By Brock Hrehor, More Perfect Union
Back in 2009, the CEO of one of the largest dialysis providers in the U.S. made a telling remark about the nature of his business strategy.
“If I had 1,400 Taco Bells and 32,000 people who worked in them, I would be doing all the same stuff,” Kent Thiry, the former CEO of dialysis giant DaVita, told an audience at UCLA.
Though Thiry has since stepped down, the legacy of his controversial playbook—which some experts have dubbed the “fast food” model of health care—lives on. A look into this strategy reveals, in part, why patients with kidney failure in the U.S. are worse off than almost anywhere else in the developed world.
Kidney failure affects roughly 750,000 people in the U.S. and is the country’s 8th leading cause of death, according to the National Kidney Foundation. Of the roughly 100,000 people on the national kidney transplant list, only a fraction are able to find a donor. The remaining patients, with their kidneys unable to remove the toxins from their blood stream, need to undergo dialysis in order to survive.
The dialysis market’s two biggest players, DaVita and Fresenius, control around 80 percent of facilities across the country. They’ve gotten there by snapping up independent clinics, paying doctors in ways that some allege amount to illegal kickbacks, and slashing costs—largely at the expense of their patients and workforce.
The companies’ clinics have seen chronic understaffing, reduction in care quality, and even premature deaths. Ryan McDevitt, a Duke University economist who has studied the dialysis industry extensively, found that hospitalization and death rates increased after DaVita or Fresenius took over, and kidney transplant rates fell by almost 10 percent for patients in those facilities.
“It seems to me that if you want to maintain your cash flow, you don’t let people off dialysis,” journalist Tom Mueller told More Perfect Union. “And that sounds a bit sinister, but it just is a matter of incentives.”
In some cases, DaVita and Fresenius’ fast food ethos creates scenarios where patients are asked to go against a doctor’s orders. In order to drive up revenue, patients are stacked back-to-back. When delays inevitably happen, the packed schedules mean staff have to ask patients to cut their dialysis time shorter than ordered by their doctor.
To get around the orders, the companies ask patients to fill out AMA forms, indicating that they acknowledge they’re going “against medical advice.” This can be damning for patients hoping for a transplant. One DaVita patient told More Perfect Union that she was turned down for a donor organ in part because of the AMAs on her medical record.
More Perfect Union took a deeper look at the industry’s consolidation and what it means for patients, and the dialysis workers fighting for better pay and working conditions.
Watch the full report below:
Reporting by Alec Opperman. See below for a full transcript of the video.
ALEC OPPERMAN, MPU (in front of Taco Bell building): This is the future of health care. Oh, I’m sorry.
ALEC (in front of DaVita building): This is the future of health care. If I was confused, it’s because, according to the former CEO, they have the same business model.
KENT THIRY, former CEO of DaVita: If I had 1,400 Taco Bells and 32,000 people who worked in them, I would be doing all the same stuff.
ALEC: You may not have heard of DaVita, but they’re everywhere, along with their biggest competitor, Fresenius.
ALEC: They’re the biggest players in the dialysis market, which you may not know or particularly care about, but you should, because more than likely, you have a kidney inside of you right now. And nearly 750,000 people a year experience kidney failure, while over half a million Americans are currently receiving the only treatment for kidney failure besides a transplant, dialysis.
ALEC: But taking a look at how the free market ran wild on just this one organ in the human body, can give us some insight into the future of American health care.
RYAN MCDEVITT, economist: They’re doing a lot of things that you might encourage a fast food restaurant to do, like get a lot of patients to the facility each day, cut back on wages, cut back on costs. Turns out that kidneys are a little different than a Crunchwrap Supreme.
CARMEN CARTAGENA, former dialysis patient: I was scared because at that point was when I realized I can die on the chair and I won’t even know it.
ALEC: This is Carmen. Because Carmen’s kidneys didn’t work properly, she needed to show up to dialysis several times a week just to stay alive. For over a decade, Carmen showed up week after week so a machine could do what her kidneys couldn’t, clean her blood. And for most of that time, the clinic performing that life-saving service was a DaVita. Over time, Carmen had witnessed the kind of cost-cutting and decline in quality many of us have witnessed in retail, food, and furniture.
CARMEN: In 14 years, the quality of care diminished to the point where patients were having to suffer needlessly.
ALEC: They cut back on cleaning costs, leaving blood stains on the floor and chairs. They took away the numbing medication Carmen used. The needle sticks are incredibly painful. But one of the most alarming trends is short staffing, asking nurses and dialysis technicians to do more and more.
ALEC (with chemistry equipment): You may think of dialysis as something like a gentle blood draw, but it’s more like an all-out assault on your body. Patients describe passing out, losing dangerous amounts of blood, nausea, vomiting, blood pressure spikes. Is this just a normal part of dialysis?
TOM MUELLER, journalist: High-speed, short treatment time, high ultrafiltration rate dialysis causes cardiac disease, plummeting blood pressure, horrible quality of life.
ALEC: This is journalist Tom Mueller, who spent five years talking to over 100 patients, workers, and kidney doctors to blow the lid on this industry. It is, and I’m not exaggerating, the most horrifying thing I’ve read in years. And I asked him, what happens when you do this kind of high-speed dialysis with not enough staff?
TOM: I’ve talked with Magellan Hanford, who is a former LAPD officer who retrained as a dialysis nurse. He said that at times, as a nurse, he had 17 patients that he was responsible for.
And his description of the day at the office was like working in a MASH unit in a war zone. It was, you know, someone’s cramping here, someone’s coding here, running from place to place. More than once, he described having to put a deceased patient under a sheet and continue treating everyone else because there was just no other option.
CARMEN: You’re just sitting there waiting to see what emergency is going to happen. I’ve bled out, and while I’m bleeding out, there’s a person across from me that is alarming. Who are they going to help first?
ALEC: And it’s not just DaVita. For this story, I spoke to Fresenius workers across California, who all describe the same kind of nightmare scenarios Carmen experienced at DaVita.
MANNY GONZALEZ, dialysis technician: Over the years, I believe it went from, you know, care over profit to, very quickly, profit over care, to get as many patients as they can with the least amount of staffing and hoping that nothing happens.
SAMUEL ESPINOZA, dialysis technician: On a bad day, you can get up to seven, eight, nine patients with one technician.
MANNY: A manager told one of my coworkers, we were complaining because we were short staffed that weekend and nobody came to help and oh, well, nobody died. That was the response.
TOM: One of the nightmare scenarios of dialysis is the patient is hooked to the machine, they go to sleep, the needle dislodges and the alarm doesn’t sound and they bled out. That is something that I’ve heard in my reporting numerous times.
CARMEN: My worst experience on dialysis was one of the times when I passed out. When I came to, I had no idea that that had happened to me and I was scared. At that point was when I realized I can die on the chair and I won’t even know it.
TOM: If they’re understaffed, you don’t have someone watching you every minute. So bad things happen in a short time.
CARMEN: One of the ladies that I used to ride transport with, I saw her walking to the scale really wobbly and shaking. Nobody was around to help her or able to help her because they were running short staffed that day like usual. So while normally they will escort you to the scale, that was not the case that day. At the scale, she fell. And then next thing you know,
the ambulance people are rushing in and they’re putting her in. And they covered her head when they took her out.
KENT THIRY, former DaVita CEO: If I had 1,400 taco bells, I would be doing all the same stuff.
TOM: You have patients on an assembly line crammed in as rapidly as possible and as many shifts as possible to make the facility more profitable.
ALEC: But even when you’re trying to run dialysis like an assembly line, things happen.
A patient’s ride drops them off late. An emergency happens. And to catch up, somebody has to cut their dialysis time short. But here’s the problem. The doctor has prescribed a certain amount of time for each patient to sit in a chair with a certain amount of blood being pushed in and out of their system. If I need five hours of dialysis and I’m only getting four, it’s not cleaning my blood as much as it should. Toxins can build up in my bloodstream, making me sick.
TOM: One of the most unambiguous findings of medical research in dialysis over the last 30 years is that shortened treatment times shorten lives. It’s very straightforward.
ALEC: Now, if a patient wants to cut their dialysis time short, they need to sign something called an AMA, a document basically saying, you want to do this against medical advice. But at DaVita and Fresenius, it’s not always willing.
SAMUEL: We would ask the patient to sign AMA, even though it’s not the patient’s fault. But we have a schedule to keep with the next patient.
RYAN: That’s the fast food model of healthcare, where the chains want patients on that machine
for three to four hours.
ALEC: This is economist Ryan McDevitt, who studied the business of dialysis extensively.
RYAN: If a patient needs to be on the machine longer today, they have another patient supposed to come in for their session, where they’re gonna get another reimbursement. They don’t wanna adjust the schedule to accommodate that patient that needs a more personalized type of care.
ALEC: But here’s the problem. If you want one of the limited kidneys available for transplant, disregarding a doctor’s order looks really bad. One DaVita patient I spoke to claimed she was turned down for a kidney transplant, in part because of these AMAs on her medical record. A kidney transplant means not being trapped in a chair for hours a week, it means living longer. But transplant organizations don’t want to give kidneys to people that they feel won’t follow a doctor’s orders. Another problem in the dialysis industry is that the very system designed by Medicare to keep clinics accountable has been gamed by DaVita and Fresenius.
RYAN: They have an incentive to push out patients who are gonna harm their scores. And so most glaring aspect of this is when a patient is kicked out of the facility. And they’ll find different nefarious ways to do that. We’ve heard anecdotes where they’ll trump up charges on a patient, say they’ve been disruptive or they’ve threatened staff. But what it does is help them look better on the report cards. And that’s important because if they fall short, they will lose 2% of their Medicare reimbursements.
ALEC: Another glaring example of juicing their scores involves ambulances. When a patient gets sent to the hospital from the clinic, it’s a sign something has gone wrong. And so it hurts your score.
CARMEN: My blood pressure shot sky high. I mean, really high. I’m like, shouldn’t we be calling the ambulance? They’re like, no, we’re gonna get it down. We’ll get it down, we’ll get it down. I’m thinking if you don’t get me to the hospital, I’m gonna have a damn stroke. I never got an ambulance until I put my foot down. And I said, either you call an ambulance or I will, because I really don’t give a damn about DaVita’s numbers.
ALEC: I’ve actually heard an incredibly similar story from another patient at an entirely different DaVita location. Allegedly, a man was repeatedly fainting while another patient pleaded with staff to call an ambulance.
RYAN: Whenever there’s a dollar at stake, the for-profit chains do everything they can
to chase that dollar, even if it comes at the expense of patient care.
ALEC: Now, if you’re wondering why these patients just can’t go to another company for dialysis instead of the emergency room, well, DaVita and Fresenius have been on a buying spree.
And Ryan McDevitt studied what happens when they buy up other clinics.
RYAN: We use this quirk in Medicare data where we could look at the same facility, same patients before and after Davida and Fresenius took over, hospitalization rates went up by about 6%, death rates go up 3%, and most alarming, transplant rates for the patients during their first year of dialysis fell by almost 10%.
TOM: Now you think, well, why would that be? It seems to me that if you want to maintain your cash flow, you don’t let people off dialysis. That sounds a bit sinister, but it just is a matter of incentives.
ALEC: More alarming is that when patients do push back and advocate for themselves, the consequences are sometimes dire.
TOM: In my experience as a reporter, patients who speak out about their rights, patients who are a little bit difficult, patients who don’t agree immediately to be passive subjects of care, are quite often targeted for intimidation and sometimes pushed out of their clinics. When you’re pushed out of a clinic as a dialysis patient, your lifeline is cut.
ALEC: This sphere has been a consistent throughline in the history of dialysis. In fact, 25 years ago, Republican Senator Chuck Grassley held a hearing on dialysis and couldn’t find many patients willing to go public. He expressed his frustration by saying, ‘they must dialyze to live.
That fact alone has discouraged many patients interviewed by this committee from coming forward today to publicly testify.’
TOM: Quite often, because you’ve been discharged, you’re not accepted to other clinics. You’re blackballed in the area where you live. So your last resort is the emergency room, but emergency rooms aren’t set up for chronic care. So they don’t actually treat you until your blood is so toxic, your whole physiology is so messed up that you’re about to die. Of course, this yo-yo effect on the human body is disastrous and leads to, you know, rapid demise.
RYAN: DaVita and Fresenius collectively today own about 80% of facilities across the country. They systematically gone and bought up over a thousand independent clinics.
ALEC: One way they’ve maintained this duopoly, Ryan alleges, is by bribing kidney doctors.
RYAN: They’re paying kickbacks to nephrologists to get them to refer more patients to the facility. So DaVita and Fresenius have collectively paid over a billion dollars in settlements and fines over the past decade or so. They view it as a cost of doing business. For them, it’s like paying their rent or paying employees.
ALEC: With their duopoly cemented, DaVita and Fresenius have been able to aggressively
enshittify dialysis with no repercussions. Sam and Manny have been organizing with United Healthcare Workers to fight for better pay and more staffing at Fresenius and DaVita. Manny alleges Fresenius has been retaliating against workers involved in unionizing. Carmen is lucky. She got a kidney transplant, but she is still fighting for better working conditions for the dialysis workers that kept her alive.
CARMEN: They take care of us. They’re responsible for my kidney. My brand new kidney is going to be two years old tomorrow.
ALEC: If you have kidney failure in the United States, you’re worse off than almost anywhere in the developed world.
TOM: Patients in America die sooner than anywhere else in the developed world. They have a 20% annual mortality rate. Compare that to Europe, which is 12 to 15, compare that to Japan, which is 6%. It’s radically, radically different. So American patients die two to three times faster.
ALEC: The dialysis industry strongly objects to the way Tom characterized their business in his book. They did so through lawyers.
TOM: I sent some of the stronger statements to the major dialysis companies. And some didn’t answer, but others, via their lawyers, wrote back and said, basically, I was full of shit. I was completely wrong about everything. And to me and to my publisher, that was an attempt to block publication of the book. They didn’t say it in so many words, but they suggested this was libelous.
ALEC: In 2019, before Ryan McDevitt’s damning publication about dialysis chains, the editors of that journal received a lengthy email from a DaVita executive. It includes a laundry list of complaints that, if true, would likely have gotten the paper retracted, according to McDevitt. After he and his co-authors responded, an editor called the complaints silly and confused. The DaVita and Fresenius model are not unique to dialysis. They just have the perfect set of customers, people who need to show up three times a week or die in short order. But hospitals, doctor’s offices, pharmacies, even veterinary clinics, are being consolidated in similar ways.
TOM: That’s one of the few things that everybody can agree on, right, left, and center, is that our healthcare system is broken. And dialysis is just sort of the worst case scenario of what can happen when you totally focus on profits and on Wall Street and turn the other cheek to human harm.
ALEC: The model is the same. Buy up local businesses and aggressively cut costs. It doesn’t have to be this way. Nearly every other country in the world has figured this out.
ALEC: Thank you so much for watching. If you work in dialysis or any other part of the healthcare industry and have a story to share, we’d love to hear from you. Send us a line at stories@perfectunion.us.
