Prop. 8: Curiouser and Curiouser

Prop. 8: Curiouser and Curiouser

On the California ballot this November is a state measure that would cap dialysis clinics’ profits at 15 percent, forcing them to offer rebates to insurance companies at the end of every year if dialysis companies’ margins exceed that cap.  About 66,000 people need dialysis treatments in the state.  With a population of 37 million, this means that only one in 560 Californians may be affected by this initiative.

The typical California voter has to be truly perplexed at being asked to weigh in on the profits of dialysis companies.  But in the Alice-in-Wonderland world of California politics – it’s easy to believe how lots of impossible things can happen before Election Day.  To help give Californians some clarity on Prop. 8, consider this:

Curiosity #1 – Voters who have no financial stake in dialysis companies or who don’t know anyone on dialysis are being asked to set the profits of dialysis companies. We can go into macroeconomic theory and how market forces are best able to set prices and optimally serve customers – but there’s no need.  Californians with common sense know that voting “yes” or “no” is no way to run a company or make decisions on behalf of patients’ complex health care needs.

Curiosity #2 – The ballot initiative doesn’t require dialysis clinics to invest in patient care, but proponents hope that setting caps on profits would incentivize clinics to do so. I have a hard time connecting the dots here.  The more revenue a company generates, the more cash it has to plow back into the company to improve its facilities, invest in innovative technologies, and hire the best people (and yes, pay them better).  The less revenue, the less cash it has to do anything.

Curiosity #3 – Proponents who are unsatisfied with patient care expect that limiting dialysis companies’ profits will lead to better care.  See Curiosity #2.  If dialysis patients are being poorly served, they should work through patient advocacy groups to have their concerns heard in the legislature or reported to the California Department of Public Health.  If improvements need to be made, the best way to achieve them is through regulatory reform.

Curiosity #4 – The unions are the big backers of Prop. 8.  The unions have a history of advancing their agenda through propositions said Ken Jacobs, chair of UC-Berkeley’s Labor CenterKathy Fairbanks, spokesperson for Prop. 8’s opponents explains: “In the past . . . they’ve put in propositions that would take a strong financial bite out of hospitals and dialysis clinics. It’s a tool they were using for their organizing efforts.” Apparently, the unions have been trying unsuccessfully to organize workers in dialysis clinics for several years.

It’s hard for even think tank wonks — let alone the typical hardworking Californian — to get up to speed on all the candidates and measures we’re expected to vote on.  But when in doubt, it often helps to look at a proposition’s backers.

While most Californians don’t have a direct stake on the outcome of Prop. 8, we care about our fellow residents who do.  In this case, Prop. 8 is opposed by the California Medical Association, the National Kidney Foundation, the American Nurses Association/California, and the two major providers of kidney dialysis clinics. It’s easy to see why the two companies are against Prop. 8, but we should note that the organizations that care most about patients – doctors, nurses, and patients – oppose Prop. 8.  This should tell voters who’s really putting patients’ interest first.

Rowena Itchon is senior vice president of the Pacific Research Institute

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.