovation costs, and so on)nor does it reimburse alternative modalities ad-vocating for increased frequency of treatmentspotentially more attractive to patients like shortdaily hemodialysis (sDHD) or home nocturnalhemodialysis (HNHD).6 Second, this ‘‘capped’’composite rate has encouraged private dialysisproviders to attain profitability margins out-side the core provision of dialysis services, spe-cifically in the billing for additional proceduressuch as the provision and administration of in-travenous erythropoietin, vitamin D analogs,and iron.5 Certainly, allowing significant profitmargins to be realized by maintaining a captive‘‘in-center’’ population may have had a signifi-cant impact on hindering broad uptake ofhome modalities in the United States.

More globally, the mean prevalence forESRD patients on chronic dialysis is about280 patients per million populations with sig-nificant regional variation.6 It has been esti-mated that Medicare costs for dialysisprovision in 2004 were over $16 billion dollarsin the United States,6 with worldwide projec-tions over $1 trillion dollars for this decadeof dialysis costs.7 Neil et al8 have recently pro-vided an insightful review of various coun-tries throughout the world, their currentbaseline modality rate comparisons betweenHD and PD, and budget impacts of maintain-ing certain modality uses. Their conclusionsreiterate the necessity of a country by countryreview of the benefits of boosting PD rates ona macroeconomic scale to make the delivery ofchronic dialysis sustainable at a populationlevel.

A Clinician’s Guide to EconomicEvaluation

Economic evaluation as applied to the ration-ing of health care resources is an evolving sci-ence and has not been given a prominent rolein traditional clinical training programs. It isuniversally accepted that health care resourcesare scarce, and it follows logically that re-

sources are not available for all interventionsthat a population would like.9,10 Economicevaluation attempts to turn many of thesecompeting priorities into rational, universalmetrics in justifying these decisions. It is bestdefined as a ‘‘comparative analysis of alterna-tive courses of action in terms of both theircosts and consequences.’’11

Before embarking on a comprehensive eco-nomic evaluation, evidence must first be pres-ent for both the costs of alternatives and theirindividual effectiveness. Costing approachesmay be split into ‘‘direct costs’’ or the coststo the health care system directly (eg, humanresources, medical devices, and consumables)or ‘‘indirect costs’’ that are related to both paidand unpaid productive activities (eg, care-giver’s time, lost productivity, and so on).When interpreting an economic evaluation, itis important that the costing perspective takenis stated clearly, and its relevance to the readeris ascertained. Different costing lenses may in-clude societal costs (may include many indi-rect costs), health care payer costs (differingacross different health insurance schemes),or patient costs (varying depending on thehealth care system and social supports avail-able).

Socially conscious health care decisionmakers should strive to achieve maximum ef-ficiency for their resources. In the case ofchronic dialysis provision, this translates toproviding treatment to the most patients inthe least expensive way possible while ensur-ing to maintain the highest quality of care(measured in health outcomes) possible. Acost-minimization strategy assumes all alter-natives considered have equivalent healthoutcomes and impact on quality of life for pa-tients.11 In this case, a simple cost analysis canbe considered and the lowest cost alternativechosen. A cost-effectiveness analysis assessesrelevant clinical outcomes in universally ac-cepted units such as ‘‘life years gained’’achieved using an intervention and then as-cribes a cost to each alternative. In this way,each intervention is evaluated in terms of‘‘cost per life years gained.’’ In many cases,however, not only costs and ‘‘life years’’ arerelevant, but also quality of life during thoselife years must be taken into account for eachalternative. A cost utility study reports clinical

Komenda and Sood200

outcomes in terms of ‘‘healthy years’’ or costper quality-adjusted life years (QALYs). AQALY is calculated by taking the number oflife years gained with a particular health inter-vention, and multiplies this by a ‘‘utility’’ scorefor those years. A utility score rates the qualityof those years on a scale from 0 to 1.

The Economics and Uptake of PD

PD has several purported advantages overconventional HD, especially when chosenand started in a planned, coordinated settingas the initial dialysis modality.12 The effect ofdialysis modality choice on health outcomeshas been widely debated in the literature,with no clear consensus achieved.13-18 Thecosts of PD in Europe and North Americahave been consistently found to be less thanHD modalities.6-8,21-23 These costs, froma payer’s perspective, usually come in aroundUS $25,000 to $35,000 per year depending onthe costing methods used.22,24,35 Pertinent tothis review, the economics of modality selec-tion has influenced dramatic variability inthe uptake of PD worldwide.5 Canadian andWestern European nations have about 20% to30% of prevalent ESRD patients on PD as com-pared with rates as high as 75% in Hong Kongand less than 5% to 10% in the United Statesand Japan.3 Clearly, the health care systemprovider structure and policy has a greatermagnitude of effect on this variability thansimply patient case-mix alone.

Physician reimbursement schemes that re-munerate conventional HD at a higher ratemay play a role, although the overall magni-tude of physician reimbursement is likelysmall. This is shown by examining variationsin modality selection in Canada where healthcare is universally provided and funded ata national level, but variability exists basedon territorial (provincial) delivery. Most prov-inces in Canada offer much less reimburse-ment to physicians for the care of a PDpatient than for a patient on HD. The provinceof Ontario, on the other hand, offers equalphysician reimbursement for dialysis, inde-pendent of modality. Despite this, in Ontario,PD rates have failed to significantly differcompared with neighboring provinces.23

Some reasons for variable rates of PD uptake

include maximizing HD unit capacity in areasthat they are available, and possible disecon-omies of scale for PD in regions caring forsmall numbers of patients. In the case of theUnited States, it is possible that the ability ofproviders to bill for additional procedures inthe HD unit like the administration of intrave-nous erythropoietin or vitamin D3 analogsmay play a role.5

These factors alone still cannot explain allof the regional differences in PD uptake. Forexample, British Columbia, Canada, has a cen-trally coordinated, provincially funded renalagency with dialysis care provided in 5 re-gional health authorities practicing with theirown autonomy with regards to service provi-sion. Even in this system of identical reim-bursement for dialysis costs, medications,and physician remuneration fully fundedmultidisciplinary predialysis chronic kidneydisease (CKD) clinics and equivalent accessto HD spots, neighboring health authoritiesreport anywhere from 14% to 35% of prevalentPD patients.24 This dramatic variability in PDuptake, despite similar patient demographicsand economic considerations, suggests thatperhaps local, individual champions promot-ing a culture of PD first and creating a local ad-ministrative structure supporting access tothis modality likely have the greatest effecton boosting prevalent PD rates regardless ofcase-mix, dialysis funding, geography, or phy-sician reimbursement.

Economic Considerations in HHD

HHD has been around for over 40 years,1 buta renewed interest in this modality has beenspawned through the recently published suc-cesses for patients performing more frequentsDHD and HNHD. These modalities in whichpatients perform their own dialysis 5 to 7times per week for short periods on a daily ba-sis (sDHD) or overnight while they sleep(HNHD) have shown superior benefits onmeasurable clinical, biochemical, and patientquality of life over conventional 3-times-a-week HD.25-34

Several groups have published costingstudies for their HHD programs.35-40 ThreeCanadian centers began their programs aspilots and hence compared operating costs

The Economics of Home Dialysis 201

between their home programs and matchedcohorts of patients remaining on conventional3-times-a-week in-center HD. McFarlaneet al39 compared 33 HNHD patients with 23matched controls (matched for some basic de-mographic variables) from a local in-center di-alysis center that did not have a homeprogram. Costing was derived from 8 cate-gories including human resources, medica-tions, HD materials, overhead, physicianfees, admissions/procedures, depreciation ofequipment, and laboratory/tests/imaging.As expected, HNHD was found to have a sig-nificant cost saving over conventional HD interms of weekly staffing (US $210 v $423,P , .001) and overhead (US $80 v $238, P ,

.001). Conversely, HNHD was more expensivein materials costs because of more frequentruns (US $318 v $126, P , .001). Overall, pa-tients maintained on HNHD were approxi-mately $10,000 CAD less than for controlpatients on conventional, facility-based HD(Can $56,394 v $68,935, P , .006).

Slightly different conclusions were drawnfrom the other Canadian costing study onHNHD. Kroeker et al36 in London, Ontario,Canada, used a similar detailed costing meth-odology to compare 12 patients on HNHDand 10 sDHD to 22 matched conventionalHD controls. They concluded that a conven-tional patient cost Can $72,700 per year com-pared with Can $74,400/year for an HNHDpatient. This study also included patients re-ceiving sDHD at a slightly lower averagecost of Can $67,300 per year. It should benoted, however, that the costs of HNHD mayhave been skewed by 1 particularly costly pa-tient who, with the small sample size, skewedmean cost per patient year.

Lee et al35 reported the Calgary experiencecomparing in-center, satellite, and HHD costs.This group included the costs of PD as part oftheir analysis. Included in this analysis werecosts of outpatient dialysis care, inpatientcare, outpatient non–dialysis-related care,and the costs of maintaining dialysis access.They concluded overall annualized costs ofUS $51,252 (in-center HD), US $42,057 (satel-lite HD), US $29,961 (HHD), and US $26,959(PD). Agar et al40 reported a detailed approachto costing the care of maintaining 30 patientson HNHD as compared with matched con-

trols in satellite HD units performing conven-tional HD. Their findings concluded a satellitepatient cost about AU$29,952 per patient yearas compared with AU$28,032 for HNHD.Mohr et al41 reported one of the few Americancosting studies looking at HNHD that founda substantial savings in favor of HNHD($57,700) over conventional HD ($68,400).

Based on existing costing studies in HHDmodalities, it is difficult to conclude that a re-nal provider group will save money (at least inthe short-term). Existing costing studies arepotentially less generalizable to certain envi-ronments because they contain small numbersof patients and heterogeneous health care en-vironments with potentially different accessto resources and associated costs. In addition,most of these studies do not account forpatient or program startup costs and followpatients for only a limited time.42

Many of the early HNHD programs pub-lishing costs and outcomes were pilotprograms, involving small numbers of poten-tially healthier patients. It is recognized that asthese programs begin to grow in size andscope, it is inevitable that more marginal pa-tients will be accepted into programs, furtherdriving up costs for line items such as hospi-talizations and in-center runs for HHD pa-tients. As cohorts started on HHD begin toage, costly complications are expected, andeventually programs will reach a criticalmass in which program entries will equalexits. The British Columbia program is oneof the first to report larger numbers of pro-grammatic outcomes from which some ofthese costs could be extrapolated.43 Overa 2-year period, a total of 105 patients weretrained comprising over 163 patient years ofHHD. They reported 1- and 2-year techniquesurvivals of 85% and 74% and that 11 in-centerruns were required per patient year of HHD.

In terms of formal economic analyses, 2Canadian centers have performed formalcost utility studies comparing HNHD withconventional HD. McFarlane et al44 found sig-nificantly higher utility scores for HNHD pa-tients (0.77 v 0.53, P ¼ .03). Combined withtheir cost analysis, they were able to derivea cost utility for HNHD of CA$71,443/QALYas compared with CA$125,845 for conven-tional HD. Kroeker et al36 published their

Komenda and Sood202

economic analysis along with their costingstudy, reporting CA$85,442/QALY,CA$120,903/QALY, and CA$116,753/QALYfor sDHD, HNHD, and facility-based HD, re-spectively. Surprisingly, in this study, no sig-nificant difference in utility scores werefound between HNHD (0.70) and facility HD(0.71), which contradicts most studies per-formed comparing quality of life comparingthese modalities performed to date.27,31-

33,35,44 To help put these differences into per-spective, Laupacis et al37 found kidney trans-plantation to have an incremental cost/QALY over conventional hemodialysis of2CA$59,325 in the first year of treatment. An-other expensive intervention, such as treat-ments for chronic hepatitis C infections, canrange from US$10,000 to US$64,000/QALYdepending on the serotype being treated.38

Economics and Health Policy in ESRDCare: What Do We Do?

As patients transition from CKD predialysisclinics to ESRD, health care practitionersmust continue to advocate for patient choice.The massive variability within health care sys-tems and even within regions offering all mo-dalities clearly indicates, however, that patientchoice is broadly influenced by local practices.

In a resource-constrained environmentsuch as health care, providing costly life-sustaining therapies such as chronic dialysisnecessitates health policies promoting theleast expensive provision of services (ie,most efficient) while maintaining the most fa-vorable outcomes for patients measured bothby acceptable health outcomes and quality oflife. Too often, clinicians are motivated solelyby clinical endpoints, without playing an ac-tive role at the policy level. Bedside healthcare practitioners are far better poised to tailorhealth care delivery to accommodate both effi-ciency and quality. The evidence clearly showsthat local practices can greatly influence theuptake of home dialysis modalities, providinghigh-quality care at less overall cost to the sys-tem. Although clinicians should constantlystrive to deliver the best care possible withall the resources available to them at the bed-side, the creation of local policies and practicesimplemented should be strongly influenced

with rational economic evaluation as a compo-nent.

At the level of the individual program, clini-cians should engage specialized personnel toensure that streamlined processes are put intoplace to both electively start known CKD pa-tients on home dialysis modalities and encour-age incident, previously unknown patients toconsider transitioning to a home-based ther-apy. Our own environment has successfullyemployed process engineers to perform pro-cess mapping and analysis to help identify bot-tlenecks, streamline processes, and advocatefor the necessary resources to facilitate thisgoal in an evidence-based fashion.46 Becauseeach particular environment is unique in termsof opinions, expertise, resources, and processeswith regards to beginning a patient on home-based therapies, a one-size-fits-all approachcannot be used.

Because of changing demographics, namelyan aging population, the growth in numbers ofESRD patients will mainly be seen in the el-derly and likely more frail populations, whichwill continue to challenge our ability to growthe percentages of patients able to performhome dialysis modalities. This will necessitateeven greater vigilance of clinicians in promot-ing a culture of PD or HHD first within theirown facilities.

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