California dialysis clinics on the ballot for the third time

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California ballot measures have generated eye-popping spending by special interest groups and industries, sometimes even when they have little chance of winning at the ballot box.

Just ask California’s dialysis clinics, who for the third time in as many elections, are fighting back a bid by a health care workers union to change their business model. And nearing the end of round three, it has become one of the most expensive proposition fights in Golden State history.

Since 2018 the dialysis companies have spent more than $302 million to oppose the measures, and that number is likely to continue to grow through November. That is more than the $205 million Uber, Lyft and Doordash spent in 2020 on a measure to exempt their companies from a state law that classified their drivers as employees. But it is still shy of the record-breaking $400 million spent so far this year by online gaming and tribal casinos on both sides of Propositions 26 and 27, which would legalize sports gambling.

Proposition 29 is the latest attempt by the Service Employees International Union-United Healthcare Workers West union (SEIU-UHW) to challenge the dialysis industry status-quo with new regulations, even after voters rejected the union’s attempts twice. So why are they trying a third time?

The “No on 29” campaign, backed by the dialysis companies, says the union is abusing California’s direct democracy system, trying to push the companies to the negotiating table and gain leverage. But the union says the dialysis industry is making huge profits off vulnerable patients. Proposition 29 backers insist they are just using the tools available to check corporate power, and accomplish their broader policy goals.

The spending trends by each side are telling: The dialysis companies spent over $100 million in 2018 and again in 2020. This time, as of late September 2022, they had poured $86 million into opposing Proposition 29, but the union is hardly campaigning for the measure this year, since getting it on the ballot.

The newest proposition is “a carbon copy” of the 2020 measure, according to Kathy Fairbanks, spokesperson for the “No on 29” campaign. She questions the union’s commitment to getting the measure passed, pointing out they only put up a “Yes on 29” website last week, in late September. “They got in on the ballot and that was enough for them,” she said. “They’re just walking away.”

SEIU-UHW spent nearly $20 million on the first dialysis proposition in 2018, including millions on advertising. But in 2020 the union spent half that, around $9 million. So far in the 2021/2022 season, the union has amassed $8 million, spent almost entirely on signature collecting to qualify the measure.

The battle over dialysis clinics isn’t the only proposition this year where victory at the ballot box may not be the end goal.

Big Tobacco has contributed $16 million to an effort to overturn a state law that bans the sale of flavored tobacco products. Even if it doesn’t win, the tobacco industry was able to delay the ban for nearly two years just by qualifying the measure for the ballot, clearing the way for hundreds of millions of dollars in continued sales.

And earlier this year, after seeing their bills to reduce plastic pollution defeated repeatedly in the Legislature, environmental groups collected enough signatures to place a measure on the ballot requiring companies to use less plastic and take back their products for recycling. Fearing a loss at the ballot box, the companies then worked out a compromise, Gov. Gavin Newsom signed the bill, and the environmental groups pulled the measure off the ballot.

Not everyone buys the argument that the health care workers union is just trying to kneecap the dialysis industry to have a better seat at a future bargaining table. “If the union had some deep 3D chess political game about union membership, you would think after two defeats they might have picked something else by now,” said Shaun Bowler, a political science professor at UC Riverside.

David Miller, research director for the SEIU-UHW, says the union’s goal is simple: patient safety.

“We are trying to add one staff person per shift to these dialysis clinics,” he said of the proposition’s requirement that clinics have a doctor, physician assistant or nurse practitioner on-site during treatment. “It’s not very radical.”

Dialysis clinics are where about 80,000 Californians with end-stage kidney disease go to get treatments two to three times a week, an expensive and life-saving procedure. The two companies that dominate the industry in California, DaVita and Fresenius, operate three-quarters of the 600 clinics in the state. The industry brings in an estimated $3.5 billion in revenue from operations in California annually.

The dialysis companies say the added regulations and associated costs could force them to close clinics, making it a “dangerous” proposition that could hurt patients. The California Legislative Analyst’s Office predicts the measure “would increase each clinic’s costs by several hundred thousand dollars annually on average.”

Miller said his union was approached years ago to help unionize some dialysis workers, which opened their eyes to how the industry works and what kind of changes they could push.

Dave Regan, the current president of SEIU-UHW, has made a reputation for himself and his union by sponsoring local and statewide ballot measures each year, and on their website, they brag that “Regan is a leading proponent of using ballot initiatives to reduce economic inequality and improve the standard of living for working people and their families.” Those measures have been about issues ranging from raising the minimum wage to hospital prices and CEO pay.

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