Understanding Washington: a nephrologist's perspective from inside the Beltway

The major principles that drive U.S. federal health policy-making are: (1) fixed or reduced costs, (2) ensured outcomes (or no evidence of undertreatment), (3) streamlined administration, and (4) political viability. A corollary is that providers are uniquely sensitive to financial incentives. Understanding these principles is vital to understanding federal health policy. Critically, these principles are nonpartisan and have been supported and used by all administrations since President Reagan. This article examines the end-stage renal disease (ESRD) prospective payment system, colloquially called "The Bundle," in the context of these major principles. Successful health policy, successful legislation, and successful regulation building all require executive leadership, mutual trust, and compromise. This is demonstrated by the events surrounding the passage of the Medicare inpatient prospective payment system, which governs hospital reimbursement for Medicare beneficiaries, including those not covered in the ESRD program. Given that the ESRD benefit consumes 6.3% of the Medicare budget for approximately 2% of Medicare beneficiaries, if nephrology is to experience future success, we must change how both policymakers and the wider field of medicine perceive our specialty. Understanding the major principles behind health care policy may facilitate this goal.