Mr. Chairman and distinguished members of the Subcommittee, I am grateful for the opportunity to provide testimony on behalf of DaVita.  I am Kevin Trexler, Division VP of DaVita. I manage more than 80 dialysis clinics in Virginia, DC, and Maryland. My career path has also included six years as a deployed Navy- trained advanced degreed nuclear Submariner, working closely with various military and other intelligence agencies.

DaVita is a leading provider of dialysis services in the United States. We treat more than 117,000 patients each week in more than 1,500 centers, which represents nearly one-third of patients with End Stage Renal Disease—or ESRD—in the United States. We are also a recognized leader in achieving excellent clinical outcomes, consistently demonstrating outcomes that are among the best when compared to national averages. We have a proven track record of success in providing the best possible patient care through our innovative approach to collaborating with our many partners. At DaVita we also recognize the value in supporting the concept of community and especially those who serve and have served in the military.  DaVita employs over 800 Veterans, as well as many active duty, guard and reserve troops. We have a long tradition of honoring those teammates at DaVita who have served, and are serving, as well as their families at our annual nationwide meeting.

DaVita is privileged to care for more than 2,000 of our nation’s Veterans in our dialysis clinics across the country.  Because VA’s own network of dialysis facilities is not sufficient in capacity or geographic scope to care for many thousands of the Veterans with ESRD, we and other dialysis providers deliver dialysis treatments in Veterans’ communities when VA cannot provide reasonable access or lacks the in-house capability to provide this life-saving treatment. More than 20 percent of those Veterans in rural Virginia have no alternative treatment options within 20 miles. We consider ourselves a partner of VA and are committed to providing excellent quality, exceptional clinical performance, and outstanding customer service to all these Veterans whom we serve.

Our testimony today addresses the Subcommittee’s interest in understanding the quality of and access to dialysis care provided to Veterans in rural and underserved areas.

Veterans receiving dialysis treatment are frail patients often with multiple illnesses. They cannot survive without dialysis or kidney transplants. Thus, patient access to care is critical. Patients receive three treatments per week, every week of the year, each one requiring four hours of staff-assisted care. Moreover, the treatment requires a highly skilled workforce including a dietitian, a social worker, and other ancillary service providers, as well as the use of high tech medical equipment and supplies. Dialysis treatments are dependent on high-cost pharmaceuticals - including one key drug that is still under patent and has no generic, less expensive alternatives. Both the provision of the treatments and the financial aspects of dialysis treatments are unique.

Veterans with ESRD who live in rural or underserved areas often have no other treatment options within many miles. Any disruption to a Veteran’s reasonable accessibility of a dialysis center will lead to longer travel times for their dialysis treatments, which, in turn, can have a significant impact on health outcomes. A study published in the April 2008 American Journal of Kidney Diseases found that patients traveling more than 60 minutes each way for dialysis treatments had significantly higher mortality levels and a lower health care quality of life.

Like many rural healthcare providers, DaVita’s ability to receive sustainable reimbursement is critical to ensuring that access to care is preserved. The economics of the dialysis industry are very fragile, particularly in facilities that serve rural areas. The average rural dialysis clinic operates at a loss. Nearly 90 percent of patients are Medicare or Medicaid beneficiaries, and these reimbursements are insufficient to cover the cost of the treatments. Given the insufficiency of Medicare reimbursement, the dialysis industry relies on a unique “social contract” in which other payors subsidize the Medicare rates to ensure adequate access to care for all patients.

Here in Virginia, we provide care to Veterans through VA-established negotiated contracts. During the last 10 months, VA has awarded negotiated contracts with a number of dialysis providers throughout the country, covering most areas in which Veterans are authorized to receive Purchased dialysis care treatments.  These contracts, if maintained, will continue to provide mutually agreed-upon, sustainable reimbursement.  The VA, and not providers, will ultimately decide if these contracts continue for the complete five-year duration.  The VA has not assured providers that these contracted rates will remain in effect, which results in the industry concern about VA’s commitment to maintain existing contracts.

DaVita recognizes and supports VA’s goal to standardize reimbursement for the purchase of non-VA provided healthcare services and to reduce its costs in a way that would not threaten veterans’ access to care.  DaVita believes that there is a way to achieve cost savings and standardization of payments, while concurrently improving the health status of Veterans with ESRD who are authorized by VA to receive their dialysis and kidney-related care in the community.  Since last fall we have proposed to VA that they implement a patient-centered, integrated care management dialysis program for these extremely sick Veterans.  The result would be:

• avoidance of rural clinic closures,
• improvement in the health status of Veteran dialysis patients, and
• the creation of a patient-centered approach for managing the health of Veterans with kidney disease.  

It is important to consider that dialysis is only about a third of the total cost of care for these extremely sick Veterans; the majority of costs come from avoidable ER visits and hospital stays, and other costs due to infections and missed treatments.  An integrated care management program would focus on key interventions, such as the placement of fistulas for dialysis access, which have proven to reduce the instances of hospitalizations for patients.  This not only results in improved health and quality of life for Veterans, but would also reduce VA’s overall Purchased Care costs for these patients.

In its recently released Broad Agency Announcement, the VA included a request for industry to submit proposals related to the VA Innovation Initiative.  VA is seeking solutions from the health care industry that would improve the provision of dialysis care in community clinics and in Veterans’ homes. We are delighted that VA has reached out to the kidney care provider community and will submit our proposal for consideration before the end of the month.  Because DaVita understands that investments in prevention and coordination of care leads to improved outcomes and lower total costs, our proposed coordinated care program promotes patient-centered care for veterans with ESRD who have been authorized to receive Purchased Care. This integrated care management program will combine lab, pharmacy and medication therapy management, vascular access care, vaccinations, case management and access to diet and nutrition counselors and nephrologists. The program will promote utilization of and coordination with VA services where possible, and will collect and provide clinical data to VA through Electronic Medical Record technology when possible or in another format if VA prefers.   VA currently does not receive clinical data from providers in the Purchased Care Program.

In addition, DaVita has expertise in providing and remotely monitoring dialysis care and treatments in patients’ homes that would be of particular benefit to patients in rural areas.  For instance, in-home biometric monitoring will allow us to monitor a patient's key health data in a remote setting.  If an abnormal value is recorded an alert will be sent to one of our nurses who can either call or video conference with the patient to determine what medical actions are needed.  This allows us to get real-time data without sending a nurse to the house.  This system will also allow us to provide educational materials and reminders - including medication reminders, appointment reminders, etc - to the patient and care givers.

We also have the ability to take advantage of mail order or in-center delivery of medications so patients do not have to make extra trips to the VA or local pharmacy.

An integrated approach would be beneficial in many ways. Patients in similar programs, such as ongoing Medicare pilots, have experienced increased quality of life, greater satisfaction with the care they receive, and higher levels of engagement in their own care. In addition, they have benefited from preventive care measures such as immunization, lower rates of infection, greater compliance with medication therapy regimens, and lower hospitalization rates. VA is known for its progressive approach to health care delivery, and the Department can maintain this same approach with dialysis care for Veterans in the Purchased Care Program by implementing an integrated care management initiative that benefits both patients and taxpayers. As you may know, VA is moving to a patient-centered medical home approach for all VA facilities.  This would be the first step in the Purchased Care Program to mirror what VA intends to accomplish within VA facilities in the next two years.

On behalf of DaVita, I would like to thank you for your interest in the care that we provide to Veterans and for your commitment to ensuring that Veterans in rural areas continue to receive the quality of and access to the care they have earned. We are grateful to the Subcommittee for your leadership in seeking new ways to promote quality care for all Veterans and especially the unique population of Veterans with kidney disease whom we serve.

I would be happy to answer any questions you may have.