Fresenius' Spanish Agreement - Analyst Blog

Fresenius Medical Care (FMS), the largest global player in dialysis-related services, recently arrived at an agreement with the public health department of the Murcia region of Spain. This constitutes Spain's first-ever complete dialysis care and performance-linked reimbursement model.

Under the terms of the agreement, effective mid-2011, Fresenius will make available dialysis treatment to about 200 renal patients in the area.

The system announced by the two parties is similar to the one earlier implemented in neighboring Portugal, about three years ago. Under the proposed mechanism, reimbursement will be translated to an all-inclusive “bundled” rate, which is connected with the provider's performance on quality measures. Currently, Fresenius provides dialysis care and associated products to patients in the Murcia region on a “fee-for-service” basis.  

Fresenius is the largest private-sector dialysis care provider in Spain with annual revenues of roughly $270 million. The company provides dialysis care to over 5,500 recipients at 64 clinics. The Spanish Society of Nephrology has stated that 1,100 patients per one million people require renal help, in the form of either dialysis or transplant, to survive.  

Globally, Fresenius operates a network of about 2,716 dialysis clinics across North America and overseas markets to provide dialysis treatment to more than 210,000 patients. Dialysis treatment is required by victims of chronic kidney failure, a condition that affects over 1.89 million people worldwide each year.

The company is also the world's largest provider of dialysis products. Its primary competitor in the U.S. is DaVita (DVA), which provides dialysis services for patients suffering from chronic kidney failure or end stage renal disease (“ESRD”).