The production of dialysis by for-profit versus not-for-profit freestanding renal dialysis facilities

Abstract

Objective: A study was conducted to determine whether for-profit and not-for-profit freestanding renal dialysis facilities differ with respect to efficiency in the production of dialysis treatments.

Data sources/study setting: National data on 1,224 Medicare-certified freestanding dialysis facilities were obtained from the Health Care Financing Administration's (HCFA) 1990 Independent Renal Dialysis Facility Cost Report. Data on Medicare patients receiving care at these facilities during 1990 were obtained from HCFA's End Stage Renal Disease (ESRD) Program Management and Medical Information System (PMMIS).

Study design: Ordinary least squares regression (OLS) was used to estimate the association between monthly output of dialysis treatments in 1990 and (a) facility capital and labor inputs, (b) facility ownership characteristics, and (c) case-mix characteristics.

Data collection/extraction methods: Facility and patient level data were extracted from the Facility Cost Report and the PMMIS databases, respectively. Patient level data were aggregated by facility and merged with facility level data.

Principal findings: For-profit sole proprietorships, for-profit partnerships and for-profit corporations each produced significantly more dialysis treatments per month than not-for-profits, adjusting for quantities of resource inputs and case-mix characteristics.

Conclusion: For-profit facilities appear to be more efficient producers of dialysis treatments than not-for-profits. Further study should address whether other factors such as differences in severity of disease or in quality of care are responsible for these observations.