Why Prop 29 Is Putting Dialysis Clinic Reform Back on the November Ballot

On the ballot this November is the statewide ballot measure known as Proposition 29, also called the "Protect the Lives of Dialysis Patients Act."

It's the third ballot initiative since 2018 that has demanded changes to the operations of dialysis clinics.

Under the campaign "Californians for Kidney Dialysis Patient Protection," labor union SEIU United Healthcare Workers West (SEIU-UHW) has introduced all three of the propositions — including the prior two, which failed to receive enough votes to pass.

Here's Your Handy Guide to California Propositions for the November 2022 General Election

The difference now? First, where 2020's Prop 23 required a physician on site at all times, this year's Prop 29 requires an "advanced" practitioner — a physician, nurse practitioner or physician's assistant with six months of end-stage renal disease (ESRD) experience — to be present at all times. If there is a shortage of qualified persons, the state health department may allow for care to be provided through telehealth.

Prop 29 also requires clinics to disclose to patients when any of its physicians have 5% or more ownership interest in it — a new addition for the November 2022 election.

The remaining provisions remain largely unchanged.

According to SEIU-UHW Research Director David Miller, the rationale behind trying to get a dialysis proposition passed for a third time is simple. "We are defending the industry and trying to get physicians in the clinics to protect patients," he said.

But a spokesperson for No on 29, Kathy Fairbanks, suggests the organization's motivations may lie elsewhere: to pressure privately owned dialysis clinics into supporting unionization.

The coalition behind No on 29 — a.k.a. "Stop Yet Another Dangerous Dialysis Proposition" — includes two of the major dialysis providers in the country, DaVita Inc. and Fresenius Medical Care. Their combined contributions to the opposition campaign have been reported to be $36.70 million.

The Major Points of Prop 29

Over 80,000 patients in California currently receive dialysis treatment, a life-saving process that filters the blood when kidney function is reduced or the kidneys fail.

Treatments require visits to a dialysis clinic at least three times a week for several hours a session.

Here are the major points of what Prop 29 would require if it passes.

1. Infection Reporting

Studies show there are numerous risk factors for infection in kidney patients, including the use of dialysis catheters.

Dialysis patients currently have high mortality and hospitalization rates, along with the burden of having two or more serious medical conditions affecting their health.

Given Medicare's significant payments for ESRD services, government entities rigorously monitor each dialysis clinic. Currently, the Centers for Medicare & Medicaid (CMS) already require dialysis clinics to report infections, hospitalizations and deaths and also asks patients to provide input as to care provided by the nephrologists and clinics to the National Healthcare Safety Network.

Prop 29 requires the clinics to report infection information quarterly to the state department of health, and the department will post the information on its website.

2. Advanced Practitioner Onsite at All Times

If it passes, Prop 29 would require access to a physician or other advanced practitioner on site or via telehealth whenever dialysis treatment is being provided.

Federal regulations already require clinics to have a physician or kidney specialist (a.k.a. nephrologist) on staff — but not necessarily present during treatments, when dialysis patients may only have direct access to a registered nurse or other personnel who are on-site at all times.

However, staffing shortages in the wake of the COVID-19 pandemic have been rampant, garnering the attention and concern of organizations like the American Kidney Fund — which has spoken out against the resulting shortened treatment times and increase in patient deaths.

Supporters of Prop 29 believe that dialysis companies do not invest enough in patient care and safety and that increasing patient-doctor contact during dialysis could lead to better care.

In an op-ed published in The San Diego Union-Tribune, dialysis patient Carmen Cartegena urges, "We need a doctor on-site who can handle life-or-death situations in an emergency" — referring to a 2013 study that found more frequent contact with a physician to be linked to better survival rates among dialysis patients.

However, Becky Ness, Executive Director of the American Academy of Nephrology PAs, disagrees. She argues, "There is no data to support having a licensed provider at a clinic [at all times] would prevent infections or emergencies."

Opponents say that taking healthcare providers away from work where they are sorely needed, as many specialists work at more than one medical institutions or practices, will encumber the already strained medical labor market.

And each patient already has their own nephrologist, who governs their care and is legally required to meet with their patients at a clinic at least once a month to go over issues like changes in medication.

But Miller says that in situations when the patient's nephrologist is unavailable by telephone or in-person, an on-site advanced practitioner (as required by Prop 29) would be able to make changes and assist in emergency situations.

3. Physician Disclosure of Ownership in a Dialysis Clinic

Prop 29 also requires clinics to notify patients of a potential conflict of interest: when their nephrologist may have a financial stake in the dialysis clinic they're referring them to.

The argument is that owning 5% of more of a dialysis clinic may sway the physician to try to profit off the patients' care by sending them in for dialysis treatments that they might not necessarily need, instead of considering other interventions first.

However, some experts believe joint ventures could potentially improve care — but since the government doesn't collect that data, researchers have no way of knowing.

The Bottom Line

A major concern regarding Prop 29 is the cost involved in implementing the changes the ballot measure requires — and how clinics may be forced to reduce their operating hours or even close, which would interrupt patient access to life-saving services.

The Berkeley Research Group says the overall increased costs to clinics will be between $229 to $445 million annually, with an annual increased cost of $376,000 (for a physician assistant) to $731,000 (for a physician) per clinic, on average.

If clinics' operating margins were to fall to under 5 to 15%, BRG suggests, hundreds of clinics could close. And if they close, state costs will increase, due to some patients requiring treatment in costlier settings like hospitals. For those clinics that don't close, they may negotiate increased rates with insurance companies, which will likely increase patient out-of-pocket costs.

Clinics in rural areas and those that treat large numbers of Medi-Cal patients are particularly vulnerable to closure because their profit margins are smaller, and they likely will not be able to cover the increased costs. Twenty-five to 30% of clinics are owned by non-profits or smaller companies, which are also less likely to be able to shoulder the increased costs.

However, SEIU-UHW's spokesperson, Renée Saldaña says it's not patient care reforms — like those presumed by Prop 29 — that would be responsible for those closures. "[T]hey can't compete with the two big players that gobble up all the insurance contracts and the limited supply of medical partners. The core threat to small and non-profit providers are the market dominators."

"These small providers will continue to disappear regardless of our ballot," Miller added.