The legislative and regulatory process in the end-stage renal disease (ESRD) program, 1973 through 1997

Although hemodialysis began in the early 1960s, it did not begin to really grow until 1973, when the Federal government started to pay for end-stage renal disease (ESRD) treatment under Medicare. Since then, the Health Care Financing Administration (HCFA) has made a series of mistakes while maintaining this very successful program. This article traces the steps HCFA took, and the responses by the providers that produced the situation we have today. This program pays the lowest amount for hemodialysis of any industrialized nation, and most likely as a result has the highest mortality rate (23%) of any of the same countries. The problem as outlined is that HCFA attempted to ration by price while ignoring quality. This has been compounded by the providers finding more and more ways to reduce cost to continue to make a profit while not improving quality. The result is a program that could have been much better, and a patient population that has suffered.