Better Solutions for Healthcare

KHN Business Is Booming for Dialysis Giant Fresenius. It Took a $137M Bailout Anyway.

By Jordan Rau and Rachana Pradhan

August 10, 2020

As the coronavirus pandemic paralyzed most nonemergency medical practices this spring, the dialysis business, vital to the survival of patients with kidney disease, rolled ahead and in some cases grew.

Yet when the Trump administration sent billions in federal relief funds to medical organizations, at least $259 million went to dialysis providers, a KHN analysis of federal records found. Of that, kidney care behemoth Fresenius Medical Care accepted more than half, at least $137 million, despite acknowledging it had ample financial resources, the analysis showed.

The full amount going to Fresenius and many other dialysis providers is far higher than what KHN could confirm. The analysis was limited to the portion of grants disclosed by the federal government. And the analysis counted only grants going to organizations whose primary purpose was providing dialysis. In a securities filing last month, Fresenius disclosed it received a total of $277 million in relief funds under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Funding to giant dialysis providers would have been greater if DaVita, the other multinational corporation that dominates dialysis care in the U.S., had not turned down $240 million in aid, saying other medical providers needed it more. Fresenius and DaVita each own more than 2,600 dialysis centers nationwide.

Headquartered in Germany, Fresenius Medical Care is focused on patients with kidney failure who need blood-purifying dialysis treatment three times a week to stay alive, billing itself as the world’s largest provider of dialysis and related services, equipment and drugs. Fresenius treated about 350,000 people worldwide and earned last year about $1.4 billion. The company announced second-quarter profits exceeding $400 million, up more than a third over last year, due to a 14% operating margin.

“From what we know today, the net impact of COVID-19 on our earnings is not so significant,” Helen Giza, Fresenius’ chief financial officer, told analysts.

With scores of COVID-19 patients developing major kidney damage, the pandemic caused unexpected demand for dialysis treatment. Chronic kidney disease and kidney failure were common among people hospitalized with COVID-19, accounting for 13% of all such patients nationally from January to March, when the extent of the virus’s spread in the U.S. was just coming to light, according to FAIR Health, a health data nonprofit that analyzes insurance bills.