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 7,760 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 7,900 centers, employing 132,800 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.
    • 89% of US dialysis patients receive hemodialysis treatment, usually at a kidney dialysis center. Just over 1% receive hemodialysis at home. About 12% of dialysis patients received peritoneal dialysis, usually at home.
                              Industry Forecast
                              Kidney Dialysis Centers Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Nov 8, 2022 - Pharmaceuticals Show Progress In Reducing Kidney Disease Progression
                              • The race to treat chronic kidney disease (CKD) took a new turn in early November when pharmaceutical firms Eli Lilly and Boehringer Ingelheim announced that their Jardiance product was shown to reduce kidney disease progression or cardiovascular death by 28% versus placebo. It also had a key secondary endpoint benefit, showing a 14% reduction in hospitalization for any cause. Hospitalizations account for 35% to 55% of total healthcare costs for people with CKD in the US. AstraZeneca’s Farxiga dominated the sector since receiving FDA approval 19 months earlier.
                              • About 20% of patients who recover kidney function and discontinue dialysis subsequently restart dialysis, according to a paper published in the Clinical Journal of the American Society of Nephrology. The risk for dialysis re-initiation is higher for patients who are older at first dialysis start or who have cystic conditions, diabetes, or hypertension. Among 34,530 adult Medicare beneficiaries who started dialysis (96% hemodialysis) but had recovery of kidney function, 7217 patients (21%) restarted dialysis within 3 years of recovery (absolute rate of 11.5 per 100 person-years). At any point during follow-up, 26.4% restarted dialysis (absolute rate of 8.8 per 100 person-years). The investigators defined kidney function recovery as 90 days or more without dialysis.
                              • The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would update payment rates and policies under the End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) for renal dialysis services furnished to Medicare beneficiaries on or after January 1, 2023. This rule also proposes an update to the Acute Kidney Injury (AKI) dialysis payment rate for renal dialysis services furnished by ESRD facilities for calendar year (CY) 2023. The proposed base rate is $264.09, which would be an increase of $6.19 to the current base rate of $257.90. CMS projects that the updates for CY 2023 would increase the total payments to all ESRD facilities by 3.1% compared with CY 2022. For hospital-based ESRD facilities, CMS projects an increase in total payments of 3.7%, and for freestanding facilities, CMS projects an increase in total payments of 3.1%.
                              • A second kidney transplant correlates with better survival compared with dialysis treatment, according to data published in the American Journal of Transplantation. The advantage declines as patients age older than 70 years, however. “The present study could help clinicians to better disclose the risk and benefits of a second transplantation to their patients who have returned to dialysis," said study co-author Sophie Girerd.
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