Chronic dialysis is one of the modalities for treating end stage renal disease (ESRD). This research examines the competitiveness of hemodialysis markets and investigates how market competition is related to dialysis provider strategies for service levels and patient selection, and to patient outcomes. It is a cross-sectional study that uses 1990 data from the Medicare ESRD program, which provides insurance coverage for essentially all individuals with ESRD. Findings indicate that the competitiveness of local dialysis markets varies widely, that competition appears to increase facility acceptance of sicker patients, and that competitive effects on facility service strategies for staffing and dialyzer reuse are not strong. Higher productivity does not appear to be associated with poorer patient outcomes. These results highlight the need for better information on how dialysis facilities gain and exercise market power and on staffing effects on patient outcomes.