Cost Functions for Dialysis Facilities and the Quality of Dialysis

Published in: Health Services Research, v. 33, no. 6, Feb. 1999, p. 1563-1566

Posted on RAND.org on February 01, 1999

by Jose J. Escarce, Harold I. Feldman

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In this issue of Health Services Research, Hirth and colleagues estimate a statistical cost function for renal dialysis facilities. The authors of this editorial provide background information relevant to the treatment of end-stage renal dialysis patients and then comment on the study's findings regarding case-mix severity, dialyzer reuse, and dialysis dose. They conclude that development of dialysis payment or regulatory policy from studies of cost functions is challenging given the difficulty of interpreting information on costs without data on the relationships among costs, dialysis practices, and the quality of care and clinical outcomes. Policy recommendations need to consider potential tradeoffs between costs and clinical outcomes. Drawing normative inferences and deriving policy recommendations from studies of dialysis costs requires detailed information on ways in which alternative dialysis practices affect the quality of dialysis and dialysis outcomes, as well as on the value that patients and society attach to alternative outcomes. It is also important to anticipate the potential behavioral responses of dialysis providers to changes in incentives and regulations. The National Kidney Foundation's Dialysis Outcomes Quality Initiative is already serving as a basis for the development of quality indicators that will be used by Medicare in certifying and regulating U.S. dialysis facilities.

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