THE PRODUCTION OF DIALYSIS BY FOR-PROFIT VERSUS NOT-FOR-PROFIT FREESTANDING RENAL DIALYSIS FACILITIES

Objective. A study was conducted to determine whether for-profit and n ot-for-profit freestanding renal dialysis facilities differ with respe ct to efficiency in the production of dialysis treatments. Data Source s/Study Setting. National data on 1,224 Medicare-certified freestandin g dialysis facilities were obtained from the Health Care Financing Adm inistration's (HCFA) 1990 Independent Renal Dialysis Facility Cost Rep ort. Data on Medicare patients receiving care at these facilities duri ng 1990 were obtained from HCFA's End Stage Renal Disease (ESRD) Progr am Management and Medical Information System (PMMIS). Study Design. Or dinary least squares regression (OLS) was used to estimate the associa tion between monthly output of dialysis treatments in 1990 and (a) fac ility 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 Cos t Report and the PMMIS databases, respectively. Patient level data wer e aggregated by facility and merged with facility level data. Principa l Findings. For-profit sole proprietorships, for-profit partnerships a nd for-profit corporations each produced significantly more dialysis t reatments per month than not-for-profits, adjusting for quantities for resource inputs and case-mix characteristics. Conclusion. For-profit facilities appear to be more efficient producers of dialysis treatment s than not-for-profits. Further study should address whether other fac tors such as differences in severity of disease or in quality of care are responsible for these observations.