Dialysis Analysis: Prop. 8 Has Become the Costliest Item on November’s Ballot

November’s kidney-dialysis measure has become the most expensive ballot proposition in the U.S. — with all the money coming from special interests.

(Courtesy Image)

The most confusing measure on the California ballot may be the dialysis-clinic proposal known as Proposition 8, which takes the economics of kidney treatment before voters who are generally completely unfamiliar with dialysis. Despite the relatively obscure subject matter, this initiative has quietly become the most expensive ballot initiative on November’s ballot — not just in California, but anywhere in the United States.

The two sides have pumped nearly $120 million combined into this outpatient dialysis treatment debate. Most of that comes from the opposition’s TV campaign, in which angry patient fumes, “The people who wrote this proposition, I would like to look them right in the face and have them tell me how it’s going to help me.”

So SF Weekly looked the people who wrote this proposition right in the face — on FaceTime, to be specific — and asked them how Prop. 8 would help the 80,000 California patients who rely on dialysis clinics.

“It improves patient care in an industry that has long gone under the radar,” says Sean Wherley, spokesperson for the Yes on Prop. 8 campaign. “Patients and workers [at clinics] report blood stains, cockroaches, and severe understaffing that has left the industry in a crisis in California. It will push the industry to invest more in care, whether that’s hiring additional staff, purchasing new equipment, or improving facilities.”

Dialysis is a blood-treatment process for people whose kidneys can no longer filter waste and toxins. Some patients can receive it at home or in a hospital, but most get the treatment at dedicated dialysis centers. Prop. 8 would limit the cost of the procedure at those centers “to 115 percent of the costs for direct-patient care and quality-improvement costs” and require rebates if a patient were charged more than that.

Opponents argue that those rebates would go to large insurance companies — not patients.

“There is no language in the initiative whatsoever requiring insurance companies to pass the rebates to consumers or employers to offset insurance costs,” the No on Prop. 8 campaign tells us in a statement.

They also insist that the dialysis industry is not as profitable as the measure’s backers claim.

“If Prop. 8 passes, 83 percent of clinics in California will be operating in the red,” says No on Prop. 8 spokesperson Kathy Fairbanks, citing an analysis by the Berkeley Research Group. “That can’t go on forever. Clinics will be forced to cut back services, or eventually, to close.”

That may be true, though campaign filings show that No on Prop. 8 paid more than $150,000 to Berkeley Research Group, indicating they may have simply paid for the study themselves.

These conflicting arguments define the record-breaking $120 million Prop. 8 debate. But not a dime of that $120 million comes from grassroots donors. It’s all from unions, political parties, and dialysis clinics.

Donation data from the Secretary of State shows that Yes on Prop. 8 has received $20 million, all from union political action committees and the California Democratic Party. Meanwhile, the No on Prop. 8 campaign has received about $100 million, all of it just from six dialysis clinic companies.

Nearly half of that $100 million comes from just two big-money dialysis firms. Davita, Inc. and Fresenius Medical Care control 5,000 lucrative dialysis clinics nationwide, and both have branches here in San Francisco.

“They made profits of $4 billion last year,” Yes on 8’s Wherley says of Davita and Fresenius. “This is why they are sending out the scare tactic that clinics are going to close. They have the money to continue keeping these clinics open. They’re just going to have to send some of these profits into the patient care venue, as opposed to shareholders’ profits.”

But the No on Prop. 8 crowd smells a rat. The measure is sponsored by the SEIU-United Healthcare Workers West, who they feel are trying to unionize the dialysis clinic industry. “The proponents of Prop. 8 risk the lives of vulnerable dialysis patients to achieve a political objective,” Fairbanks tells SF Weekly. “Using patients as pawns is wrong.”

This makes Prop. 8 a proxy battle between unions and for-profit medical corporations, fighting over the economics of modern American healthcare. These arguments are over price and profit caps, not patient outcomes. And patients aren’t even paying any of Prop. 8’s $120 million bill.

This article has been updated with additional information on the  No on Prop. 8’s payments to the Berkeley Research Group.

Joe Kukura is an SF Weekly contributor.

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