Financing of end-stage renal disease care: past, present, and future

The Medicare end-stage renal disease (ESRD) program has offered financial access to needed health care for ESRD patients, and it has given ESRD providers a reliable source of payment for their services. Total Medicare ESRD expenditures have increased since the inception of the program, due mainly to increased enrollment and changing patient mix. As a result, cost control is a dominant theme of payment policy. This article describes the history of Medicare ESRD financing policy and identifies related service delivery issues including treatment technology, service resources, treatment processes, and patient selection. It also discusses several options available to Medicare for managing the growth of ESRD program costs, including capitation payment methods, control of ESRD enrollment, and payment for erythropoietin treatment. Possible future changes in financing ESRD are identified. With a goal to control costs. Medicare probably will use payment methods to change service mix and reduce use by influencing provider incentives and marketplace competition. Health system reform also may affect ESRD benefits and payments, if the ESRD program is folded into a new financing system. ESRD patients and providers face a challenge of uncertainty during this period of change.