In 1972, an extension of Medicare was passed to cover the cost associated with dialysis treatments for any US citizen who was suffering from End Stage Renal Disease. This provision along with the rise of Type II diabetes and hypertension as more common ailments has helped to set the stage for the rise of private specialty providers of dialysis treatment. The two largest in the US are DaVita and Fresenius.
The special carve-out for dialysis in the Medicare legislation means that there is universal coverage for this treatment. This distinguishes renal disease from all other ailments. Uniquely, it's the only condition for which a provider is guaranteed to be paid for the services provided. The government payout to the provider is predictable if not a bit on the low side. With more and more people in need of dialysis care, the pool of potential patients/customers is expanding. Given the low reimbursement rates and recurring nature of the care, many hospitals would prefer not to provide this service except on an emergency basis. Taken together, these factors have created a perfect storm in which private providers like DaVita and Fresenius can flourish.
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