Kidney Dialysis Centers

The US commercial kidney dialysis industry includes about 3,200 dialysis centers with combined annual revenue of $10 billion. Large companies include DaVita, Renal Advantage, Diversified Specialty Institutes, and the US operations of Fresenius Medical Care. The industry has become highly concentrated: the four largest companies operate more than 70 percent of all centers. A typical kidney dialysis center has 20 employees and $3 million of annual revenue.

COMPETITIVE LANDSCAPE

Demand depends on the number of people who suffer from kidney disease. The profitability of individual companies is linked to efficient operations and good marketing. Large companies have economies of scale in administrative costs, which has driven consolidation in the industry. Small operators can compete successfully if they have centers in desirable locations or good relations with doctors who refer patients. The industry is moderately labor-intensive: average annual revenue per worker is about $140,000.

Over 300,000 patients use dialysis centers in the US, a number expected to grow 4 to 5 percent per year. In addition to the 3,200 commercial dialysis centers, about 1,000 are operated by hospitals and nonprofit organizations.

PRODUCTS, OPERATIONS & TECHNOLOGY

The industry provides a special treatment called hemodialysis for patients who suffer from end stage renal disease (ESRD). Hemodialysis, the most common form of treatment for ESRD, is not a cure but a blood-filtering process that prolongs life. ESRD patients must undergo dialysis for the rest of their lives. Without dialysis treatment or a kidney ...