OBJECTIVES: Korea is experiencing a 9% annual growth rate in treated end-stage renal disease (ESRD) patients. Currently, 21.6% of patients with end-stage renal disease (ESRD) are treated with peritoneal dialysis (PD) and the rest are treated with hemodialysis (HD) in Korea. The objective of this study is to estimate the 5-year impact on the government budget if PD utilization increases to 35% by 2011 using a budget impact model.METHODS: The model takes into account dialysis modality distribution, annual average government reimbursement for treating an ESRD patient per modality, annual ESRD growth rate, years to reach new modality distribution, and patient-years-at-risk. Data were collected from published literature. At baseline (2006) there were 37,021 ESRD patients undergoing dialysis therapy. Annual average payment per patient per modality was KRW19,538,384 for HD,  KRW10,211,980 for APD, and KRW17,097,340 for CAPD. APD reimbursement is low because the government does not currently cover the cost of the APD machine nor the cost of cassettes used daily in the machine. APD was 10% of total PD share. It was assumed that overall PD utilization would increase to 35% by 2011 (year 5)and that APD share of PD remains at 10%. Annual ESRD growth rate was set to 9%. The reimbursement rate for the three treatment modalities was kept constant over the time horizon.RESULTS: If PD utilization increases to 35% by 2011, the 5-year cumulative savings to government will exceed KRW64,334 million. Analysis also shows that KRW64,334 million in savings would enable the government to cover treatment for an additional  3,469  patient years.CONCLUSIONS: Higher PD utilization would provide substantial savings to the government and would enable more patients access to dialysis treatment.