By Michael Booth
The Denver Post
Denver-based dialysis giant DaVita has ambitious plans to manage all of its kidney patients' health needs while also pushing into primary care for the general public, opening rich new territory but worrying patient advocates.
DaVita, with $7 billion in revenue, manages about $33,000 a year in Medicare spending for each of its 142,000 dialysis patients. But those chronically sick patients spend another $55,000 a year in Medicare money for other conditions, from diabetes to heart failure.
DaVita would like to join doctor and hospital groups who are contracting with Medicare to create "accountable care organizations," to oversee a patient's entire health care needs. If the ACOs hit quality standards while saving the government money, they can split the savings with Medicare.
The dialysis chain has opened a primary care clinic for its own employees, or "citizens" in company parlance, in Tacoma, Wash., and wants to expand the clinic's care to other employers in the area. That clinic will serve as a research and development model for DaVita's wider health care ambitions, DaVita Chairman Kent Thiry said in talks with The Denver Post and Wall Street analysts last week.
"For us, this is the Holy Grail," said Thiry, who argues that DaVita's improving quality measures, relationships with patients and doctors, and high volume all could improve care beyond dialysis.
Dialysis patients, who already spend about 12 hours a week in clinics owned by DaVita, Fresenius and smaller nonprofits, are wary of giving up more of their care to a for-profit chain's ambitions.
"I just don't see this ending well," said Bill Peckham, a Seattle dialysis patient who writes a blog popular in the kidney care field. "You're substituting business ethics for medical ethics, and I think that's a bad deal," said Peckham, who gets his dialysis from a nonprofit center.
Though the government is emphasizing its quality mandates in the ACO contracts it has issued so far, Peckham said the model encourages withholding of care to save money and create profit-sharing. DaVita faces legal challenges to its use of the critical dialysis drug Epogen, and to its business relationships with doctors.
Thiry calls himself "The Mayor," and employees "citizens" of the DaVita "Village," Peckham noted.
"Where does that leave the patients? We're the 'crop.' We're the 'ore' in the mines. That's not a fun place to be if you're the person who needs dialysis," he said.
Most other ACO proposals are dominated by groups of physicians, hospitals, or the two working together. Thiry said DaVita has been encouraged to branch out into more managed care areas by early success in a pharmacy it launched called DaVita Rx.
DaVita Rx handles specialty drugs not part of a dialysis patient's usual "bundle" of services paid by Medicare, and is already a $300 million business. The average dialysis patient is on 8.6 prescriptions.
The company, with 1,600 dialysis clinics, opened a general health clinic for 1,000 employees in Tacoma to combat rising prices in DaVita's own health plan. "We think there could be a real business model there that we can provide to other employers of different sizes," Thiry told analysts.
DaVita is not interested in employing many primary care doctors directly at the moment, Thiry said. (Kidney patients are referred to DaVita clinics by their nephrologist, or kidney specialist.)
Thiry said DaVita's multiple locations and high volume fit well with patients' overall needs. Dialysis patients are often diabetic, he said as an example, and need frequent foot checks to ward off infections from poor circulation. Those checks could easily happen while 30 patients at a time sit for hours in a dialysis clinic.
"We want to be a role model for American health care," he said.
The U.S. government's first wave of ACO partnerships did not include multinational corporations like DaVita. The company has been working with Medicare officials on a pilot proposal, and would need to see the government's terms in a specific agreement before moving ahead in coming months, Thiry said.
DaVita would not force patients to use specific doctors or hospitals, Thiry said, but the company "might give our opinion" on the best providers.
Other independent experts critiquing the ACO model give it high potential for savings and quality, but echo Peckham's concerns about the power of the "gatekeeper" model. The government must carefully monitor patient outcomes, they say, and patient advocates must watch to make sure the ACO operator doesn't skimp on hospital stays or other expensive forms of care.
Thiry said DaVita would handle concerns about withholding care to save money by being "totally transparent" about how patients fare.
http://www.denverpost.com/breakingnews/ci_20005473
