OK, this is going to be a rant.  Against a firm that generally has raised my rankles for some 50 years.

First, a little history.

Way back when, I took a course (one that I later taught to others) on renal pathophysiology.  It was taught by Dr. Constantine L. Hampers (Harvard-MIT Health Sciences Technology Program).

A little later in time, I was offered a job by a nascent firm in Boston, with the somewhat arrogant name of “The Kidney Center”.  It was one of the very first for-profit dialysis centers in the US. I passed on the opportunity.

 

 

That firm eventually became part of a chain, BMA (Biomedical Applications) of National Medical Care (NMC).  Headed by none other than Gus Hampers, MD.  Yeah, it didn’t take a genius to realize that Gus Hamper and Constantine Hampers were the same persons.  (There were other Harvard professors associated with this firm.)  NMC was the “big guy” on the block- comprising some 1/3 of all dialysis centers in the US.

But, NMC (National Medical Care, the parent of that center) was cited (correctly) for using outdated and dangerous equipment, patient deaths, producing substandard devices.  They thought they’d skate due to their size (in the dialysis industry).  Nope.  It eventually entered into a consent decree with the FDA.

(A little tidbit to keep the story juicy and to explain the arrogance involved- Dr. Hampers was cited for hunting big game [margay, ocelots, jaguars, mountain lions and cougars — in Mexico between March 14, 1985, and January 1988] and taking their skins, for which he was indicted in 1988.)

(It eventually was acquired by WR Grace- right after it built that gorgeous building in Manhattan and when it was clear that Grace had poisoned the water of Woburn, Massachusetts.)

Enter a very talented MIT PhD ChemE, Ben Lipps.  Ben had been associated with Dow Medical (Ben was instrumental in developing its hollow fiber kidney) and created Seratronics (which was acquired by Fresenius USA, which made Ben it’s CEO).  In 1996, Ben pulled off a major coup- Fresenius acquired the giant National Medical Care enterprise.  And, Ben headed up Fresenius North America and in 1999, he became the chair and CEO of Fresenius Medical Care (worldwide).  His efforts over the next 13 years improved dialysis care. (What a difference a good CEO makes!)

Enough ancient history.  Let’s go to more recent history.

You might recall my post in April about how the pandemic was affecting dialysis.   To ensure that patients would not infect one another, dialysis centers had to be reconfigured- safe distancing, as well as setting up COVID-19 specific clinics.  Nurses and technicians needed to be gowned and masked, child-care centers set up (since schools and day care centers were closed, the nurse, techs, and docs needed  provisions for their kids), systems for SARS-CoV-2 testing, and telehealth centers created.  Those involved costs.

But, it’s also true that 13% of all COVID-19 patients were undergoing dialysis.  As opposed to maintenance dialysis (what the 500K patients undergo thrice weekly for life)- acute dialysis care  is not tightly regulated by Medicare, so it is effected at much higher fees (about twice as high).  So, dialysis programs that provide both chronic and acute dialysis were not suffering for cash (or profits).

Here it comes!  Fresenius– which is theoretically a German company (it is headquartered in Germany, but ½ its patients are here in the USA) took at least $ 277 million in emergency relief funds under the CARES Act.  (That includes the PPP- payment protection program, for which their manifold clinics across the USA seems to have accumulated $ 100 million or so.)

Those funds were really meant for companies that were experiencing a drop in demand- not an increase in demand.  But, that didn’t stop Fresenius from taking the money.

As opposed to DaVita.  Admittedly, DaVita originally considered soaking up $ 240 million- but with a more responsive (and ethical) CEO and board- the ultimately decided to refuse the funds.  Both Fresenius and DaVita operate about 2600 dialysis centers apiece.  Fresenius provides dialysis to about 350K patients worldwide with a 14% operating margin, about 5 points higher than DaVita.

Oh, it gets better.   For Q2 2020, Fresenius only made $ 400 million in profits- which are up 1/3 compared to Q2 2019. (I told you they didn’t suffer any downturn.)  (DaVita had a 14% margin for the second quarter, down from 2019- because it covered the COVID-19 costs itself.)

In the meantime, those CARES funds that were specifically earmarked for healthcare entities didn’t manage to make it to all the doctors and dentists whose practices were decimated due to the pandemic.

And, while I love to pick on the pigginess of Fresenius (now that Ben is gone, it’s reverted to its [lack of] ethics of old), it’s not the only slovenly health care entity.  Remember Senator Frist and his brother?  Their for-profit hospital chain, HCA Healthcare sponged up $ 590 million in CARES funds.  And, posted a Q2 2020 profit of $ 1.1 billion.  (Yeah- those emergency CARES relief funds yielded half of their profit!)