LOOKING UPON THE WATER

Is It Wrong to Make a Profit?

LAST FALL I wrote a letter to the New England Journal of Medicine.

Usually I do not write letters to regional medical journals. But in this case I made an ex­ception. I wrote to the NEJM about profit and the endstage renal disease program. I'm the first to admit that I am no expert on the subject. I am an academic physician, trying to understand a few facts, if facts they are.

You know what kind of a physician an aca­demic physician is, don't you? Webster's Col­legiate defines academic as "very learned but inexperienced in practical matters," and, "having no practical or useful significance." That's what kind of physician! After my letter appeared, several people called to tell me that I didn't know what I was talking about because I was in aca­demic medicine. Because I was an academic physician.

The callers, I suppose, might be right. I don't know if there are many physicians in academic medicine who know a lot about profit. I, for one, always have thought of it as something practical and useful. Webster's says that profit is a "valu­able gain." That's practical, isn't it? Webster's also says that profit is "the compensation accruing to entrepreneurs for the assumption of risk in business enterprises as distinguished from wages or rent." Lest I be accused of liking that definition, I don't! I wouldn't think that the dialysis for profit people like it either. The definition is misleading! There isn't any risk to profit when the government pays the bills, is there?

People in the dialysis for profit business did not like my letter to the NEJM. They said that my attitude was sanctimonious. I tried to explain to them that I did not consider myself an expert on profit. That I had had to look the word profit up in my dictionary. That I consider profit makers to be practically valuable and academicians to be practically invaluable.

Or is the word unvaluable? I must look that one up, too, when I have time.

I have been faced with the profit and ESRD

© 1982 by The National Kidney Foundation. Inc.

0272-6386/82/040204-02$01.00/0

question since 1976 when I began a three-year term as chairman of our network. Dave Ogden and I were the nominees. I got nine votes. He got six votes.

I'm still not sure who won. But ever since that time, the profit issue has

been around. As is the case in all 31 other net­works, we have "for profit" and "not for profit" facilities in our network, too. When Drs. ReIman and Reddie wrote about profit and ESRD in a 1980 NEJM article, they looked at the subject improperly. States do not control quality of care and treatment modalities for the ESRD program. Networks do. I corresponded with those gentle­men on the matter.

The gist of the NEJM letter had to do with the fact that the Health Care Financing Administra­tion has issued data for the years of 1979 and 1980. Those data indicate that the greater the pro­portion of "for profit" facilities in a network, the fewer of that network's patients have received renal transplants or been placed into home dialysis. Take 1979 as an example. A network (perhaps theoretical) with no "for profit" facili­ties had transplanted 7% of its patients. It had sent 21 % of its patients home for dialysis. In con­trast, a network with 50% of its facilities identi­fied as "for profit" had transplanted just over 3% and had sent home for dialysis about 9% of all of its patients.

The regression equations derived from HCFA's data were as follows: The per cent of a network's patient population receiving transplants (y) is in­versely related to the per cent of "for profit" facilities (x) by the equation y = 7.33 - 0.08x. The per cent of a network's patient population on dialysis at home (y) is related to the per cent of "for profit" facilities (x) by the equation y = 20.78 - 0.24x.

Now, we all know that figures do not lie. These figures are no exception. Any fool academician can extrapolate from these equations to show that when 100% of any network's facilities operate on a "for profit" basis (substitute 100 for x), no patients in that network will be dialyzed at home, or sent for transplantation, either.

That is what the opponents of "for profit" dialysis have been saying all along.

204 American Journal of Kidney Diseases, Vol. I, No.4 (January), 1982

LOOKING UPON THE WATER

I am proud to show them how to prove their case!

Let me return to a more serious vein. One argument that I have received on the heels of my letter is that all dialysis units really operate on a "for profit" basis, no matter whether they admit it or not. If that were so, the HCFA data should not reveal any differences in patterns of patient care between the "for profit" and "not for profit" facilities. A difference is there. Why?

Another position has argued that "for profit" facilities have sicker patients, patients less suit­able for either transplantation or home dialysis. That case, even if true, probably cannot be proved. I don't believe it. I would rather be told that patients in "for profit" facilities are more content with their dialysis care and want to stay where they are. I might believe that.

A third argument cites the possibility that relatively fewer patients from "for profit" facilities get transplanted or dialyzed at home because those facilities take care of relatively fewer of the networks' total patient population. To answer that one I wrote to HCFA. Their re­sponse was prompt and to the point.

What HCFA told me was this: Of 1029 dialysis facilities operating in late June, 1980, 340 designated themselves as "for profit." Of the nation's 49,646 dialysis patients at that time, 18,629 were cared for in "for profit" units. Stated differently, while some 33.0% of the nation's dialysis facilities are "for profit," some 37.5% of the nation's dialysis patients receive their care in those units. "For profit" facilities do

205

not care for fewer of our dialysis patients. A net­work by network analysis leads to a similar result and conclusion.

An argument that I have read defends "for profit" dialysis on the grounds that "for profit" facilities pay taxes. They dialyze for fewer dollars in spite of their "for profit" status. Now, really! Money paid as taxes does not go to buy endstage renal disease care. Therefore it is not fulfilling federal intent but instead is being diverted from the ESRD program. Do "for profit" facilities actually spend less per patient on ESRD care? Could it be that "for profit" facilities would pro­vide even better care if they did not have to pay taxes? I find both arguments somewhat ludicrous.

I do not know why the HCFA data, when analyzed on a network by network basis, reveal significant inverse correlations between the per­centage of "for profit" facilities in a network and its rates of transplantation and home dialysis. Some of you might know or like to speculate. Drop me a line at the address below and I will see that the more thoughtful (nonacademic?) remarks receive equal space in a future issue of this journal. As its title indicates, it is targeted to a nationwide readership.

Kenneth D. Gardner, Jr., M.D. Professor of Medicine

Chief, Division of Renal Diseases

University of New Mexico Department of Medicine

School of Medicine Albuquerque, N.M. 87131