The government guarantees dialysis. Two companies collect most of the check.

In October 1972, Congress made kidney failure a Medicare entitlement regardless of age — the first, and still one of only a handful, of medical conditions that alone qualify someone for the program.▸ More than fifty years later, that guarantee still shapes a distinct corner of American health care: a population that is a rounding error in Medicare's enrollment numbers but a disproportionate share of its checks, served by a market two companies dominate, and staffed by a physician pipeline that can no longer fill its own training seats.

Start with the disproportion itself.▸ In 2022, beneficiaries with end-stage renal disease (ESRD) made up just 1.0% of Medicare's 66 million beneficiaries — yet they accounted for 5.0% of the program's $1.1 trillion in spending, according to MedPAC's Data Book on health care spending and the Medicare program. Spending on the average ESRD beneficiary runs almost six times higher than on an aged beneficiary without the diagnosis. Behind that ratio are real people: as of March 31, 2025, 516,837 Americans were on dialysis and another 316,873 were living with a functioning kidney transplant, per the National Forum of ESRD Networks' quarterly census.

Medicare pays dialysis facilities a single bundled rate per treatment, covering the drugs, labs, and staff time that go into it.▸ MedPAC's cost analysis shows what that treatment actually costs a freestanding facility to deliver, and where the money goes once it arrives.

Labor is the single largest line — 35% of the $291 median cost per treatment in 2023, more than overhead, capital, supplies, and drugs combined with laboratory services.▸ And the squeeze is real: Medicare's bundled base rate rose from $273.82 in 2025 to $281.71 in 2026, a 2.2% increase, while facilities' cost per treatment had already climbed from $286 to $291 the year before. The result, per MedPAC, is that the fee-for-service Medicare margin on dialysis — payments against the full cost of care — was −0.2% in 2023, an improvement on 2022's −1.1% but still a loss on paper for every Medicare patient treated. Facilities stay in business anyway because Medicare Advantage and commercial insurers pay considerably more per treatment than traditional Medicare does.

About 7,700 dialysis facilities treated fee-for-service Medicare beneficiaries in 2023, and FFS Medicare paid $8.1 billion for their care — down 8% from 2022, mostly because beneficiaries on dialysis have been shifting rapidly into Medicare Advantage plans, from 25% of that population in January 2020 to 52% by December 2023.▸ But ownership of those 7,700 facilities is anything but dispersed.

Fresenius Medical Care and DaVita — the two largest dialysis organizations — account for three-quarters of all dialysis facilities and three-quarters of FFS Medicare treatments.▸ Widen the lens to the five largest organizations and the share climbs to roughly 87%. That leaves the remaining 13% split among independent and nonprofit operators competing for whatever capacity a government-guaranteed, thrice-weekly, life-sustaining treatment leaves on the table.

None of this — the money, the consolidation, the margin math — runs itself.▸ It runs on nephrologists, and the training pipeline that is supposed to produce them is failing to fill its own seats.

In 2010, 94.1% of nephrology fellowship positions filled on Match Day; by 2024 that had fallen to 65.8%.▸ It is not a one-year dip: in the 2026 Match, 331 of 501 offered positions filled — a 66.1% fill rate, leaving 170 slots empty and just 89 of 186 training tracks (48%) fully staffed. A modest rebound to 73% in the 2025 Match turned out to be a blip, not a recovery. Forty percent of the trainees who did match into nephrology this year are international medical graduates — the specialty increasingly depends on doctors trained abroad to staff the clinics and hospital consult services behind a system that treats over 800,000 Americans with kidney failure.

Money figures span 2023 (MedPAC's most complete cost and payment data) with the 2026 PPS base rate cited for the current-year policy context; the 2022 beneficiary-share figures come from MedPAC's Medicare Current Beneficiary Survey analysis, the most recent year available. Cost-per-treatment dollar amounts are MedPAC's own reported percentage shares applied to its $291 total, apportioned to whole dollars so they sum exactly to $291.