Dialysis companies have poured $94 million into a campaign to defeat a California ballot initiative that would cap profit margins at their outpatient clinics, the most spending since pharmaceutical companies helped defeat a drug-price referendum two years ago.
Proposition 8 would require the state’s 555 kidney dialysis clinics to give insurance companies back any money they make when revenue exceeds 115% of the cost of direct patient care and improvements such as staff training. It will be on the Nov. 6 ballot along with 10 other California initiatives on topics ranging from daylight savings time to the size of cages for farm animals.
The ballot measure is the latest front in a battle between organized labor and the state’s two largest dialysis providers, DaVita Inc. and the North American unit of Fresenius Medical Care AG & Co. The Service Employees International Union-United Healthcare Workers West, which sponsored the referendum, has failed to push similar bills through the Democratic-controlled state legislature.
Critics say the referendum is merely an attempt by the union to punish dialysis companies, which have resisted efforts to allow clinic workers to organize. One major newspaper editorial board accused the union of hijacking the ballot process to wage a labor battle.
“The initiative process is not the place to tilt the scales in a labor dispute,” the San Francisco Chronicle said in a Sept. 9 editorial.
DaVita and Fresenius, which treat almost 70% of dialysis patients in the state, are the biggest donors to the opposition effort, according to the office of the California secretary of state. The total raised is the most for a single California ballot initiative in at least two years, approaching the $109 million spent by pharmaceutical companies against a proposal to lower drug prices in 2016.
The union, which has contributed $17 million to support the measure, says limiting revenue would force companies like Davita and Fresenius to spend more on what it says is inadequate patient care, sanitation and staffing. The labor group said it’s not surprising that it’s being outgunned financially by the two dialysis giants.
“This is their profits on the line,” said Sean Wherley, a union spokesman. “This is their business model. What is shocking is that they act as if they will lose everything when in reality they will maintain handsome profits. Just not the obscene profits they make today.”
DaVita and Fresenius earn almost $400 million each year in California, according to the ballot initiative.