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Kidney dialysis company expands into the hospital business

November 10, 2014

Critics of America's health care system say it's really a "sick care" system. Doctors and hospitals only get paid for treating people when they're sick.

But that's starting to change. Health insurance companies and big government payers like Medicare are starting to reward doctors and hospitals for keeping people healthy.

So, many health care companies are trying to position themselves as organizations that help people stay well.

One of the latest is DaVita HealthCare Partners, a provider of kidney dialysis services. The company operates 2,152 dialysis centers in the U.S. and 87 in its fast-growing international buisiness.

DaVita is making a move into primary care, and it just announced a joint venture with a hospital company in Colorado and Kansas.

DaVita CEO Kent Thiry says it's like changing the company from being an electrician into a general contractor. "And in so doing," he says, "[We] have a much more comprehensive impact on how the house gets designed, how it gets built, how it gets maintained for the betterment of those who live in the house. That's the simplest way to characterize the change."

DaVita's partner in the new venture is Centura Health, the biggest hospital company in Colorado. Like DaVita, it is also expanding aggressively into primary care and services beyond hospital-based procedures.

Centura CEO Gary Campbell says that in order for his company to keep people healthy, it needs the ability to crunch lots of health data. The idea is to use computer systems to keep track of peoples' health, and flag health problems before they happen. He says DaVita HealthCare Partners is really good at that.

"Our physicians have gone scouring around the country, and believe that Health Care Partners really has the premier analytics."

So, if DaVita wants to grow substantially beyond the current 168,000 dialysis patients it serves now, it needs to expand beyond just kidney care, says Mark Stephens with Prima Health Analytics. In 2012, the company started buying big doctors practices in several states. It's hoping that its experience caring for very sick dialysis patients will help it manage family practices, and now, make hospitals more efficient.

Stephens also says DaVita might also be trying to create a model for Medicare to follow. That agency currently picks up the tab for about 85 percent of all Americans getting dialysis. He says Medicare has been offering dialysis companies opportunities to assume responsibility for those patients' health care beyond dialysis, but that the companies haven't found the deals attractive so far.

If DaVita's new joint venture is successful, and it lowers the cost of care for both dialysis patients and those who aren't as sick, the company may be able to win lots of new business from Medicare and private insurance companies.

This story is part of reporting partnership with NPR and Kaiser Health News.

Copyright 2014 Montana Public Radio. To see more, visit http://www.mtpr.org.

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