In summary

An influential union wants the state to limit profits on privately owned dialysis clinics, where kidney patients receive life-sustaining treatment. Dialysis companies are fighting back.

A battle is escalating between the dialysis industry and an influential union in California, with allegations on one side of shoddy practices in the treatment of kidney patients and accusations of political bullying on the other.

With a growing number of Californians on dialysis, the union has teed up an initiative for the November ballot that would rein in profits at 555 privately owned clinics where patients receive life-sustaining treatment. The measure would cap profits at 15 percent after most clinical costs.

And in Sacramento, legislators have been considering measures to regulate staffing, inspections and other elements of the dialysis industry.

Proponents say such moves could reduce infection and deaths for fragile kidney patients, partly by encouraging more investment in equipment and training. Their opponents argue that the initiative has nothing to do with improving patient care and could have the opposite effect—financially squeezing dialysis companies to the point where many would close, making it harder for patients to get the blood-cleansing treatment they need.

“The goal of this ballot initiative is to hold the dialysis industry accountable and improve life for patients and for the people who care for them every day,” said Sean Wherley, spokesman for the Service Employees International Union-United Healthcare Workers West union.

His labor group has ponied up $6 million so far to gather petition signatures and promote the initiative, according to campaign filings with the secretary of state’s office.

The measure wouldn’t require improvements in patient care. But Wherley said the profit limit, as well as allowing facility improvements and staff training incorporated into clinical costs, would give dialysis centers an incentive to invest in new equipment and improve hygiene practices.

Dialysis is prescribed for kidney failure. Machines do the kidneys’ work by purging toxins from patients’ blood over the course of several hours. Nearly 140,000 people received dialysis in California in 2016, according to the Office of Statewide Health Planning and Development, a 26 percent increase since 2011.

More than 10,000 dialysis patients died in California in 2016, a 2.5 percent rise from the previous year, according to an Assembly analysis. Infection and cardiac problems are the leading causes of death in kidney-failure patients.

Critics of dialysis centers say they’re money machines that often cut corners, putting patients at greater risk. What those centers need, proponents of the ballot measure say, is a swift kick in the wallet.

Union member Tangi Foster is a 60-year-old dialysis patient in Northridge, a Los Angeles suburb. She has received treatment three times a week for the past 10 years at various clinics.

“I started to notice unsanitary conditions,” said Foster, who has advocated for the November initiative. “Sometimes there were dirty floors. I’ve seen roaches. I’ve seen blood on the chairs.”

The state Department of Public Health received 577 complaints and found 370 deficiencies during a two-and-a-half-year period between 2014 and 2017—roughly 18 complaints and 12 deficiencies per month.

Those included complaints that patients’ vital signs weren’t checked by staff every 30 minutes as required by law and that translation services were not provided to non-English-speaking patients. One grievance accused staff members of failing to check the connection between a patient and machine, even though blood was inappropriately oozing from the patient’s medical port.

The depiction of dirty, unhygienic clinics as being commonplace is one Miguel Estrada takes personally. “No, no, no, that’s not right at all,” he said.

Estrada hooks patients to machines and monitors them at a dialysis center in the Bay Area. He’s seen or worked at dozens of centers, he said, and cleanliness is a constant among them: “That’s the most basic thing everyone knows, and that’s what we spend our lives doing—making the dialysis process as clean and safe as possible.”

Estrada said he’s pro-union, but he called the ballot measure a “political tactic” by union officials.

The centers are worried because the “direct patient care services costs” listed in the ballot measure do not include administrative costs such as payroll, human resources and legal expenses, nor payment for medical directors to oversee the clinics. All of those costs would have to come out of the 15 percent, translating into minuscule profit or none at all, Estrada said.

About 70 percent of the centers in California are owned by two large companies: DaVita Kidney Care and Fresenius Medical Care. They operate most of the dialysis clinics in the nation, and both turn healthy profits. DaVita, for example, recorded net income of $1 billion last year.

Those two companies are the money behind the organized opposition to the initiative, donating slightly more than $2.3 million so far.

Davita is one of two companies that dominate the dialysis industry.
DaVita is one of two companies that dominate the dialysis industry. Photo by Michael Rivera via Wikimedia

Kathy Fairbanks, the opponents’ representative, said the coalition against the measure also includes the California Medical Association and many patient-advocacy groups.

The measure “will harm patients,” she said. “If clinics close down, where will patients go?” They’ll end up in emergency rooms that aren’t equipped to handle a swell of people needing hours-long treatment, she said.

The union’s initiative is no more than a way to organize dialysis workers, Fairbanks said.

“Unionization is what they want, pure and simple,” she said. “They want to bring the dialysis community to the table and unionize it. This is just leverage.”

In the Legislature, only one proposal to change how dialysis centers are run is currently active, but it might not clear all legislative steps for passage this year.

Democratic state Sen. Connie Leyva of Chino wants to limit “third-party” payments for treatment. Dialysis companies sometimes pay a patient’s insurance premiums to make treatment possible, then collect payment for it from the insurers. Leyva wants to allow that arrangement only for patients not eligible for Medicare, Medi-Cal (California’s name for Medicaid) or subsidies through Covered California. Those government options are less expensive.

A union-backed bill by state Sen. Ricardo Lara, a Bell Gardens Democrat, is currently inactive but could be revived. It has cleared every hurdle except a vote of the full Assembly. It would set staffing ratios at dialysis centers and a minimum transition time between patients. Annual clinic inspections would replace the current regimen of every five or six years.

Legislation that would essentially have capped profits was introduced last year and later withdrawn. It also had union backing.

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Elizabeth Aguilera is an award-winning multimedia journalist who covers health and social services for CalMatters. She joined CalMatters in 2016 from Southern California Public Radio/KPCC 89.3 where she...