Let's keep this going
sign up today to receive our daily news briefs featuring a handful of the most important stories in business, tech, and life
EMAILED ON November 1, 2018 BY Lindsey Quinn

What has 2 kidneys and generates $4B in profit? Dialysis patients

The US’ two biggest dialysis companies profited $4B on the blood filtration procedure last year. But now, California is moving to cap the amount of green dialysis companies can make off patients and their insurance companies — and Big Dialysis ain’t filtering themselves anymore.

The Intercept reports that, in CA, the dialysis industry spent a record $111m to oppose Proposition 8, which would cap what outpatient clinics can charge patients.

(The previous $110m record was set by the pharmaceutical industry in 2016 to oppose a CA prop to limit the price of prescription drugs for state agencies.)

What’s more, $101m came from just 2 companies, Fresenius and DaVita, which serve 75% of the US dialysis patients between them.

Why do they care so much?

See aforementioned profit margin.

Dialysis, a process that externally filters a patient’s blood when their kidneys aren’t functioning, can run as high as $88k a year — and projections peg the global dialysis market to hit nearly $118B by 2023.

Luckily, a 1972 law required the US gov to pay for all dialysis treatment through Medicare regardless of age — but for patients with private insurance, commercial insurance providers still have to cover the first 30 months of treatment. 

The Intercept points out that nearly all Big Dialysis’ profits come from the premiums it charges commercial providers.

Prop 8 would limit the surcharge to private insurers to 15% premium over cost of care — with extra profits to be funneled back to patients or toward care improvements. But, the industry warns that the cap would lead to closures of many dialysis clinics, which they claim are understaffed as is.

‘So… how ‘bout using some of that $111m on staffing?’ — The world

Critics are having a hard time swallowing the idea that dialysis clinics are up against the ropes when they have $111m to toss into marketing campaigns.

Either way, Fresenius and DaVita aren’t going down without a fight — and if their campaigning is any indication, these guys are one ice bath away from taking matters into their own hands.

Get news (like this) delivered by email every morning