Labor, industry tangle over dialysis ballot initiative

Kidney dialysis may sound like an odd topic for a California ballot proposition, but voters will tangle with the issue on Nov. 3 — for the second time.

The basic fight over  Proposition 23 is between organized labor, which favors the initiative, and a number of medical and other interests that are opposed. The latter include the California Dialysis Council, the California Medical Association, the American Nurses Association of California and medical associations in at least 15 counties. Surrounding the debate are questions of medical care quality, clinic staffing, access, and costs.

Backers contend that of all developed countries, the United States spends the most on dialysis care, but has one of the highest dialysis mortality rates. Proposition 23’s proponents argue that the measure will improve that picture in California.

The foes of Proposition 23 note that the study cited by the proponents is more than a decade old and is based on earlier data. The latest study from the United States Renal Data System shows a 30% decline in unadjusted mortality for patients with chronic kidney disease.

It’s a lifeline; dialysis functions as a temporary survival mechanism while patients wait for a kidney transplant.

In 2018, California voters rejected a dialysis-related measure that was also backed by labor. It sought to cap for-profit clinics’ profits. Voters overwhelmingly rejected the measure, which was defeated 59.9% to 40.1%.

Both for-profit and non-profit dialysis clinics exist within the industry, but for-profit dialysis corporations are dominant, two of which — Davita and Fresenius —are Proposition 23’s leading opponents.

The dollars at stake are large. Davita’s net worth is $10.4 billion, and Fresenius stands at $26.3 billion.

A report by the Legislature’s nonpartisan fiscal adviser, the Legislative Analyst, describes dialysis as a $3 billion-a-year industry in California, and says the payments for treatment come largely through Medi-Cal, Medicare and group or personal health insurance. Potential regulatory and other costs to state and local governments under Proposition 23 could reach “in the low tens of millions of dollars annually,” the LAO said.

Kidney dialysis is this big of a business because it’s in high demand. Chronic kidney disease (CKD) patients depend on regular dialysis treatment for survival – and now that CKD is the ninth leading cause of death in the United States, demand for dialysis has skyrocketed. As of 2017, 746,000 Americans depended on the treatment for survival.

Patients can be put on a waiting list to receive a kidney transplant, but the wait time averages five to 10 years in California. So even if a patient is placed on a transplant wait list as soon as they begin dialysis treatment, they only have a 35% chance of seeing the day they will become eligible for the operation.

Proponents of Proposition 23, SEIU-United Health Care Workers West, argue that better policy could narrow that discrepancy; they say the proposition’s components, including staffing, would decrease the dialysis mortality rate.

SEIU-United Healthcare Workers West, the organization backing Proposition 23, asserts that Proposition 23 is necessary to keep patients safe.

 But its opponents argue the proposition is unnecessary, misleading and too expensive.

Kathy Fairbanks, a media strategist for the No on 23 Coalition, says, “Prop 23 is unnecessary. Dialysis clinics are strictly regulated and provide high quality care.”

The clinics already have physicians on staff, nephrologists make daily rounds and each of the dialysis patients typically has a personal physician. “RNs, techs, social workers, dieticians see the patients every time they come for treatment – three times a week,” she noted.

Proposition 23 requires a physician at the dialysis clinics, the reporting of infection rates to the government, state approval of clinic closure or reduction of services and treatment of all patients regardless of income source.  Amid a physician shortage, facilities will be allowed to employ a Nurse Practitioner or Physician’s Assistant instead, under a one-year waiver, which will be required to be renewed annually.

Backers hope that the reporting requirement in Proposition 23 will have a similar effect on dialysis clinics’ rates of infection.

The cost of increased staffing would result in “clinic closures and cutbacks that would dangerously jeopardize access to dialysis care that these patients need to survive,” Fairbanks added, noting that this is the opposition’s main concern. The SEIU-UHW contends that for-profit clinics’ larger-than-normal profit margins render them able to afford the extra cost of hiring more staff.

The proposition also requires periodic infection reports.

Similar policies requiring healthcare professionals to report infection rates have been effective at decreasing rates of infection. A provision of the Affordable Care Act, for example, reduced payments for hospitals that ranked in the worst-performing quartile of infection rates. In response, blood-associated infections at hospitals nationwide decreased by 50%.

The SEIU-UHW hopes that the reporting requirement in Proposition 23 will have a similar effect on dialysis clinics’ rates of infection. Dialysis clinics, however, are already required to report infections to the Centers for Medicare and Medicaid Services.

Shortened dialysis treatment leads to incomplete blood filtering, which increases dialysis-related mortality rates. 

Proposition 23 also requires state approval of clinic closures and reductions of services.

According to the SEIU-UHW, the closure approval component is intended to prevent dialysis corporations from closing facilities that patients depend on. They say profitable medical service facilities, dialysis clinics included, can make money by closing facilities to create a scarcity.  They say that “it’s very important for the state to prevent unnecessary closing so that patients aren’t left without treatment.”

But foes of Proposition 23 believe the costliness of the proposition will force clinics to close, thereby leaving patients in limbo.

The measure also bars clinics from discriminating against patients based on their payment source. This language is aimed at Medi-Cal and Medicare dialysis patients, programs that provide medical care for the elderly and low-income people, and SEIU-UHW argues that coverage of Medi-Cal and Medicare patients is increasingly important amid the pandemic

The California Democratic Party, which backed Proposition 8 two years ago, is expected to endorse Proposition 23.
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Editor’s Note: Tightens throughout, adds fiscal estimate and comment from the Legislative Analyst, deletes references to lawsuits and includes additional comment.