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Dialysis Discussion => Dialysis: News Articles => Topic started by: Zach on October 16, 2015, 03:36:37 PM

Title: A Cost-Benefit Analysis of Government Compensation of Kidney Donors
Post by: Zach on October 16, 2015, 03:36:37 PM
What do you think?

A Cost-Benefit Analysis of GovernmentCompensation of Kidney Donors

P. J. Held1,*,†, F. McCormick2,†, A. Ojo3 and J. P. Roberts4
1Department of Nephrology, Stanford University,Stanford, CA
2U.S. Economic and Financial Research, Bank of America,San Francisco, CA (retired)
3Department of Nephrology, University of MichiganHealth Systems, Ann Arbor, MI
4Department of Surgery, University of California SanFrancisco Transplant Service, San Francisco, CA
*Corresponding author: Philip J. Held, esrd00@gmail.com
†Authors Held and McCormick are co-first authors on this work.

From 5,000 to 10,000 kidney patients die prematurely in the United States each year, and about 100,000 more suffer the debilitating effects of dialysis, because of a shortage of transplant kidneys. To reduce this shortage, many advocate having the government compensate kidney donors. This paper presents a comprehensive cost-benefit analysis of such a change. It considers not only the substantial savings to society because kidney recipients would no longer need expensive dialysis treatments—$1.45 million per kidney recipient—but also estimates the monetary value of the longer and healthier lives that kidney recipients enjoy—about $1.3 million per recipient. These numbers dwarf the proposed $45,000-per-kidney compensation that might be needed to end the kidney shortage and eliminate the kidney transplant waiting list. From the viewpoint of society, the net benefit from saving thousands of lives each year and reducing the suffering of 100,000 more receiving dialysis would be about $46 billion per year, with the benefits exceeding the costs by a factor of 3. In addition, it would save taxpayers about $12 billion each year.

To read the complete article:
http://onlinelibrary.wiley.com/doi/10.1111/ajt.13490/epdf

The article's supplemental information:
http://onlinelibrary.wiley.com/store/10.1111/ajt.13490/asset/supinfo/ajt13490-sup-0001-Suppmat.pdf?v=1&s=44bd9b3fa2dfed8d82d773702965eabc1fc74e8c
Title: Re: A Cost-Benefit Analysis of Government Compensation of Kidney Donors
Post by: Rerun on October 16, 2015, 08:02:42 PM
I'm not a number cruncher but it just makes common sense that paying the donor something would get people off dialysis and save the government money.  More Donors = more transplants.

              :cheer:
Title: Re: A Cost-Benefit Analysis of Government Compensation of Kidney Donors
Post by: Zach on October 19, 2015, 04:35:59 PM
No more comments?

Here's more from the report:

In June 2014, the American Society of Transplantation and the American Society of Transplant Surgeons held the joint Workshop on Increasing Organ Donation in the United States. They recently released a meeting report (1) on the workshop that concluded, ‘‘…we should be working together along the arc of change to remove remaining disincentives, explore opportunities to either change or modify NOTA (National Organ Transplant Act (2)), and lay the groundwork for the next steps with our professional colleagues, experts in economics, law and ethics, our partners in Congress and agencies responsible for US health policy and the American public.’’

This paper is a response to that invitation. It provides a comprehensive cost-benefit analysis of a proposed change to NOTA, that is, moving from our current kidney procurement system in which compensation of donors is legally prohibited to one in which the government (not private individuals) compensates living kidney donors $45 000, and deceased donors $10 000. Such compensation would be considered an expression of appreciation by society for someone who has given the gift of life to another.

It could include an insurance policy against any health problems that might develop in the future as a result of the donation, including disability and death. Compensation for living donors could be paid in a delayed form, such as tax credits or health insurance, so people who are desperate for cash would not be tempted to sell a kidney. Compensation for deceased donors would be paid to their estate.

All other aspects of the kidney procurement and allocation process would continue exactly as they are under the current system. In particular, living donors would continue to be carefully screened and informed of possible hazards associated with kidney donation. Kidneys would be allocated as the organs from deceased donors are now—by the federally funded and managed Organ Procurement and Transplant Network (currently administered under contract by United Network for Organ Sharing).

A program of government compensation of kidney donors would provide the following benefits:

1.  Transplant kidneys would be readily available to all patients who had a medical need for them, which would prevent 5000 to 10 000 premature deaths each year and significantly reduce the suffering of 100 000 more receiving dialysis.

2.  This would be particularly beneficial to patients who are poor and African American because they are considerably overrepresented on the transplant waiting list. Indeed, it would be a boon to poor kidney recipients because it would enable them to reap the great benefits of transplantation at very little expense to themselves.

3.  Because transplant candidates would no longer have to spend almost 5 years receiving dialysis while waiting for a transplant kidney, they would be younger and healthier when they receive their transplant, increasing the chances of a successful transplantation.

4.  With a large number of transplant kidneys available, it would be much easier to ensure the medical compatibility of donors and recipients, which would increase the success rate of transplantation.

5.  When a first kidney graft fails, the patient would be readily able to obtain a second transplant kidney. (Other considerations might delay a second transplant but not a shortage of transplant kidneys.)

6.  Taxpayers would save about $12 billion each year. Dialysis is not only an inferior therapy for end-stage renal disease (ESRD), it is also almost 4 times as expensive per quality-adjusted life-year (QALY) gained as a transplant.

7.  The incentive for Americans to participate in transplant tourism or the black market for kidneys would virtually cease.

8.  The overall proficiency of kidney transplantation would increase as the number of transplants increases. Currently, the typical kidney transplant center performs only two transplantations a month.

Please go to the link for more info.
Title: Re: A Cost-Benefit Analysis of Government Compensation of Kidney Donors
Post by: MuddyGurl on October 19, 2015, 08:02:13 PM
Just saw this post. I've ranted a bit that it makes no sense to have the "altruistic" only donors, not in today's world.  The risk a living donor takes is great…long term, their own health, ability to work get insurance, survive their own medical issues is what makes Cadaver transplants more appropriate.

I completely agree on the massive cost that may Bankrupt this Nation by 2050..we are up 600% for dialysis patients since the 90s..and costs have rippled from 2006.

So why not cadavers? A program to educate seniors and the elderly to donate their organs would give an immediate boost to the number of ( older) organs for all the older patients who wait longest.

Possibly there are enough healthy cadaver kidneys that could off load the massive Boomer needs over the next 3 decades.  THis frees up living donors to give to the younger people who need the kidney much longer.

the logic of first come is no longer feasible.  An 20 year old with an elder's kidney will surely need 2 more before her lit is over…but if she always gets the younger kidney, and those over 55 get the elder kidney…could this work.

From all I am reading other countries are  fearful of complete medical  cost meltdown in the coming years… so CHina is paying for 2100K in a trial right now for sVLProtein diets…anything to save the horrendous dialysis costs.

Same for Romania where the Gov. is paying for their citizens to change diet to delay RRC and proving the AAMino Acids they need daily.  …Sweden too, as well as many European countries who do not have our wealth and medical equipment  production ability, safety and effectiveness for dialysis..

As 10,000 US citizens turn 65 and go on Medicare a DAY now.....and  every day for the next 18 years!!!   ..then we have  both the problem of current 70% overweight/obesity, the expected rise in diabetes to 50% of adults estimated by 2050…many older and younger Boomers  will need kidneys, many will die earlier from many complications/diseases, so some level of cadaver organs could be available to meet the coming need.

we don't have the mindset yet, I think, until it is ourself, or a family  member  facing death or  a life on dialysis to work hard for these options.

But we have also NOT been at all squeamish over the harvesting of fetal and  unborn babies' organs… at least what I see with so many women proud of what they did to abort for convenience, so maybe we are ready to harvest our own elder's organs upon death?

Grim thoughts, but I am guessing our "selfie nation" attitudes of preserving our own life will over ride just accepting we  will die earlier.
Title: Re: A Cost-Benefit Analysis of Government Compensation of Kidney Donors
Post by: Bill Peckham on October 20, 2015, 01:55:53 PM
The numbers being tossed around are off and looking at the article I can't work out where they get their numbers.

The number of people using dialysis has gone from about 250,000 in 1995 to about 450,000 today, with the year to year increase slowing significantly in recent years, it's currently flat and even falling in some parts of the country.

But it is in the paper where they reckon costs that it is impossible to understand the numbers they use. The Paper assumes that yhe total medical cost of someone using dialysis is $121,000 a year - that is a nonsense number. It is averaging the costs of Medicare beneficiaries and people using dialysis who have private insurance, yet the point of the paper is talk about Medicare savings. Why include the private payer numbers unless the objective is to inflate potential savings? The cost to Medicare of someone who is using dialysis and is eligible to receive a transplant is much lower, in the range of 50 to 60,000 a year. It is hard to take the analysis seriously when they bugger the numbers so badly.
Title: Re: A Cost-Benefit Analysis of Government Compensation of Kidney Donors
Post by: Bill Peckham on December 18, 2015, 09:42:55 AM
The authors of this study have sent me two rebuttals to my post here, which I think is great. It would be very useful if people who are doing research interacted with us via the discussion board. For some reason they were not able to sign up and post it themselves so I will post their rebuttal in its entirety, if I can. First here is the email and 'short" rebuttal (I've not edited is so typos are theirs), then I will try to post the longer rebuttal (it includes a table)


Quote
Hello Bill,

I attach two documents both in response to your comments on the blog I hate dialysis in response to our published AJT  paper ( Cost Benefit Analysis of Government Compensation.....).

The first is a brief response which I hope you can post on the blog in response to your comments. I must say I tried for quite some time but was unable to jump the hurdles required to post this response. If you cannot or choose not to post this to the blog , please advise and I will go back to the grinding phase of posting it myself.

The second document is longer and more detailed on the same topic and includes results of reestimating our analyses using your suggested price levels. This document is for your use as you see fit and is obviously too long for the blog site unless you can arrange to have the blog post it in some fashion. In any case, this document should answer in extreme detail any questions you may have about our methods.

All the best,

Philip


Now the short rebuttal


Quote from: Bill Peckham on October 20, 2015, 01:55:53 PM
The numbers being tossed around are off and looking at the article I can't work out where they get their numbers.

The number of people using dialysis has gone from about 250,000 in 1995 to about 450,000 today, with the year to year increase slowing significantly in recent years, it's currently flat and even falling in some parts of the country.

But it is in the paper where they reckon costs that it is impossible to understand the numbers they use. The Paper assumes that yhe total medical cost of someone using dialysis is $121,000 a year - that is a nonsense number. It is averaging the costs of Medicare beneficiaries and people using dialysis who have private insurance, yet the point of the paper is talk about Medicare savings. Why include the private payer numbers unless the objective is to inflate potential savings? The cost to Medicare of someone who is using dialysis and is eligible to receive a transplant is much lower, in the range of 50 to 60,000 a year. It is hard to take the analysis seriously when they bugger the numbers so badly.

Response by the authors of “A Cost-Benefit Analysis of Government Compensation of Kidney Donors” to Mr. Peckman’s comments, of which we have just become aware.  We exhaustively documented our methods and sources in the paper and in 12 Supplements to the paper.  Our primary data sources were the US Renal Data System and the Scientific Registry of Transplant Recipients.  Cost information was extensively developed in Supplement 5, and patient survival in Supplement 12.   

The purpose of the paper was not to “talk about Medicare savings.”  It was to perform a comprehensive cost-benefit analysis of government compensation of kidney donors.  It incorporated all the benefits (especially increases in expected life and quality of life) and all the costs (Medicare, Medicaid, and patient co-pays) for everyone who might gain or lose from government compensation of kidney donors.   

Savings to the taxpayer were just a side benefit of the analysis, and follows from the fact that Medicare is committed to pay for dialysis, which is 3 to 4 times as expensive per unit of life as is a transplant.  Our estimate of $121,000 for a year of treating a patient on dialysis is not a “nonsense number.”  It is documented in great detail in Supplement 5.  We started with the USRDS estimate of $87,000 per year for 2011.

We added a trend factor (rate of change from 2006 to 2011), and then the patient co-pay. (Table S5-1 shows all these calculations).  We did nothing to inflate cost savings.  In fact in every instance where we had a choice, we made conservative assumptions, i.e., that reduced the net benefits from the government compensation of kidney donors.

Title: Re: A Cost-Benefit Analysis of Government Compensation of Kidney Donors
Post by: Bill Peckham on December 18, 2015, 10:01:45 AM
Now the long rebuttal (which I'll respond to here when I get a moment), I'll attach the PDF too. I think I have their table formatted for the IHD discussion board, I could not get the list to stay as a numbered list v bullets, and the IHD table interface is a PITA, I got it as close as I could. One initial comment is that IHD is not my blog, I do have a blog with a lot of discussion of paying for kidneys http://www.billpeckham.com/from_the_sharp_end_of_the/transplant/ (http://www.billpeckham.com/from_the_sharp_end_of_the/transplant/) by myself, Meinuk and Hemodoc. But DSEN is not active lately so I will post replies here rather than moving the discussion over to DSEN.

December 17, 2015
Long Version for Mr. Bill Peckman,

In response to our paper recently published in the American Journal of Transplantation ((A Cost Benefit Analysis of the Government Compensation of Kidney Donors by Held, McCormick, Ojo and Roberts. Available for free at http://onlinelibrary.wiley.com/doi/10.1111/ajt.13490/epdf (http://onlinelibrary.wiley.com/doi/10.1111/ajt.13490/epdf))

Mr. Bill Peckman writes in the “I hate dialysis blog”:
(http://ihatedialysis.com/forum/index.php?topic=32677.0 (http://ihatedialysis.com/forum/index.php?topic=32677.0))
The numbers being tossed around are off and looking at the article I can't work out where they get their numbers.

The primary source of our data is from the USRDS and the SRTR the widely recognized sources of ESRD cost and outcomes. We documented our methods and sources in the paper and in 12 Supplements to the paper. Cost information is extensively developed in Supplement 5 and survival in Supplement 12. “Detailed Calculations of Costs and Benefits” are reported in Supplemented 2.

Mr. Peckman continues:
But it is in the paper where they reckon costs that it is impossible to understand the numbers they use. The Paper assumes that yhe total medical cost of someone using dialysis is $121,000 a year - that is a nonsense number. It is averaging the costs of Medicare beneficiaries and people using dialysis who have private insurance, yet the point of the paper is talk about Medicare savings. Why include the private payer numbers unless the objective is to inflate potential savings? The cost to Medicare of someone who is using dialysis and is eligible to receive a transplant is much lower, in the range of 50 to 60,000 a year. It is hard to take the analysis seriously when they bugger the numbers so badly.

The purpose of the paper was not to “talk about Medicare savings” and no where did we say that. The purpose was to perform a cost benefit analysis of the Government compensating organ donors. To this extent, the focus was on all benefits (survival and quality of life) and costs (Medicare, Medicaid and patient co-pays) for all persons who might gain and might lose by a federal program to compensate donors. While Medicare cost (actually paid claims) are the primary source of funding for ESRD, Medicare is not the only public source of funding. Medicaid also is a major payer. (We did not verge into the Social Security Disability program which is another major source of public expenditures for the treatment of ESRD patients).

Savings to the taxpayer was a snippet of the analysis and in fact the fundamental point of the paper is to estimate benefits with some measure of how much it cost to obtain those benefits. Even if there were no savings to the tax payer, this analysis would be useful and innovative exercise. Like any investment, what do you gain and what did it cost? Tax payer savings are a serendipitous outcome given that Medicare is committed to pay for dialysis which is 3 to 4 times as expensive per unit of life as is a transplant. But taxpayer savings were by no means the primary objective of this study.

While the analysis did not place a primary focus on private insurance, does Mr. Peckman suggest that research focused on saving all Americans resources is not a legitimate exercise in research?

We did estimate patient co-pays which do average about 20 percent of Medicare Approved Charges. Again, all this is laid out in simple language. We purposely did not estimate complex models as we wanted all to be transparent.

We included the private pay numbers for patients who had Medicare as a primary payer. Payments by private insurers for patients who have Medicare asa secondary payer are not available but it is common knowledge that private insurance when primary insurer typically pays a multiple of Medicare Approved Charge for the same service. (See the DaVitae reference 24). Many would say that private pay patients, particularly those in the 30-month coordination window, are real cream of the crop and dialysis units open and close based on their distribution. Does Mr. Peckman say they do not represent a legimitate
research interest?

Our estimate of $121,000 for a year of treating a patient with Medicare primary is not a “nonsense number” as Mr. Peckman suggests. It does include estimates of patient co-pays but is not estimated for patients with private primary insurance. We did not mix private pay and Medicare insurance other than to estimate a co-pay amount which is a true societal cost. Some of these copays are paid by private insurance but Medicaid pays substantial amounts as we report in Supplement 5.

Our $121,000 per year cost for 2015 is documented in great detail in Supplement 5. We start with the USRDS estimate of $87,000 per year for 2011; This is a direct quote from the USRDS. We add a trend factor (estimated by rate of change from 2006 to 2011, again from the USRDS) and then we add in the patient co-pay. (Table S5-1 shows all these calculations in a manner that no fancy models are used. Only estimates based on simple arithmetic. We do not provide estimates for patients receiving dialysis therapy whose primary insurance is private. If we had included paid amounts for patients with private insurance our yearly dialysis estimate would have been substantially higher contrary to Mr. Peckman’s primary objection.

In Supplement 5 (Table S5-3) we do discuss briefly the complex and largely uncertain role that private insurance for patients with primary private insurance (primarily for younger patients in the 30 month coordination period covered by employer group health insurance). In our estimating the fraction of ESRD costs paid by the taxpayer, we do try to make some estimates of how many patients are covered by private insurance but we are up front identify shortcomings in the data under the sense that identifying areas where missing data are common is a major contribution to the research public.

We did nothing to inflate cost savings and in fact in every instance where we had a choice we made conservative assumptions, which biased our estimates against the primary objectives of our analysis. See Supplement 7 for a discussion of these points. For example, our estimate of the taxpayer fraction of cost was 79 % of total cost. We used 75 %. (See Table S5-3). We also reported substantial sensitivity analyses as shown in Supplement 8.

Mr. Peckman says that a better estimate of Medicare per year cost for a patient receiving dialysis therapy is “$50,000 to $60,000”. The Medicare approved charge, as reported by Da Vitae in SEC filings in 2011 was approximately $250. That would amount to about $39,000 just for dialysis without any allowance for billings beyond the MAC. Tha total would not include any physician services, drugs, hospital care, and all the rest of what Medicare covers. And this was for 2011 after the new composite rate went into effect. As reported in Supplement 5, these totals per year were increasing at 3.6 percent per year, which raises the estimate by another 10 percent to $53,000 for dialysis in 2015 not including any other services billed and paid for in the dialysis unit.

Perhaps Mr. Peckman is of the opinion that our estimates may be more representative of older patients. USRDS data do show that there is a gradient across age groups with higher cost for older patients being the norm. But that gradient is not very steep. The modal age at transplant is about 45-50 years of age. USRDS published data for 2011 report an average of $84,000 for patients receiving dialysis therapy in the 45-64 age group or 4 percent lower than our starting estimate of $87,000 and far from Mr. Peckman’s estimate.

Perhaps Mr. Peckman is arguing that these waitlist dialysis patients are healthier and thus would require less medical resources per year than a patient of the same age not on the waitlist. True enough wait list patients are substantially more healthy than the typical dialysis patients. But a significant fraction of cost for dialysis are reasonably fixed at an approved Medicare charge per treatment x approximately 3 treatments per week. And with the new Medicare bundling rules, the fraction of cost in a fixed share is likely to have increased. But regardless of this share analysis, our clinical experience is that patients on the waitlist are treated more intensely because there is a fear of
being bumped off the waitlist because of a declining medical status. It is our experience that treating nephrologists act promptly and decisively to try and prevent a loss of waitlist eligibility. If anything the waitlist patient may cost more than the average patient on dialysis in the same age group.

While Mr. Peckman did not note, we acknowledge that all our cost estimates are higher than typical perceptions including transplant procedures. The fundamental point of our analysis is the difference between the cost and outcomes of renal failure patients with a functioning transplant versus patients receiving dialysis therapy. While we do not think our cost estimates are biased high, but lets suppose they are. If this is the case than both transplant and dialysis costs might be biased high but the bias is likely to wash out when one considers differences in dialysis and transplant outcomes, the principal focus of our research.

In response to Mr. Peckman characterization of our numbers as “nonsense” we estimated our models to determine what impact Mr. Peckman’s alledged estimates would have on our basic conclusions. Shown in Tables A and B are some statistics we estimated making comparisons of our published results with those implied by Mr. Peckman’s hypotheses. Table A focuses on results for the individual kidney recipient in our steady state solution. Table B has the same basic format but presents results for all transplants in a given year if indeed our steady state solution were achieved.

In both tables we present 4 selected measures for each of 3 scenarios:
As stated above, this paper is really about both benefits and costs of increasing the supply of organ donors. In row 1 of Table A, we see that the Peckman price levels have no impact on the primary measure of welfare gain. For the individual patient who is fortunate to receive a kidney, the monetary value of the gain in patient longevity and quality of life is $1.3M.

With the lower Peckman cost for a dialysis patient year, the savings from stopping dialysis decreases from $1.5M to $1.0M (over a patient’s lifetime). The net welfare gain (row 3) for society which combines the benefits to the patient and savings of dialysis is $1.9M in our paper and $1.4M with the “Peckman” cost. If all costs are lowered (Column 3 and row 3, the welfare gain is $1.7M per patient transplanted with only an 11 percent decrease from out original estimates.

Tax payer savings per transplanted patient in our paper were $403,000, which drops to $70,000 with the lower dialysis year costs. However if all costs are lowered to the Peckman standard, the savings are $267,000 per patient. Again all the statistics in Table A are per transplanted patient. The bottom line is that the benefits of transplantation are very substantial and robust. Even with dramatic changes in the cost level assumed the benefits and savings are very dramatic. Tax payer savings are not trivial either.

Table B presents similar statistics as Table A.

Table A: Present Value Of Benefits and Costs In Steady State (Per Kidney Recipient)
Measures       
Per
Kidney
Recipient		Our
Published         
Estimates
(Table 3)
“Bugger
costs”		With
“Peckman”       
Dialysis
Costs		With all       
costs
lowered
to
“Peckman
Levels”
Welfare
gain (over a     
lifetime)		$1.3M              No
Change            		No
Change
Savings           
from
stopping
dialysis
(over a
lifetime)		$1.5 M              $1.0M
(-33 %)            		$1.0M
(-33 %)
Net welfare     
gain for
society		$1.9 M             $1.4 M
(-26 %)           		$1.7M
(-11 %)
Taxpayer         
savings		$403K             $ 70K
(-83 %)            		$267K
(-34 %)
In brief, Table B shows very substantial statistics for all measures. In steady state our estimate is that the Welfare Gain per year in $46.7B. Even at the “Peckman” cost levels, none of the statistics fall below a billion per year. Net welfare gain for society even under the Peckman price levels do not fall below $50B per year.

In conclusion, we suggest that the results of our analysis are robust and powerful. While not shown in these tables the benefit cost ratio for Society increases from 3.0 in our published paper to 3.5 with all costs lowered to the Peckman level.

Table B: Present Value Of Benefits and Costs In Steady State (All Kidney Recipients in a Year)

Measures     
For all
Kidney
Recipients
in a year		Our
Published           
Estimates
(Table 4)

“Bugger
costs”		With
“Peckman”         
Medicare
Dialysis
Costs		With all
costs
lowered
to
“Peckman
Levels”
Welfare         
gain 		$46.7B               No
Change               		No
Change
Savings           
from
stopping
dialysis
$50.9 B              $35.3B
(-31%)             		$35.3B
(-31%)
Net welfare     
gain for
society		$65.6 B             $50.0B
(-24%)           		$59.2B
(-11 %)
Taxpayer         
savings		$14.1 B             $ 2.4 B
(-83 %)            		$9.3B
(-34 %)
Title: Re: A Cost-Benefit Analysis of Government Compensation of Kidney Donors
Post by: Bill Peckham on December 20, 2015, 09:22:47 PM
The problem I have with the paper is on a number of levels but in general, I believe it overstates the benefit of paying kidney donors as a way to increase the transplant rate.

The bundled allowed rate for a single dialysis treatment is about $260 today, and generally, people using conventional incenter dialysis will receive up to 156 treatments a year, for a yearly total cost of about $40,500. Add to that about $4,000 for the allowed reimbursement of the Medicare Capitated Payment physician for a total of about $45,000. This is the dialysis ante, it includes the 20% that Medicare does not reimburse (which if you were inflating what Medicare pays back to the Medicare allowed rate you would increase the paid amount by 25% not 20% as the authors choose). After the ante there are medications not covered by the bundle, hospitalizations and diagnostic tests, but if we’re only looking at the subset of dialyzors who want and are medically suitable for a transplant, they're hospitalized less than the 14 day average. Thus my estimate that the TOTAL COST of a person Medicare primary, wanting and able to receive a transplant, who is using dialysis, is between $50 and 60,000 per year.

The $86,000 reported by the USRDS (I could not find this exact number in the 2013 report) is almost certainly the Medicare allowed reimbursement for the medical care of someone using dialysis who is Medicare primary and it includes $12,000 or so average for skilled nursing, which I would maintain should not be included in determining potential savings. Given I believe the $86,000 is the total allowed cost of care averaged across everyone using dialysis, on the transplant wait list (about 1 in 4) or not (over 75% of those Medicare primary using dialysis), I do not understand the choice to increase this by 21%.

I would find of interest an analysis of people who are currently waiting for a transplant. This is a clearly delineated subset of dialyzors. I’d like to know among those who began and ended the year using dialysis AND on the transplant list: how many treatments did they receive during the year; what were their Part D drug costs; how many hospital days did they incur and were these hospitalizations due to complications from dialysis (v due to comorbiditites that would persist post transplant).

Those would be the relevant costs per person.

A more general objection to the approach of the authors is that they compare QALY for dialysis directly to QALY for transplant. A transplant is an event and all the costs and the years  of life following the surgery can be said to be associated with that event – the kidney transplant. Dialysis isn’t like that, one doesn't do a year of dialysis. You do dialysis one treatment at a time and each treatment extends your life by the exact amount of time that has passed since the last treatment.

If I am using conventional incenter dialysis on a M-W-F schedule, when I leave dialysis on Monday a clock starts ticking down, it may start at 160 or 200 or 300 hours but whatever it is that is how long I have to live. 44 hours later when I return for my Wednesday treatment the clock gets reset, I get those hours back. Thus by the authors' reckoning incenter dialysis is a good value. Each day of perfect health is worth about $547 ($200,000 / 365), according to the paper for incenter dialyzors we get about 58% of that value or about $317. Thus that $260 bundled payment is producing $634 in quality-adjusted life. No one does a year of dialysis, we do it one treatment at a time, and Medicare is getting a good value for their money.

Unaddressed by the authors are the impacts of doing higher dose dialysis, for instance daily nocturnal home hemodialysis. I would assume that my QALY fraction would rival that of a transplant, while because of stringent MAC rules my cost to the system stays about the same. But of course dramatic puffery (http://www.billpeckham.com/from_the_sharp_end_of_the/2008/03/if-dramatic-puf.html) isn’t allowed for high dose dialysis promotion only for transplant.

And it's Peckham with an H and an M