Trump just announced a new approach to caring for millions of people with a devastating disease, and it could upend a $114 billion market
- President Donald Trump will release an executive order today that could transform care for people with kidney disease.
- The goal is to encourage more home-based kidney care and to lower the burden on the Medicare budget. Medicare pays for most care for people with severe kidney disease.
- Around 37 million people in the US have kidney disease with 12% using home-based kidney care. The Trump administration wants to increase this number to 80% by 2025.
- Analysts at SVB Leerink, led by Ana Gupte, said that some big health insurers like CVS Health and UnitedHealth Group stand to benefit from the executive order.
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President Donald Trumpjust signed an executive order that could transform how the US cares for people with a costly and devastating disease.
Trump's order encourages more home-based care for people with kidney disease, with the goal of lowering US spending on people whose kidneys aren't working. The US government pays for the vast majority of care for people with failing kidneys through the Medicare program.
The US Medicare program spent about $114 billion caring for people with chronic and end-stage kidney disease in 2016. That's more than 20% of traditional Medicare spending that year. Around 37 million people in the US have chronic kidney disease, which is the ninth leading cause of death.
"We are determined to give you the best treatment in the world," Trump said during the signing of the executive order. "We have made a lot of progress and we're with you every step of the way.
The big business of caring for people with kidney disease
Providing care for people with kidney disease is a big business in the US. For-profit companies DaVita, Fresenius and American Renal Associates operate centers where people can get dialysis, a procedure that filters the blood for people whose kidneys are failing.
Analysts at SVB Leerink led by Ana Gupte said that American Renal will be negatively impacted by the order as the company has not invested as much in home-based care, while competitors DaVita and Fresenius have been investing in this area of kidney health.
The stocks of the dialysis companies declined yesterday, after Politico reported on the Trump administration's plans late on Monday.
Radu Sigheti/ReutersA nurse prepares a dialysis machine.
In a statement, DaVita said it's already the largest provider of in-home dialysis in the US.
"We will continue to work with the Administration and Congress to launch programs that address broader care opportunities," said Javier Rodriguez, CEO for DaVita Inc in a statement released yesterday. Fresenius and American Renal didn't return requests for comment.
Big insurance companies including CVS Cigna, UnitedHealth and Anthem, could benefit from the executive order, Gupte said, because they're investing in home-based dialysis. In-home dialysis is typically less costly, and can be more convenient for patients.
Trump's executive order
Trump's executive order has three main parts.
The first is preventing disease progression by curbing diabetes and hypertension, which directly result in kidney health issues. Their goal is to reduce end-stage kidney disease.
The second key area is to provide an increase in access to kidney transplants by modernizing the system and regulations. The administration outlined actions to expedite the process of kidney matching to increase transplants.
The third key area is to give patients more choices and affordable treatments. This includes improving home dialysis treatment and improving kidney transplants. Currently 12% of people with kidney disease receive home dialysis, according to the Trump administration. The executive order will call for 80% of people to get care at home by 2025.