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Denver’s DaVita spends big to defeat California dialysis measure

Author: Associated Press - October 11, 2018 - Updated: October 11, 2018

Adrian Perez undergoes dialysis at a DaVita Kidney Care clinic in Sacramento, Calif. If approved by voters in November, Proposition 8, would limit dialysis clinics’ profits. (AP Photo/Rich Pedroncelli)

By Sophia Bollag, Associated Press

SACRAMENTO, Calif. — A ballot measure restricting profits at dialysis clinics has overtaken initiatives on the gas tax and rent control to become the most expensive California proposition this cycle.

And Denver-based dialysis giant DaVita Inc. is spending tens of millions to dollars to help defeat the measure.

Proposition 8 on the California November ballot would cap profits for dialysis clinics, which provide vital treatment for people without functioning kidneys.

A registered political committee opposing the proposition had rased $78.2 million as of late September, according to campaign finance reports, with 52 percent of the total coming from DaVita. Another dialysis company, Fresenius Medical Care North America, donated 36 percent.

Meanwhile, the Service Employees International Union-United Healthcare Workers West has poured roughly $20 million into the campaign to pass the measure. The union argues Proposition 8 will stop the dialysis companies from cutting corners and force them to invest more of their profits into patient care.

DaVita’s involvement in the California measure comes as its chairman and chief executive, Kent Thiry, has been active in Colorado in backing a pair of ballot measures that would reform how the state draws boundaries for its congressional and legislative districts.

Dialysis providers say the California measure is actually a tactic to pressure the dialysis companies to let workers unionize and would force clinics to close.

“This basically will not make it possible to operate a facility and even cover your costs in California” said Rick Barnett, who runs the largest nonprofit dialysis provider in California, Satellite Healthcare, which operates dozens of clinics in the state. “The consequences of that are dire for patients.”

The measure will count essential costs for management positions toward a clinic’s profits, Barnett said. The measure doesn’t say exactly which costs would count toward the limit, but Barnett says he calculates Satellite Healthcare will lose $40 million if the initiative passes, putting it out of business and imperiling patients.

DeWayne Cox, a dialysis patient who receives treatment at a DaVita clinic in Los Angeles, said he views the initiative as a political ploy by the union. If the goal were improving patient care, it should have been narrowly tailored to address that issue, he said.

“I think that this is frankly a pissing match between the unions and the two major dialysis providers,” Cox said. “The biggest problem is that patients are caught in the middle.”

Tangi Foster, another dialysis patient in Los Angeles, is working with the union to promote Proposition 8. She said she believes dialysis clinics prioritize profits over patients and pointed to the millions in spending by the providers as evidence.

“What that tells me is you have the money to fix this issue, you choose not to,” she said. “All this money is made on the backs of terminally ill, mostly seniors — now how wrong is that?”

The measure will push dialysis companies to hire more staff, purchase new equipment and improve facilities, SEIU-UHW spokesman Sean Wherley said.

“They will still make a handsome profit under this initiative, it just won’t be an obscene profit,” he said.

Colorado Politics contributed.

Associated Press

Associated Press