Kidney Dialysis Centers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 8,300 kidney dialysis centers in the US provide dialysis treatment for patients with end stage renal disease (ESRD), also known as chronic kidney failure. Patients with ESRD require dialysis treatments or a kidney transplant to sustain life. Dialysis is the removal of toxins, fluids, and salt from the blood of patients by artificial means.

Competing with Large Companies

The US kidney dialysis center industry is dominated by two large players – Fresenius Medical and DaVita – which together have 72% of the market.

Dependence on Government Reimbursements

Kidney dialysis centers earn the majority of their revenue through reimbursements from Medicare and Medicaid, since all ESRD patients are covered by Medicare, regardless of their age or financial circumstances.

Industry size & Structure

A typical kidney dialysis center has 16-17 employees and generates about $3-4 million in revenue.

    • The kidney dialysis center industry in the US consists of 450 firms operating about 8,300 centers, employing 130,600 workers, and generating $28 billion in annual revenue.
    • The industry is highly concentrated, as the two largest firms – Fresenius Medical and DaVita – treat about 80% of kidney dialysis patients in the US and account for 72% of outpatient dialysis centers.
    • Other large kidney dialysis firms include US Renal Care, Dialysis Clinic, Inc., American Renal Associates, and Satellite Healthcare.
    • There are about 558,000 patients receiving dialysis treatment in the US.
    • 87% of US dialysis patients receive hemodialysis treatment, usually at a kidney dialysis center. Just over 1% receive hemodialysis at home. About 13% of dialysis patients receive peritoneal dialysis, usually at home.
                              Industry Forecast
                              Kidney Dialysis Centers Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              May 7, 2024 - Moderate Sales Growth Expected
                              • Kidney dialysis industry sales are forecast to increase at a 6.46% compounded annual rate from 2022 to 2027, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Employment increased slightly during 2023 while average wages for nonsupervisory employees decreased slightly, according to the US Bureau of Labor Statistics.
                              • The Centers for Medicare and Medicaid Services (CMS) is penalizing some dialysis facilities that disproportionately serve patients who are low-income or people of color, according to research published in JAMA Network. An observational study of nearly 2,200 dialysis facilities participating in the agency’s End Stage Renal Disease Treatment Choices model found safety-net facilities serving mostly Black and Hispanic patients more frequently experienced CMS reimbursement cuts as high as 5% in the first year of the payment model for not moving more treatment to the home. CMS launched the payment model in 2021 to incentivize dialysis providers to move treatment to the home or encourage transplants in an effort to reduce healthcare spending. The study results come shortly after CMS released a report which found that the End Stage Renal Disease Treatment Choices model is not producing the results the agency intended. The report found no evidence that the payment model has had any effect on the use of home dialysis or transplants during the first two calendar years of the model. The pilot program runs through 2027.
                              • A medical trial showed that pharmaceutical manufacturer Novo Nordisk's drug Semaglutide, which goes by the names Ozempic and Rybelsus for treating Type 2 diabetes, and Wegovy for treating obesity, can reduce the risk of death due to kidney or cardiovascular complications by 24%. Compared to placebo recipients, the semaglutide group also had a lower risk that their kidney disease would worsen. Kidney International estimates that as much as a third of all kidney disease cases in the US are associated with obesity. The rapid uptake of semaglutide-based drugs may significantly reduce the number of overweight people, reducing in turn the need for kidney dialysis. The trial results come as another class of diabetes meds, SGLT2 inhibitors including AstraZeneca’s Farxiga and Eli Lilly and Boheringer Ingelheim's Jardiance, are making inroads in chronic kidney disease.
                              • Administrators of independent dialysis clinics said in a letter to Congressional leaders that intervention is needed to avoid staffing cuts because of inadequate Medicare payments. The letter cites a recent study by Prima Health Analytics which found that dialysis facilities have accumulated $1.7 billion in losses over the last 3 years. On average, facilities lost 42% of operating expenses in excess of revenues, totaling $320,000 per facility per year. “A mere 3% increase to the base rate for [calendar year] 2023 is woefully inadequate in this time of economic and staffing instability. With absent action from Congress, access to care and the quality of care for individuals relying on Medicare for their dialysis services will be jeopardized,” the letter said.
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