The Question

Should outpatient dialysis clinics be required to have a physician on-site at all hours when patients are being treated, offer the same level of care to all patients regardless of insurance, and report infection-related information?

The Situation

People suffering from End-Stage Renal Disease, the final stage of kidney disease, must receive dialysis to survive. Dialysis filters out waste and toxins from the blood. It is typically done in a chronic dialysis clinic three times a week with each treatment lasting up to four hours. To address patients’ needs, clinics often operate six days a week for extended hours. These clinics are licensed by the California Department of Public Health using federal certification standards, which have limited requirements about staffing hours or ratios.

Approximately 600 licensed clinics operate in California. The majority of the clinics are owned and run by one of two private for-profit companies. The estimated annual revenue of the private companies is $3 billion. Most dialysis is paid for by Medicare and Medi-Cal. These government programs pay a fixed rate established by regulation and close to the average cost of treatment. Private insurance also covers dialysis with payment rates fixed by negotiation with the providers. On average those rates are multiple times higher than those paid by the government programs.

The Proposal:

Prop 23 says that clinics must:

• Have at least one licensed physician on-site during all hours when patients are receiving treatment. An exemption may be granted if no qualified physician is available but a nurse practitioner or physician assistant is on site.
• Offer the same level of care to all patients regardless of whether treatment is paid for by private insurance or a government program.
• Report more information about infections among their patients to the state health department, with penalties for non-reporting.
• Notify and obtain consent from the state health department before closing or reducing services.

Fiscal Effect:

Prop 23 could increase costs for clinics because a licensed physician would have to be present during all treatment hours.  This could average several hundred thousand dollars per year per clinic. The new data-reporting requirement would not significantly increase costs.

Prop 23 could increase healthcare costs to state and local governments if clinics negotiate higher reimbursement rates or if some clinics close and patients have to receive treatment at more expensive facilities. These costs are estimated to be in the low tens of millions of dollars annually.

Supporters Say:

• Patients should have access to a physician on-site whenever dialysis treatment is being provided.
• Proper reporting and transparency of infection rates encourage clinics to improve quality.
• Strong protections should be provided to vulnerable patients when clinics close.

Opponents Say:

• Prop 23 would force community dialysis clinics to cut services or close, putting lives at risk.
• Prop 23 would make our physician shortage worse and lead to more overcrowding in emergency rooms.
• Dialysis clinics are already strictly regulated and provide high-quality care