California voters weigh measure to cap dialysis profits
SACRAMENTO, Calif. — California voters heading to the polls Tuesday will decide whether to restrict dialysis clinics’ profits through a union-funded ballot measure supporters say will improve patient care.
The measure, Proposition 8, caps profits at 15 percent of what clinics spend on patient care and quality improvement. Dialysis companies opposing it say it would reduce patients’ access to care.
The fight over the measure is the most expensive battle on the 2018 ballot, generating more than $130 million in campaign contributions. A health care workers union, Service Employees International Union-United Healthcare Workers West, funded the $18 million supporting campaign.
The union argues Proposition 8 will stop the dialysis companies from cutting corners and force them to invest more of their profits into patient care. They argue the profit-hungry companies overwork their staff and fail to adequately clean clinics, which hurts patients.
Dialysis companies contributed more than $111 million to kill the measure, blanketing the airwaves with ads. It’s the most one side has dropped on a U.S. ballot initiative since at least 2002. Most of that money comes from the two largest dialysis companies operating in California: Colorado-based DaVita Inc. and Germany-based Fresenius Medical Care.
They say the measure is a tactic to pressure the dialysis companies to let workers unionize and will force clinics to close. Most California clinics provide high quality care, Proposition 8 opponents argue.
Tens of thousands of patients receive dialysis treatment in California each month, according to the nonpartisan Legislative Analyst’s Office. Dialysis patients typically undergo treatments lasting hours three times a week where machines filter their blood, essentially performing kidney functions outside the body.
The Legislative Analyst’s Office estimates dialysis companies make roughly $3 billion in annual revenue from their California operations.
Dialysis clinics say critical management expenses will be counted as profits, which would bankrupt clinics. The union says the dialysis companies are wrong and are using the argument about bankrupting clinics to scare voters.
The law doesn’t spell out exactly which expenses will count as patient care and quality improvement and which will be classified as profits. If the measure passes, that determination will likely be made by the courts and state regulators tasked with implementing the law.
The measure is one of several health care-related issues on the ballot. Proposition 4 would allocate $1.5 billion in bond funding for children’s hospitals. If approved, that money would fund construction, renovation, expansion and new equipment and would be paid back over time with interest. Proposition 11 would let private ambulance companies require workers stay on-call during paid breaks.