In Rural Communities, Dialysis Can Be Difficult To Access. Could Proposition 23 Make It Harder?

By Nina Sparling

For the second time in as many years, Californians will vote on a ballot measure this November proposing new regulations for dialysis clinics. But this year’s Proposition 23, SEIU labor union’s second attempt at changing how dialysis clinics operate, focuses on a new set of requirements compared to 2018’s Proposition 8.

The union-backed Proposition 8, which would have capped dialysis clinic profits, was among the most expensive ballot measures in California history. It failed considerably.

Proposition 23 switches the focus to operational regulations. If passed, it would require clinics to have a licensed physician on-site, to perform additional infection reporting, and provide the same care to patients regardless of how they’re paying for treatment, among other details.

Experts say those proposed regulations would cost clinics a lot — and warn they could have an outsized impact on the ones that serve California's most vulnerable residents, particularly in more rural parts of the state.

Like in 2018, the two biggest dialysis companies in California, DaVita and Fresenius, are spending big to defeat the ballot measure. The No on Prop 23 campaign has support from the California Medical Association, the California State Conference NAACP, and the American Nurses Association/California.

Opponents argue that the new requirements are not only unnecessary, but they would increase costs to an unsustainable point and force clinics to close. The nonpartisan California Legislative Analysts’ Office found that the physician requirement alone would cost clinics, on average, several hundred thousand dollars annually. But organized labor argues that the companies that run the majority of clinics in California can well afford the cost of a physician. DaVita reports over $10 billion in net worth; Fresenius over $25 billion.

“Part of the reason why they're very profitable is because they will close facilities that are unprofitable,” said Mark Stephens, owner of Prima Health Analytics.

Stephens says on average rural clinics struggle to make ends meet. According to 2018 Medicare data, rural dialysis clinics nationwide reported Medicare operating margins of negative 2.8%, meaning Medicare doesn’t pay enough to cover the cost of care. For urban centers, the number was 2.8%.

“Rural facilities tend to be more expensive to run and less profitable,” he said. “If anything is going to drive higher costs, particularly for these profit-driven, large dialysis organizations, the risk would potentially even be greater to rural patients.”

Dialysis patients living in rural places already travel much farther for regular treatment, too. Studies have shown rural dialysis patients travel two and half times farther to access treatment than patients living in urban areas.

Clinic closures could only exacerbate those differences. That concerns Dahlia Ackerman, a nurse at a DaVita dialysis clinic in Bakersfield, California. She grew up in Arvin, a town of about 21,000 people 20 miles from Bakersfield. She would drive to Bakersfield with her grandmother and sit with her during dialysis appointments. Now, Arvin has a DaVita dialysis clinic of its own, and Ackerman knows how much of a relief it is for its patients to have a clinic nearby.

“They're in their own hometown,” Ackerman said. “They don't have to travel that 35 minute, 45 minute, hour long commute.”

Shruti Gupta is the regional director of the DaVita clinics in Bakersfield and surrounding areas, including Arvin. Her concern is mostly about being able to find enough physicians to fulfill Proposition 23’s requirement, especially in smaller towns. Finding doctors willing to work in rural parts of the state that already lack healthcare services won’t be easy in the midst of a statewide physician shortage, she says.

“Some of these areas are so remote and so rural, that it's difficult to find any medical practitioners,” Gupta said. “These are not the places where it's easier to find talent.”

For 10 years, Carmen Cartagena has been to dialysis three times a week at the DaVita clinic in Walnut Creek. Lately, Cartagena has been hanging a Yes on Prop 23 sign around her dialysis chair. She stopped working her job at a department store during the pandemic to limit her potential exposure to COVID-19. Especially now, she said she would feel safer during her three-hour treatments, three times a week with the additional reporting requirements and knowledge that there was a physician on-site at all times.

“You have no idea what could possibly happen while you're on dialysis. A lot of us are already sick with other issues,” Cartagena said. “For me personally that's why having a doctor on staff is important.”

Both DaVita and Fresenius have poured millions of dollars into defeating the ballot measure. In 2018, the No on Prop 8 campaign raised over $111 million to defeat Proposition 8. DaVita and Fresenius contributed the vast majority of those funds. As of mid-September, DaVita, Fresenius, and others had spent over $90 million dollars in hopes of defeating Proposition 23.