8: Dialysis Clinic Profit Pruning
What it would do:
Require companies operating dialysis clinics to payback any profits over 15 percent of qualifying business costs. Payments would be made to insurance companies.
What it would cost the government:
Probably not much, though depending on how dialysis clinics respond to the law, state and local governments could see fairly small changes to their health care budgets or income tax revenues.
Why it is on the ballot:
The majority of California dialysis clinics, which serve patients suffering from kidney failure, are owned by two for-profit companies: DaVita Kidney Care and Fresenius Medical Care. The Service Employees International Union-United Healthcare Workers have had their sights trained on the industry for years. They’ve sponsored legislation and floated ballot measures to mandate higher staffing ratios and regulate insurance payments.
Arguments in Favor:
The two companies that operate most of California’s dialysis clinics are enormously profitable. In 2017, for example, DaVita netted $1 billion. And yet over the last five years, the California Department of Public Health has received 18 complaints a month about health and safety conditions at dialysis clinics. The state needs to make sure that these companies aren’t putting profits over the quality of care and to force them to invest more in equipment and training.
This is just a pressure tactic from a union who wants to organize dialysis clinic workers. And it’s a poorly thought out initiative at that. In regulating profit, the measure doesn’t count basic administrative costs, like payroll management and legal expenses, as qualifying costs. This has very little to do with improving patient care. The industry may not be perfect, but this proposition could result in clinics closing, putting the lives of the thousands of Californians who need dialysis in jeopardy.
California Democratic Party
Service Employees International Union-United Healthcare Workers
International Brotherhood of Electrical Workers Local 617
Mercury News and East Bay Times Editorial Boards
California Republican Party
Fresenius Medical Care and Davita
California Medical Association
National Kidney Foundation