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by Matt Brady & Jess Carroll
There have been some business moves recently in the renal care sector that may well signal that home dialysis is set to become more common. In February this year, NxStage, one of the world’s leading manufacturers of home hemodialysis (HHD) machines, was bought by German renal care giant Fresenius Medical Care in a $2 billion deal.
Back in the 1970s, 40% of dialysis in the US took place in patient homes but this lost popularity in the 80s and 90s in favour of patients travelling to purpose-built medical centres. Disadvantages of home hemodialysis (HHD) included the fact that bulky devices and their associated consumables took up a lot of space in homes and patients struggled with device maintenance. However, recent developments have led to smaller machines with streamlined consumables, and which are easier to clean and disinfect.
Fresenius Medical Care is the world’s largest provider of dialysis products and services and, as such, is well placed to drive the market. Its takeover of NxStage is, we believe, a move which could spark an industry-wide migration to home dialysis.
The provision of home dialysis requires support staff to check up on patients regularly and to deliver both training and the co-ordinated delivery of consumables to the patient. However, this may not be such a barrier to change: existing dialysis centres could easily be outfitted to host training events and support staff normally employed to monitor patients in-centre could instead offer home visits. Dialysis centres are already well dispersed in communities and well placed to support home dialysis. They could also benefit commercially from an ability to grow their patient base without requiring more seats.
Home dialysis has many advantages for patients compared to the more usual In-Centre Hemodialysis (ICHD). Treatment out of the home is notoriously time-intensive - patients typically have three sessions per week, each lasting around four hours, plus there is the travel time to and from the dialysis centre. Home dialysis, by contrast, has significant lifestyle benefits. It allows the patient to have a flexible treatment schedule with no need to travel, allowing them to stay in employment/education and generally have far less disruption in their daily lives.
Additionally, research indicates that shorter, more frequent dialysis may offer medical benefits, too. It reduces post-dialysis recovery time, improves overall sense of wellbeing, improves blood pressure and reduces the amount of medication the patient needs to take. Alternatively users may choose to maintain the 3x per week schedule but conduct overnight sessions, benefitting from a slower, gentler treatment as well as the obvious lifestyle benefits. In both cases users can avoid the dreaded “dialysis weekend” inherent in the schedules of most dialysis centres.
However, it’s not just patients that look set to drive the demand for home dialysis. Payers are also leaning towards it, due to its potential for cost reductions and cost incentives. As long ago as 2011, the USA Centers for Medicare and Medicaid Services (CMS) had already adopted a new payment system for their Medicare renal disease programme which favours home dialysis. This gave dialysis providers more financial incentive to offer home dialysis services and already seems to have had an effect in the US and may also have contributed to growth in home dialysis utilisation generally.
The statistics are certainly beginning to bear this out. In 2008, 93.5% of US dialysis patients received their treatment in centres but by 2016 that figure had dropped to 89%. It is also worth noting that the overall numbers of US patients receiving dialysis has risen from 108,945 in 2008 to 121,209 in 2016, which gives a sense of the rising demand for this treatment.
In the UK, the National Institute for Health and Care Excellence (NICE) already recommends that patients are given a choice over the setting and type of dialysis. In terms of cost, NxStage has reported to NICE that the average price per treatment for their System One home dialysis device is just 60% of the current NHS tariff price for home dialysis, a strong financial incentive to make the switch.
Back in 2009-2010, a study assessed that chronic kidney disease care per patient receiving dialysis can be crudely estimated at £27,000 per annum. In that same year, dialysis cost the NHS just over half a billion pounds a year (£504,680,228) with transport of the patient to and from dialysis centres costing just over £49.5 million.
As of Dec 2013, just over 27,000 UK patients were receiving dialysis, with 5% (1,113) being treated at home. The overall number of people on home hemodialysis has increased by 3% since then, with 1,256 patients receiving home treatment in 2016.
Although home dialysis is clearly an attractive alternative, there are many perceived barriers that may discourage patients from choosing it. Many cite fear of losing the in-centre back-up from staff and a reluctance to self-cannulate (introduce a thin tube into their veins). Other factors include wanting to separate home life from medical life and not wishing to burden family/friends with having to assist with treatment.
However, it is likely that these barriers can be overcome with innovative new devices and systems, adequate education, including motivational training to empower the patient, as well as supportive medical staff. Another barrier which may be more difficult to overcome, though, is a lack of suitable accommodation for home dialysis, especially given today’s trend for smaller new homes and expensive house prices. One recent study of patients from a predialysis clinic in London found that only 29% of homes assessed were suitable for peritoneal dialysis and only one home was suitable for home hemodialysis.
As well as NxStage, there are several more manufacturers of home hemodialysis equipment well worth keeping an eye on. These include Quanta Dialysis Technologies (UK) which makes the table-top SC+; Outset Medical (USA) with its mobile Tablo machine and French company Physidia’s S3 monitor. Baxter, another large US manufacturer of traditional dialysis machines, invested around $132 million last year in Outset Medical, another sign that well-established players in renal care are feeling the pull of home dialysis.
Chinese companies Wego, Biolight and Bain Medical were in all attendance at last year’s ERA-EDTA international conference. So far, these companies have focused on the Asian dialysis market. Will their need for continued growth, alongside the much-discussed slowdown in the Chinese economy, drive a strategy of expansion into established markets?
Like Fresenius (and to a lesser extent B.Braun), Wego both produces dialysis machines and operates dialysis centres. Wego could use its experience and resources to open dialysis centres in Europe or the US in direct competition to Fresenius. Biolight produces traditional dialysis machines and related consumables. It is likely to be able to offer lower costs than European or American companies and may be attractive to payers.
Bain, by contrast, solely manufactures blood purification consumables but we noted that it displayed a functional pump at last year’s conference so is clearly growing its business. Bain already has well-established relationships with many renal care companies outside of China, and thus may be in a position to expand into machines, certainly in China first but given their impressive expansion to date we shouldn’t bet against more global ambitions in time.
So far, Wego and Biolight haven’t made any visible moves towards home dialysis so companies like Fresenius have the advantage in this field, at least for now. As home dialysis becomes more popular with patients, we predict that promoting home dialysis could be an effective commercial response by established Western and Japanese players to new competitors entering the renal care market.
It is very likely that the race to dominate the home dialysis market may drive innovation, reducing running costs and increasing patient benefits as well. All in all, this is an interesting time for the renal care industry and one which, we anticipate, will lead to better treatments for patients.
Partner & Head of Medical Therapy
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