the circulation of the body 's blood through a machine that cleans the blood of toxins . these machines could not maintain life for long because repeated treatments were not possible due to the lack of a means of repeatedly gaining access to the blood stream . the problem was partially solved in 1960 , when a subcutaneous cannulae - and - shunt apparatus was developed that permitted the repeated access of patients to hemodialysis . currently , the standard practice of hemodialysis are treatments 3 times a week for 3 to 4 hours at a time   although hemodialysis can be performed at home , the great majority of patients dialyze at one of nearly 4,000 facilities providing this service . another form of dialysis , done primarily at home , is peritoneal dialysis , of which there are three types . continuous ambulatory peritoneal dialysis ( capd ) is the most common type of peritoneal dialysis . a solution called the dialysate , passes from a plastic bag through a catheter into the abdomen . after several hours , the person using capd drains the solution back into a disposable bag . then the person refills the abdomen with fresh solution through the same catheter , to begin the cleaning process again . continuous cyclic peritoneal dialysis ( ccpd ) is a form of peritoneal dialysis that uses a machine . a typical ccpd schedule involves three to five exchanges during the night while the person sleeps . during the day , the person using ccpd performs one exchange that lasts the entire day . nocturnal intermittent peritoneal dialysis ( nipd ) is a machine - aided form of peritoneal dialysis . nipd differs from ccpd in that six or more exchanges take place during the night , and the nipd patient does not perform an exchange during the day . as of 1998 , 89 percent of patients used hemodialysis , 6 percent used capd , and 5 percent used either ccpd or nipd ( health care financing administration , 1999a ) . transplantation dates back to 1956 , when the first successful transplant was performed on identical twins . a successful transplant relieves the patient of the necessity of dialysis and usually improves the quality of life . however , the patient must take immunosuppressive drugs for the rest of his / her life to prevent the body 's immune system from rejecting the transplanted kidney . at the time of the initiation of the program in 1973 , transplantation was considered to be a bridge therapy between periods of dialysis ( kasiske et al . , 2000 ) because of high graft failure rates . however , due to greatly improved graft success rates , transplantation is generally considered to be the optimal therapy for most patients . although the basic entitlement provisions of the 1972 legislation remain in place , there have been a number of legislative changes to the program over the years . the first was the esrd program amendment ( public law 95 - 292 ) passed in 1978 . this was extended in 1978 to 3 years , although many successful transplant recipients remain on medicare after this point because they qualify under the disabled or age provisions of medicare . in addition , the 1978 provisions increased coverage of kidney acquisition costs and provided for more complete coverage of home dialysis costs . the omnibus budget reconciliation act ( obra ) of 1981 included the medicare secondary payer ( msp ) provision . msp provides that , if a beneficiary has insurance other than medicare , then the other insurer is responsible for medical costs prior to medicare . obra 1981 set the msp period at 12 months from the date of medicare entitlement . subsequently , it was raised to 18 months in 1990 , and then 30 months in 1997 . in addition , obra 1981 resulted in the development of the composite rate payment system for dialysis . originally , dialysis was paid for on a cost basis with a upper screen limit of $ 138 per treatment . ( the screen was $ 150 in the initial year , with $ 12 allowed for physician services . ) this included an exceptions process which results in even higher payment levels , primarily to hospital - based facilities . beginning in 1983 , when the composite rate became effective , payment levels for hospital - based and freestanding facilities were roughly $ 131 and $ 127 , respectively . these rates remained largely unchanged until the balanced budget refinement act of 1999 , which increased the rates by 1.2 percent in both 2000 and 2001 . obra 1986 mandated the creation of a national registry for esrd , which resulted in the united states renal data system ( usrds ) . the usrds is a cooperative project between hcfa and the national institute of diabetes , digestive , and kidney diseases ( niddkd ) . hcfa provides extensive data from the esrd program management and medical information system as well as funding for the economic studies portion of the usrds . since its first annual report in 1989 , the usrds has been the primary source of clinical , epidemiological , and economic information on esrd in the united states . the balanced budget act of 1997 ( section 4558 ) , mandated that hcfa develop a method to measure and report on the quality of renal dialysis services under medicare . the development of quality of care measures did not take place in a vacuum . the renal community , including provider and patient groups ( usrds , nid - dkd , national kidney foundation , and hcfa ) have a long history of working together on quality initiatives . for example , since 1993 , hcfa has conducted an annual survey of quality measures ( health care financing administration , 1999b ) . in 1997 , the national kidney foundation published the dialysis outcomes quality initiative , a set of guidelines for adequacy of hemodialysis , adequacy of peritoneal dialysis , vascular access procedures , and treatment of anemia ( national kidney foundation , 1997 ) . based on these previous efforts it is anticipated that these measures , which will be applied at the individual dialysis facility level , will be published on the hcfa website ( http://www.hcfa.gov ) by late 2000 . as previously noted , prior to the enactment of the legislation creating the esrd program , there were severe limits on the number of persons who received treatment . as a result , the esrd patient profile prior to 1973 was much different than it became under medicare . in 1967 , the dialysis population was predominantly male ( 75 percent ) , overwhelmingly white persons ( 91 percent ) , and very young ( 7 percent over the age of 55 ) . by 1978 , there were equal proportions of males and females , black persons accounted for 35 percent of patients , and 46 percent of the dialysis population were over the age of 55 ( evans , blagg , and bryan , 1981 ) . in addition to providing access to treatment more in line with the underlying renal disease burden , medicare coverage greatly expanded the number of patients receiving treatment . early estimates of the program were that as many as 10,000 new patients would initiate therapy each year and that the program would level out at about 35,000 beneficiaries ( klar , 1972 ) . program incidence ( number of new patients each year ) was over 14,000 in 1978 , approximately 32,000 in 1986 , approximately 65,000 in 1994 , and reached 75,000 in 1998over 7 times the initial estimates . the reasons for this increase are not well understood and are generally referred to under the designation of expanded acceptance criteria . expanded acceptance treatment criteria are evident in two major areas  age and diabetes . in 1978 one - fourth of newly treated patients were 65 years or over . by 1998 , well over one - half of new patients were 65 years or over at the time of renal failure . in the years before the medicare esrd program , diabetes was usually considered a contraindication to treatment . by 1978 , persons whose renal failure was due to diabetes still accounted for only 10 percent of new patients . in 1998 , 45 percent of new patients had renal failure due to diabetes . it appears that , as nephrologists and dialysis centers became more successful at treating these more fragile patients , referrals for treatment increased accordingly . as previously noted , the two basic therapies are dialysis and transplantation . from the beginning of the program until the mid-1980s , there were rapid increases in both the number of transplants and in transplant success rates ( hariharan et al . 2000 ) . as a result , the percent of patients with a functioning kidney transplant more than doubled , from 10 percent to 22 percent by 1986 ( eggers , 1988 ) . since 1986 , growth in the number of transplants has slowed , largely because of the limitation in the number of donated cadaver kidneys . much of the growth in the number of transplants in recent years is due to increasing numbers of living donor transplants . living donors accounted for 20 percent of all kidney transplants in 1988 and 34 percent in 1998 . thus , despite the fact that transplant success rates are improving , the ever increasing dialysis population has offset these transplant gains . from 1986 to 1998 , the percent of medicare esrd beneficiaries with a functioning graft has remained largely unchanged . the original projections of annual program expenditures were quite low , having the program level out at about $ 250 million ( klar , 1972 ) . , it reached $ 1 billion , $ 5 billion by 1990 , and , by 1998 , had grown to over $ 12.3 billion . despite this large increase in total expenditures , compared with the rest of the medicare program , esrd has been fairly successful at restraining per capita costs ( eggers , 2000 ) . total esrd medicare enrollment in 1998 was almost 300,000 , accounting for 0.8 percent of total medicare enrollment , compared with 0.1 percent of medicare enrollment in 1974 . in addition , because expenditures increase with age and are greater for beneficiaries who are diabetic , the increasing percentage of patients who are elderly and/or diabetic has increased program expenditures by about 21 percent over the impact of enrollment increases alone . in 1974 , the average esrd patient was 30 times as expensive as the average medicare beneficiary . by 1998 , the average esrd patient was about 7.5 times as expensive as the average medicare beneficiary . the reason for this is that during the 1970s and 1980s , when medical care inflation was usually in the double digits , two major parts of esrd care , dialysis and physician care ( known as the monthly capitation payment ) , remained largely unchanged . the dialysis payment rate ( the composite rate ) , is lower in nominal terms in 1998 than it was in 1974 . in inflation - adjusted terms , payment for dialysis is about one - third as great as it was in 1974 . the large decrease in inflation adjusted payment rates for dialysis has raised the question of how this has affected quality of care ( institute of medicine , 1991 , health care financing administration , 1989 ) . dialysis mortality rates have decreased in recent years ( united states renal data system , 1999 ) , from 28 percent in 1986 to 19 percent in 1996 . in addition , the decreases in mortality have been greatest for persons with diabetes , among the most fragile of dialysis patients . healthy kidneys produce the chemical erythropoeitin , which stimulates the production of red blood cells . thus , kidney failure often results in anemia as the body is unable to produce a sufficient supply of red blood cells . for a number of years the food and drug administration approved the production of ( and medicare began payment for ) a recombinant form of erythropoeitin . now , virtually all hemodialysis patients , and many capd patients receive erythropoeitin . as a result , average hematocrit levels have increased . in 1993 , only 46 percent of patients had a hematocrit above 30 percent . by 1998 , this had increased to 83 percent ( health care financing administration , 1999b ) . the major problem in achieving a successful transplant is combating the body 's natural immune system which attempts to reject the transplanted kidney graft . in the 1970s , the introduction of cyclosporine in 1984 greatly increased the success of transplantation ( powe , eggers , and johnson , 1994 ) , as has additional improvements in immunosuppression . as a result , by 1997 , one - year graft survival rates had increased to 88 percent for cadaver grafts and 94 percent for recipients of living donor grafts . one - year patient survival rates are 94 percent and 98 percent for recipients of cadaver and living donor graft , respectively . the large decrease in inflation adjusted payment rates for dialysis has raised the question of how this has affected quality of care ( institute of medicine , 1991 , health care financing administration , 1989 ) . dialysis mortality rates have decreased in recent years ( united states renal data system , 1999 ) , from 28 percent in 1986 to 19 percent in 1996 . in addition , the decreases in mortality have been greatest for persons with diabetes , among the most fragile of dialysis patients . healthy kidneys produce the chemical erythropoeitin , which stimulates the production of red blood cells . thus , kidney failure often results in anemia as the body is unable to produce a sufficient supply of red blood cells . for a number of years the food and drug administration approved the production of ( and medicare began payment for ) a recombinant form of erythropoeitin . now , virtually all hemodialysis patients , and many capd patients receive erythropoeitin . as a result , average hematocrit levels have increased . in 1993 , only 46 percent of patients had a hematocrit above 30 percent . by 1998 , this had increased to 83 percent ( health care financing administration , 1999b ) . the major problem in achieving a successful transplant is combating the body 's natural immune system which attempts to reject the transplanted kidney graft . in the 1970s , the introduction of cyclosporine in 1984 greatly increased the success of transplantation ( powe , eggers , and johnson , 1994 ) , as has additional improvements in immunosuppression . as a result , by 1997 , one - year graft survival rates had increased to 88 percent for cadaver grafts and 94 percent for recipients of living donor grafts . one - year patient survival rates are 94 percent and 98 percent for recipients of cadaver and living donor graft , respectively . medicare 's esrd program has largely achieved the original goal of providing access to life sustaining care for thousands of persons who would not otherwise have received care . during its 27-year history , many legislative changes have been made to refine coverage and entitlement issues . despite certain limitations on payments , improvements in quality
perhaps no other federal government program can lay claim to have saved as many lives as the medicare end stage renal disease ( esrd ) program . since its inception in 1973 , as a result of the social security amendments of 1972 ( public law 92 - 603 , section 299i ) , 
 over 1 million persons have received life - saving renal replacement therapy under this program . 
 prior to the enactment of this legislation , treatment was limited to a very few patients due to its extremely high cost and the limited number of dialysis machines . in the 1960s , it was not uncommon for hospitals that had dialysis machines to appoint special committees to review applicants for dialysis and decide who should receive treatment , the others were left to die of renal failure . 
 public law 92 - 603 removed this odious task from the nephrology community . 
 a person with esrd is entitled to medicare if he / she is fully or currently insured for benefits under social security , or is a spouse or dependent of an insured person . 
 consequently , entitlement is less than universal , with 92 percent of all persons with esrd qualifying for medicare coverage .