Kidney Dialysis: The Price of Government Monopoly

The punch line? The U.S. government’s Medicare program is the monopoly health insurer for patients who need the treatment. That goes a long way to explain why the protocol is frozen in time. Can you think of any medical specialty — cardiology, psychiatry, orthopedic surgery, etc. — where you can describe what’s happening today as no different than four decades ago?

Unfortunately, the article gets the history wrong, stating that “when President Nixon signed the 1972 bill establishing the End Stage Renal Disease Program, only 10,000 Americans were on dialysis. . . . Only the wealthy could afford long-term tratment.” USA Today wants us to believe that the government rescued dialysis patients from an awful fate.

The truth is different, according to a fascinating chapter by Richard A. Rettig in the book Biomedical Politics (pp. 176-214). Dr. Rettig reports that effective dialysis was an emerging technology in the 1960s. The innovators founded the American Society of Nephrology in 1966 (p. 181). “Nephrologists trooped to Seattle in the early 1960s to learn how to perform dialysis, and programs sprang up across the country, each growing over time as means were found to finance treatment.” In the late 1960s, “there were fewer than 1,000 patients being dialyzed in the entire country, but that number had been increased to approximately 10,000 by the time the 1972 legislation was adopted” (p. 182)”

USA Today reports that there are 350,000 patients undergoing dialysis today. The overall population has increased by 45% (from 210 million to 305 million), so we can reasonably assert that the eligible population for dialysis in 1972 was about 240,000 patients. At the rate of growth prevalent until 1972, it would have taken seven more years, until 1979, for the private sector to cover everyone. But it’s reasonable to assert with confidence that the pace would likely have accelerated as the technology was broadly accepted as effective.

So, things were actually progressing pretty well until the government crowded out private coverage. I suppose dialysis patients were just unlucky, that significant medical breakthroughs were happening just as the government succeeded in its first phase of taking over Americans’ access to medical services.

If President Obama achieves his goal of completing the government’s take-over of Americans’ access to medical services, expect every medical treatment available in 2049 to be (at best) unchanged from those available in 2009.

This blog post originally appeared in National Review’s Critical Condition.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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