*Estimated Elwood portion of Madison County with a populatiuon of 130,669, which includes the city of Anderson with a population of 59,459.

M. Burch, CTR

1/31/94

Chairman STARK. Dr. Owen.

STATEMENT

OF WILLIAM FRANKLIN OWEN, JR., M.D., ASSISTANT PROFESSOR OF MEDICINE, HARVARD MEDICAL SCHOOL

Dr. OWEN. Thank you. Good morning. I am Bill Owen. I am, as my colleague described it, an ivory tower academic physician who does practice in the trenches. End-stage renal disease is disproportionately a malady of racial minorities, especially of African-Americans. Despite comprising only 12 percent of the American population, in excess of 35 percent of the population with end-stage renal disease are African-Americans, the remaining 5 percent in that group being Latinos and Native Americans.

The incidence of end-stage renal disease among African-Americans is the highest of any racial group, being approximately fourfold greater than for whites. Further, renal disease has culminated in end-stage renal stage occurring at significant younger ages in minority Americans.

Despite the prevalence in the demographics of the incidence of end-stage renal disease among minorities, there is apparent unequal access to kidneys for transplantation. In 1989, for example, only 20 percent of the transplant population was African-American, with waiting times for organs that were twice that of white Americans. As these trends have continued, we have seen greater numbers of minorities on dialysis for longer periods of time than their white compatriots, and morbidity and mortality are increasingly linked to the quality of care that is provided by the nephrologists and by the dialysis facility providers.

It is in this spirit that I urge the subcommittee to avoid a shortsighted global financial restructuring of the end-stage renal disease program that may effect short-term savings, but will adversely influence the delivery of adequate and appropriate care for this vulnerable population.

In 1983 and again in 1986, substantial reductions were made in the level of reimbursement to dialysis facility providers. In parallel with these reductions, we saw a progressive deterioration in patient survival, ancillary services, increased patient morbidity and diminished patient morale. Annual patient mortality prior to 1984 was consistently less than 20 percent and increased to 24 percent by 1987, a value which is greater than twofold in excess of other industrialized nations with end-stage renal disease programs.

We also must interpret these findings as evidence that the quality of care under the end-stage renal disease program has been compromised by cost-containment efforts in the setting of rampant inflation in the medical sector. These cost-containment efforts include the use of less skilled and fewer dialysis care staff, fewer social workers and dieticians with abbreviated hours onsite, greatly shortened dialysis time and the reuse of single-use designated equipment.

However, for minority patients, the dialysis facility has a far greater role than simply to provide equipment and staff for the performance of dialysis. Many of our patients are financially, educationally and socially disadvantaged, and therefore, the nutritionists and socialworkers are critical allies in the provision of comprehen

sive support and care. The declining numbers of dialysis support personnel are finding themselves performing more crisis intervention and therefore less ongoing support.

Dialysis facilities that are financially unsound cannot expend funds on new equipment and medications that improve the quality of life and, by extrapolation, patient rehabilitation. In that minority patients are the most vulnerable of the end-stage renal disease population, adverse trends in this group heralds danger for the entire American nephrologic population. To execute alterations in the end-stage renal disease program that will effect enhanced cost-containment while augmenting patient survival, minimizing morbidity and intensifying their rehabilitation, legislation should be enacted. First of all, to provide a fair inflation-adjusted reimbursement schedule for the nephrologist and the dialysis facility operators; that, second, affords adequate reimbursement to the patient and to the facility for mandatory nephrologic-directed medications; and third, assures equal access to all treatment modalities, especially renal transplantation.

Initial realization of these goals can be achieved acutely by, first of all, extending the end-stage renal disease secondary payer period to 24 months or longer to appropriately increase cost-sharing with the patients' private insurers; second, defining a precise bundle of patient care services that are to be provided by the nephrologist and incorporating a global, all-inclusive capitation payment schedule; and third, folding the funds for erythropoietin into the composite reimbursement to the dialysis facility providers.

These proposed modifications in the structure of the end-stage renal disease program will immediately enhance the quality of life for its participants, especially those of color. The disproportionate number of minorities who are captive to dialysis look to you as a voice of advocacy where previously we have had none. I hope that you will advocate a plan of fairness, a plan of equity, as you review these critical issues.

STATEMENT OF WILLIAM F. OWEN, JR., M.D.

ASSISTANT PROFESSOR OF MEDICINE

HARVARD MEDICAL SCHOOL

Introduction

As this Subcommittee considers the reform of our troubled and often inequitable health care system, I strongly urge that Medicare's unique, disease-targeted End Stage Renal Disease (ESRD) Program be maintained in its current form, but be strengthened by a financial restructuring. The Program's total annual cost of $6.6 billion (1991) poses an obvious singular target for cost savings. However, I have grave concerns for the influence of further rate reductions on the morbidity, rehabilitation potential, and mortality of dialysis patients, especially for the very large number of uniquely vulnerable minority patients. It is in this spirit that I urge this Subcommittee to recognize that for 20 years, this public entitlement has been a successful, albeit imperfect archetype of impartial health care.

As I assess the End Stage Renal Disease Program from my perspectives as an African-American academic nephrologist, I find that it has been exemplary of the aims for which it was championed at its inception in 1972 by Representative Wilbur D. Mills (D-Ark.) and Senator Vance Hartke (DInd.). Because of a scarcity in treatment resources and a general lack of insurance coverage for this treatment modality before 1973, remarkable inequity in access to this modality was evident; the dialysis population was disproportionately composed of young, white males that were highly educated, married, and wealthy. However, as a direct outcome of the End Stage Renal Disease Program, life-saving nephrologic care is now available to virtually every American. However, in my more critical roles as both the Medical Director and as an active, practicing nephrologist in two large and demographically contrasting outpatient dialysis facilities--one that is suburban and serves predominantly an upper middle class, educated white population, and the other a unique inner city facility that serves a financially disadvantaged minority population--I am acutely aware of the expanding deficiencies within this Program. Although neither patient population can tolerate a "cost savings" global financial restructuring of the End Stage Renal Disease Program, my minority patients are particularly susceptible to legislative actions that adversely influence the delivery of adequate and appropriate care.

To execute alterations in the End Stage Renal Disease Program that will effect enhanced cost containment, while augmenting patient survival, minimizing patient morbidity, and intensifying their rehabilitation potential, legislation should be enacted that: (1) provides a fair inflationadjusted reimbursement schedule for the nephrologists and the facility operators; (2) affords adequate reimbursements to the patients and the facility for mandatory nephrologic-directed medications; and (3) assures equal access to all treatment modalities, especially renal transplantation. Initial realization of these goals can be achieved acutely by: (1) extending the End Stage Renal Disease Secondary Payer Period to 24 months or longer, to appropriately increase cost sharing by the patients' private insurers; (2) defining the bundle of patient care services that are to be provided by the nephrologists and incorporating a global (all-inclusive) monthly capitation payment schedule for these services; and (3) folding the funds for erythropoietin into the composite reimbursement to the dialysis facility operators. These proposed modifications in the structure of the End Stage Renal Disease Program will immediately enhance the quality of life for all its participants, especially for those of color.

America's ESRD Program as a Paradigm for Health Care Reform

The End Stage Renal Disease Program has been remarkably successful in several areas that are laudable goals for any model health care program. The End Stage Renal Disease Program is: (1) virtually universal and relatively comprehensive; (2) functions coherently for the patients; (3) quality of patient care is closely monitored and continuous improvements implemented; (4) it is structured to contain costs; and (5) the Program is paid for fairly. Approximately 93% of all patients with end stage renal disease is eligible for Medicare coverage of their nephrologic care. The remaining few patients who are not insured can obtain additional funding for nephrologic care through the Veterans Administration, the Indian Health Service, and state Medicaid programs. An attestation to the success of the universal and comprehensive design and penetration of the End Stage Renal Disease Program is the lack of correlation between personal income and mortality secondary to renal failure. Unlike most other "metaphor(s) for modern technological medicine,"