Medicare

Medicare is the predominant health care payer for people with end-stage renal disease--permanent and irreversible loss of kidney function. Medicare's cost for this program has increased, mainly because of the substantial increase in new program beneficiaries enrollees. The average annual rate of increase averaged 11.6 percent between 1978 and 1991. In addition to the rise in enrollment, the mortality rate for new patients decreased. For example, deaths among beneficiaries during the first year in the program fell from 28 percent to 24 percent between 1982 and 1991. Since the program began in 1973, technological advances and greater availability of kidney dialysis machines have meant that persons who were not considered good candidates for kidney dialysis in 1973--those 65 years old or older and those whose kidney failure was caused by diabetes and hypertension--are now routinely placed on dialysis. GAO's review of medical services and supplies provided to all Medicare end-stage renal disease patients in 1991 shows that no separately billable service or supply was provided often enough to make it a good candidate to be considered part of the standard dialysis treatment and thus included in a future composite rate.

GAO found that: (1) ESRD program enrollment has increased at an average annual rate of 11.6 percent since 1978; (2) the major reason for the enrollment increase is due to the increase in ESRD patients age 65 years or older and persons whose primary diagnosis is diabetes or hypertension; (3) advances in technology and the greater availability of dialysis machines have allowed persons that were once not considered to be good candidates for dialysis to be placed on dialysis; (4) decreased patient mortality has also contributed to increased ESRD program enrollment; (5) program costs have increased substantially because of increased ESRD enrollment; and (6) there is no separately billable dialysis-related medical service or supply that is provided frequently enough for inclusion in the new composite rate.