Induced demand in kidney replacement therapy

There are three notable aspects of the current kidney replacement therapy program. First, the number of patients on home dialysis has dropped substantially over the last decades. Second, the rate of transplantation has stabilized in recent years. Third, there is variation in referral rate for transplantation among hospitals. These trends are the result of overutilization of in-center dialysis and that demand for kidney replacement therapy is moderated by suppliers. Current healthcare policy leads to overutilization of in-center dialysis and underutilization of home dialysis and transplantation. This overutilization is the result of supplier-induced demand and leads to suboptimal care for patients and excessive healthcare expenditures. The main drivers of this overutilization are the overcapacity of in-center dialysis beds and the high financial disincentives on empty dialysis beds. Policymakers should address this by reducing dialysis capacity and increasing the capacity of transplantation facilities. This is the first attempt to address the overutilization and the nonalignment of supply and demand by looking at the capacity of in-center dialysis and the financial disincentives for physicians on empty in-center dialysis beds. In our analysis, we conclude that limiting the capacity of in-center dialysis beds is the most effective strategy to better align supply and demand, which will result in better patient outcomes and lower societal costs.