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Prop 8 -- The Dialysis Doozy

Prop 8 would cap Chronic Dialysis Clinic revenue at 115% of direct patient care costs and healthcare improvement costs (“allowable expenses”). It was put on the ballot by a healthcare workers’ union.

While the intent is to raise wages for workers, improve clinic conditions, and reduce patient costs, there is a lot of uncertainty about how the clinics could respond and uncertainty about the fiscal effects, with much left open to interpretation by the California Dept of Public Health, the courts, and the clinics. It could make things better if the clinics and insurers choose to do what we hope they'll do. Or it could make things worse. The clinics could respond to the revenue cap by increasing wages and benefits for non-managerial staff (“allowable costs”), but they might not...They could instead choose to cut other costs in ways that make things more difficult for workers and patients. The financial impact for state and local governments could be net positive in the tens of millions...or net negative in the tens of millions.

The legislative analysis says, ahem, "The rates that Medicare and Medi-Cal pay for dialysis treatment are relatively close to average cost for CDCs to provide a dialysis treatment and are largely determined by regulation," soooooo the prop likely won't have much effect as far as Medicare and Medi-Cal are concerned. The majority of dialysis is paid for by these two programs. As for private insurers (who pay multiple times what the government programs pay for dialysis)...even if private insurers pay less for dialysis treatment, we don't trust that they'll pass all (or any) of those savings on to the insured without being required.

Uh… who trusts their medical insurance to keep their payments low?  Not me!

It's hard to tell to what degree the clinics might respond by abruptly scaling back operations and forcing seriously ill patients into already over-burdened ERs, but the idea that that could be life-threatening or fatal for many is cause for a pause. Would the clinics will put their patients' immediate needs above their profit margin in this battle? Seems doubtful.

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If the outcome of the this prop is not the outcome we want, the damage could be difficult to undo. Some of the underlying issues could be addressed more directly by the legislature and the health department. Hopefully just having it on the ballot gives the workers some leverage.

No no no -- 13; Yuppers -- 0; Indecisive -- Zero

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