facebook Should we limit dialysis centers’ profits? Industry to fight California initiative

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Should there be a limit to dialysis centers’ profits? Industry prepared to spend millions to defeat California initiative

dialysis center

If you don’t live in California, you may never hear about Proposition 8, an initiative on the November ballot aimed at reining in profits made by dialysis companies. If you or a loved one requires this treatment, you might want to pay close attention to the vote no matter where you live.

Dialysis is the life-preserving option for people with end-stage renal disease. Multiple times each week, patients must go to dialysis clinics, where they spend several hours while their blood is filtered for waste products. The cost for one patient can run $90,000 a year.

The Los Angeles Times reports that two giant corporations, Denver-based DaVita and German-owned Fresenius, own 4,900 outpatient dialysis clinics serving about 400,000 patients nationwide. Together these two companies alone control 70 percent of the market.

And that near-monopoly control is profitable. In 2017, DaVita earned about $1.8 billion in pretax operating profit on dialysis revenue, and Fresenius reported pretax operating profit of $2.3 billion. That translates to profit margins of 18 or 19 percent.

Unfortunately, despite being flush with cash, studies have found for-profit dialysis companies have fewer staff than nonprofit or hospital-based dialysis clinics. And some studies suggest they have worse patient outcomes.

In 2017, DaVita earned about $1.8 billion in pretax operating profit on dialysis revenue, and Fresenius reported pretax operating profit of $2.3 billion.

A 2013 survey by the University of Virginia (and reported by the Los Angeles Times) found 35 percent fewer registered nurses and 42 percent fewer practical nurses at for-profit clinics compared to their non-profit counterparts.

Tangi Foster, a 60-year-old dialysis patient, told Pew’s Stateline News Service that technicians at her Southern California clinic are overworked and pressed to shorten turnaround times. She also questioned the sanitation, noting the cockroach that came home in her bag after one visit to the clinic.

California’s Proposition 8, brought by the Service Employees International and United Healthcare Workers Unions, would cap dialysis centers’ profits at 15 percent over what they spend on health services (such as salaries and equipment). A similar measure is pending in Ohio, and proponents and opponents alike expect the idea will spread to other states.

But will patients get better, more affordable care?

That’s up for debate.

Proposition 8 opponents say companies may simply shut down clinics and leave the state, should the measure pass.

Proponents say that the measure and the additional oversight would force clinics to invest more money in staff.

What do you think? Have you or a loved one needed dialysis? How did you manage the cost? Share your story with Voices for Affordable Health.