While patients with end-stage kidney disease have benefited from innovations in clinical therapeutics and care delivery, these changes have been primarily incremental and have not fundamentally transformed care delivery. Dialysis markets are highly concentrated, which may impede innovation. Unique features of the dialysis industry that have contributed to consolidation can help to explain links between consolidation and innovation. We discuss these unique features and then provide a framework for considering the effects of consolidation on innovation in dialysis that focuses on the following economic considerations: (1) industry characteristics, composition, and stage of consolidation, (2) innovation characteristics and relative profitability, (3) the role of government regulation, and (4) innovation from smaller providers and new entrants. We present examples of how these considerations have influenced the adoption of alternative dialysis technologies such as peritoneal dialysis and erythropoietin-stimulating agents, and we discuss how consolidated markets can both help and hinder recent policy initiatives to transform dialysis care delivery. Only by considering these important drivers of consolidation, future efforts can be successful in transforming end-stage kidney disease care.