CASE BACKGROUND
Dialysis is an essential, life-sustaining medical treatment for the roughly 800,000 patients in the United States with end-stage kidney disease. Defendants DaVita Inc. and Fresenius Medical Care are the two largest providers of dialysis treatment. Together they control approximately 80% of all outpatient dialysis clinics and over 90% of the market by revenue. Defendants operate as a de facto duopoly, with each having virtually equal market shares of 40% by number of clinics and 45% by revenue.
Given defendants’ comparable size, scale, and profitability in outpatient dialysis treatment, logic and economic theory predict that they should compete fiercely for lucrative private-pay patients by lowering prices, improving treatment quality, and opening clinics in the same geographic regions whenever possible. Instead, defendants have allegedly colluded with each other so that they do not compete:
- Defendants have consistently raised and maintained private-pay prices together even as other providers lowered them and Medicare prices stayed the same.
- Defendants have cut costs and reduced treatment quality by operating their clinics as commoditized fast-food chains, leading to abysmal treatment results that are among the worst in the developed world.
- Defendants have avoided entering the same geographic territories outside of major metropolitan areas, routinely ceding such territories exclusively to the other and thereby carving up markets in roughly equal proportions.
Defendants have allegedly consistently acted like separate divisions of a single monopolistic entity, each charging monopoly prices and earning monopoly profits on private-pay patients across the country. These results are the intended outcomes of at least a decade-long conspiracy among defendants to: (1) fix and maintain private-pay prices, (2) reduce quality and refrain from competing on the basis of quality, and (3) cede and allocate to each other geographic territories outside of densely populated metro areas.
The consequences of defendants alleged conspiracy have been devastating, raising prices and reducing the quality of care. Since 2013, defendants’ clinics have collectively amassed nearly 80,000 citations —split roughly evenly between the two companies—for failing to meet federal performance standards. The mortality rates for U.S. patients are two to four times higher than patients in Japan and Western European countries. Patients attending defendants’ clinics receive fewer life-saving kidney transplants, and there is evidence defendants’ staff actively discourage patients from getting on transplant waiting lists. Defendants’ patients also receive home dialysis at lower rates than their counterparts in other countries, despite home dialysis usually generating superior patient outcomes and significant quality-of-life improvements.
