Dialysis Industry Spends Millions, Emerges as Power Player in California Politics

SACRAMENTO — The nation’s dialysis industry has poured $233 million into California campaigns over the past four years, establishing its leading companies as a formidable political force eager to protect their bottom line and influence state policy.


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Most of the money the industry spent from Jan. 1, 2017, through Nov. 30, 2020, funded the defeat of two union-backed ballot measures that would have regulated dialysis clinics — and eaten into their profits. But the companies and their trade association also stepped up their offense, dedicating about $16.4 million to lobbying and political contributions during the same period, a California Healthline analysis of state campaign finance records shows.

Nearly every member of the legislature, Democratic Gov. Gavin Newsom and his predecessor, former Gov. Jerry Brown, the Democratic and Republican parties, and dozens of political campaigns — including some local school board and city council races — received a contribution from a dialysis company.

“These are very large, very profitable companies,” said Mark Stephens, founder of Prima Health Analytics, a health economics research and consulting firm. “They have a lot to lose. The fear would be that if some of this stuff passed in California, the union would certainly try to get similar measures on the ballot or in the legislatures in other states. The stakes are higher than just California for them.”

Staking Ground in Sacramento

California has about 600 dialysis clinics, which are visited by an estimated 80,000 patients each month, typically three times a week. At the clinics, patients are hooked up to machines that filter toxins and remove excess fluid from their blood because their kidneys can no longer do the job.

Medicare, which covers most dialysis patients, pays a base rate of $239.33 for each dialysis treatment.

DaVita and Fresenius Medical Care North America are the largest dialysis providers in the state and country, operating roughly 80% of clinics nationwide. Last year, DaVita reported $811 million in net income, on revenue of $11.4 billion. Fresenius posted $2 billion in operating income on revenue of $13.6 billion.

DaVita was responsible for about $143 million — or more than three-fifths — of the political spending in the past four years, and Fresenius gave about $68 million.

Until four years ago, the dialysis industry’s political spending was relatively modest compared with that of the hospital, physician and other health care associations so well known in Sacramento. In those days, dialysis lobbyists focused on regulatory issues and health care reimbursement rates, and companies gave minimal campaign contributions.

The industry’s transformation into one of the biggest spenders in California politics began in 2017, the first of four years in which it faced ballot or legislative threats. In 2017, a Democratic lawmaker introduced a bill that would have set strict staff ratios at dialysis clinics. The bill, SB-349, which failed, had faced opposition from the California Hospital Association, the California Chamber of Commerce and the dialysis industry.

The SEIU-United Healthcare Workers West union (SEIU-UHW) followed the next year with Proposition 8, a ballot initiative that would have capped industry profits.

DaVita and Fresenius were forced to defend their huge profits and allegations of subpar patient care, turning the competitors into allies — at least in politics.

The industry spent $111 million to successfully defeat the measure, breaking the record for spending by one side on an initiative.

“I think it’s very natural for these private chains to spend millions to make billions of profits,” said Ryan McDevitt, associate professor of economics at Duke University. “They’re lobbying to protect their profits.”

Last year, the industry fought AB-290, a bill that aimed to stop a billing practice dialysis companies use to get higher insurance reimbursements for some low-income patients. But the legislature wasn’t swayed, and Newsom signed the bill into law, which is now tied up in federal court.

And this year, the industry spent $105 million to block Proposition 23, which would have required every clinic have a physician on site and institute other patient safety protocols.

Kent Thiry, the former chairman and CEO of DaVita, said the industry had no choice but to spend heavily to defeat the ballot measures, which he said would have increased costs and harmed patient care.

“When someone does that, you have to use some of your money to defend yourself, your patients and your teammates,” Thiry said in an interview with KHN, which publishes California Healthline. “It forces companies to allocate precious resources to do something that never should have been brought up to start with.”

In an emailed statement, DaVita said it would continue to work to “educate lawmakers and defend against policy measures that are harmful to our patients.” Fresenius also defended its advocacy, saying the company needs to protect itself against special interests intent on abusing the political system. The company will “continue to support legislation that improves access to quality care and improves patient outcomes,” said Brad Puffer, a company spokesperson.

By comparison, SEIU-UHW, which sponsored the ballot measures, spent about $25 million to advocate for the initiatives, and $7.8 million on lobbying and political contributions. The union lobbies lawmakers on a wide array of health care issues

“They’ve got tons of money. We understand that,” said Dave Regan, the union’s president. “We’ve seen them spend a quarter of a billion dollars in a very short period of time. I hope they’re prepared to spend another quarter of a billion dollars, because we’re not going to go away until there’s legitimate commonsense reforms to this industry.”

From Defense to Offense

While most of dialysis companies’ political spending in California has been used to defeat ballot measures, several of the largest companies also dedicated about $16.4 million to lobbying and political contributions over the past four years.

The companies and their trade association, the California Dialysis Council, put almost three-fourths of that — nearly $12 million — into hiring veteran lobbyists to advocate for dialysis companies when lawmakers consider legislation that could affect the industry.

For instance, when Newsom took office in 2019, both DaVita and Fresenius added Axiom Advisors to their lobbying teams, paying it $737,500 since then. One of the firm’s partners is Newsom’s longtime friend Jason Kinney, whose close relationship with the governor was highlighted by the recent French Laundry dinner fiasco. Newsom came under intense criticism for attending the early November dinner at the exclusive restaurant, held to celebrate Kinney’s birthday, because he and his administration were asking Californians not to gather.

The industry has also given at least $4.6 million in contributions to political candidates and committees, both directly and to entities on behalf of a lawmaker or candidate.

All but five state senators and Assembly members who served during the 2019-20 legislative session received a direct contribution from at least one of the companies or the California Dialysis Council.

Most of the donations to individuals went to state lawmakers, but DaVita dipped into local races, too. For instance, it contributed $10,000 to a Glendale city council candidate in February, $7,700 to an El Monte school board candidate in October and $3,500 to a Signal Hill city council candidate last year.

Dialysis companies also gave to the state Democratic and Republican parties.

“They’re spreading it out. They’re doing the full gambit,” said Bob Stern, former general counsel for the California Fair Political Practices Commission, which enforces state political campaign and lobbying laws.

Legal Loopholes

State law limits how much a company or person can give to a political candidate in an election, but there are legal loopholes that allow individuals and corporate interests to give more. The dialysis industry has taken advantage of them.

Under state campaign finance rules, lawmakers can accept only $4,700 from any one person or company per election.

But some lawmakers operate “ballot measure committees” so they can accept unlimited contributions. These committees are supposed to advocate for a ballot measure, but lawmakers often use them to pay for political consultants and marketing, and to contribute to state and local initiatives they support. Candidates can also get unlimited help from donors who independently pay for campaign costs, such as mailings and digital campaign ads.

For instance, DaVita chipped in $93,505 to help pay for a direct mail campaign on behalf of state Sen. Steve Glazer (D-Orinda) in this year’s primary election. Glazer also received $55,600 from DaVita, Fresenius and the California Dialysis Council in contributions to himself and his ballot committee, Citizens for a Better California.

In some cases, lawmakers such as Glazer who netted some of the biggest contributions from dialysis companies voted with the industry. That was the case last year when the legislature approved AB-290, the bill limiting the dialysis billing practice.

Glazer voted no, as did Assembly member Adam Gray (D-Merced), whose Valley Solutions ballot measure committee had received $112,500 from DaVita and Fresenius since 2017. Gray also received $36,900 in direct contributions from Fresenius, DaVita and U.S. Renal Care.

Gray issued a statement saying campaign contributions play “zero role” in how he represents his district. Glazer did not respond to a request for comment.

Targeting Legislative Adversaries

Assembly member Reggie Jones-Sawyer’s 84-year-old mother is on dialysis. The Los Angeles Democrat and SEIU-UHW member has called for improved staffing ratios at dialysis clinics and has voted repeatedly to regulate them.

DaVita wrote a $249,000 check in October to a political committee supporting Jones-Sawyer’s opponent, Efren Martinez, another Democrat, but one the industry considered more friendly. DaVita followed up with a $15,000 check the week before the election.

Jones-Sawyer, who won the race, said he’s frustrated dialysis companies aren’t willing to make changes to improve patient safety on their own, saying it would cost them far less than the nearly quarter-billion dollars they have spent on political contributions. So for now, he said, he will continue to push to improve conditions at dialysis clinics from the Capitol, despite the industry’s growing political clout.

“I think dialysis is saying, ‘Look, we can be the 800-pound gorilla now,’” Sawyer said. “It’s not just influence for a day; it’s longevity.”

Rae Ellen Bichell and Elizabeth Lucas of KHN contributed to this report.

Methodology

How California Healthline compiled data about dialysis companies’ political spending

Among the ways dialysis companies exert influence on the political process is by contributing money to campaigns; hiring lobbyists; and paying for advertising and marketing on behalf of candidates.

Opposition to ballot measures: Using the California secretary of state’s website, California Healthline downloaded the contributions made by DaVita, Fresenius Medical Care North America, U.S. Renal Care, Satellite Healthcare, Dialysis Clinic Inc. and American Renal Management to the campaign committees formed to defeat Propositions 8 and 23. This includes some non-monetary contributions.

Lobbying: We created a spreadsheet of expenses reported on lobbying disclosure forms, also available on the secretary of state’s website, by DaVita, Fresenius, U.S. Renal Care, Satellite Healthcare and the California Dialysis Council. We found details about how much the industry paid lobbying firms, what agencies it lobbied and which bills it tracked.

Political contributions: DaVita, Fresenius, U.S. Renal Care and the California Dialysis Council made direct contributions to more than 100 candidates, which we compiled from the secretary of state’s website. DaVita and Fresenius made other contributions, often large, to Democratic and Republican committees, and ballot measure committees led by lawmakers. The two companies also made contributions known as “independent expenditures” that benefited candidates’ campaigns and “behested payments,” which are donations to nonprofit organizations and charities in lawmakers’ names. Behested payments are disclosed on the California Fair Political Practices Commission website.

The SEIU-United Health Care West union uses two political committees for its giving. Its PAC contributes mostly to lawmakers and county and state Democratic parties while its Issues Committee gives to local hospital ballot measures. We did not tally spending for local hospital ballot measures for this story, but we did include contributions made by the Issues Committee to the California Democratic Party, which helps state lawmakers.

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

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During ACA Open Enrollment, Picking a Plan Invites New COVID Complications

People buying their own health insurance have even more to think about this year, particularly those post-COVID-19 patients with lingering health concerns, the “long haulers,” who join the club of Americans with preexisting conditions.

What type of plan is best for someone with an unpredictable, ongoing medical concern? That question is popping up on online chat sites dedicated to long haulers and among people reaching out for assistance in selecting insurance coverage.

“We are hearing from a lot of people who have had COVID and want to be able to deal with the long-term effects they are still suffering,” said Mark Van Arnam, director of the North Carolina Navigator Consortium, a group of organizations that offer free help to state residents enrolling in insurance.

The good news for those shopping for their own coverage is that the Affordable Care Act bars insurers from discriminating against people with medical conditions or charging them more than healthier policyholders. Former COVID patients could face a range of physical or mental effects, including lung damage, heart or neurological concerns, anxiety and depression. Although some of these issues will dissipate with time, others may turn out to be long-standing problems.

So sign up, said Van Arnam and others to whom KHN reached out for tips on what people with post-COVID-19 should consider when selecting coverage. There’s no one-size-fits-all answer, but they all emphasized the need to consider a wide range of factors.

But don’t delay. Open enrollment in ACA plans is ongoing until Dec. 15 in most states — longer in some of the 14 states and the District of Columbia that run their own marketplaces.

Here are tips if you are shopping for health insurance, especially if you are a COVID long hauler or have other health issues:

Make sure to select an ACA-qualified plan.

It may be tempting to consider other, often far less expensive types of coverage offered by insurers, brokers, organizations and private websites. But those non-ACA plans offer less comprehensive coverage — and are not eligible for federal subsidies to help people who qualify cover the cost of the premiums. These are key factors for patients experiencing medical problems after battling the coronavirus.

Short-term, limited-duration plans, for example, are cheaper, but the insurers offering them don’t have to accept people with preexisting conditions — or, if they do enroll those people, the plans don’t cover the members’ medical conditions. Many short-term plans don’t cover benefits such as prescription drugs or mental health care.

Another type of plan that doesn’t meet ACA requirements are “sharing ministries,” in which members agree to pay one another’s medical bills. But such payments aren’t guaranteed — and many don’t cover anything considered preexisting.

Shop around to consider all the ACA plans available in your region.

This will help you meet your post-COVID medical needs while also getting the best buy.

Comparison-shopping also lets consumers adjust their income information, which may have changed from last year, especially after being sick, and could affect subsidy levels for those eligible for assistance in purchasing a plan.

Under the ACA, subsidies to offset premium costs are available on a sliding scale for people who earn between 100% and 400% of the federal poverty level. That range next year is $12,760 to $51,040 for an individual and $26,200 to $104,800 for a family of four.

Networks matter. Look for your doctor or hospital in the plan.

One of the first things to do once you’ve narrowed down your choices of plans is to dig deeper to see if the doctors, specialists and hospitals you use are included in those plans’ networks. Also, check plan formularies to see if the prescription medications you take are covered.

Many insurance plans don’t have out-of-network benefits, except for emergency care. That means if a doctor or hospital doesn’t participate in the network, consumers must switch medical providers or risk huge bills by receiving out-of-network care. This should be a concern for long haulers.

This subset of COVID patients who report lingering health concerns may need to see a range of specialists, including pulmonologists, cardiologists, neurologists, rheumatologists and mental health professionals.

“So, you are already talking about five or six,” said Erika Sward, assistant vice president for national advocacy at the American Lung Association.

To check the network status of medical providers, go to the healthcare.gov website, which will direct you to your state site if you are in one of the 14 states or the District of Columbia, which run their own. Enter a ZIP code and some other information to start looking for available plans.

Narrow the search using the “add your medical providers” button on healthcare.gov, or access each plan’s “provider directory” under plan documents to see which specific doctors and hospitals are included. To be safe, Sward said, call each office to make sure they are participating with that insurer next year.

Don’t just look at premium costs: Deductibles also matter.

Consumers must pay deductible amounts before the bulk of financial assistance kicks in. That can be a big hit, especially for those who need complex care all at once or very expensive prescription drugs. Long haulers, as well as others with chronic health conditions, often fall into this category.

Median deductibles — the mark at which half cost more and half cost less — vary across the different “tiers” of ACA plans, hitting $6,992 for bronze plans; $4,879 for silver plans and $1,533 for gold plans, according to an analysis by the Centers for Medicare & Medicaid Services.

Generally, plans with higher deductibles have lower monthly premiums. But getting past the deductible is a challenge for many.

What’s best for those with ongoing health conditions depends on individual circumstances.

“Balancing the deductibles and premiums is a really important consideration for consumers,” said Laurie Whitsel, vice president of policy research and translation at the American Heart Association.

Those with ongoing health conditions need to carefully weigh the expected annual out-of-pocket costs for various health plans, given that they may well be moderate to high users of health services. Healthcare.gov has a financial estimator tool that can help with the decision. Consumers can select whether they think they will have low, medium or high medical use next year to see the estimated total annual costs of each plan.

Frequent users of health services may discover that plans that initially seem least expensive, based solely on the premium or the deductible, may be costlier once all out-of-pocket factors are considered.

Finally, insurers in some markets are touting zero-deductible plans.

Instead of an annual deductible, such policies have higher copayment or coinsurance amounts each time a patient sees a doctor, gets a test or has surgery. Those can range from $50 to more than $1,000, depending on the visit, test or service provided. Still, for some costly services, those payments may amount to less than paying a deductible.

Broker John Dodd in Columbus, Ohio, said such plans appeal to some people who don’t want to have to shell out thousands of dollars in deductible payments before their insurance picks up the bulk of medical costs.

Still, he cautioned that many of the zero-deductible plans do have what can be a sizable deductible — hundreds or even thousands of dollars — for brand-name prescription drugs.

Long haulers should weigh those factors carefully, as such zero-deductible plans may be more suited to those who don’t expect to use a lot of medical care.

Read the fine print, because there are other costs.

While plans may tout similar premiums, their dissimilar structures could affect how much a consumer will shell out in flat-dollar copayments or percentage coinsurance to see a doctor, pick up a prescription, get a blood test or spend the night in the hospital. This is, again, something long haulers should focus on.

These details are spelled out in the plan’s “summary of benefits,” a required document under the ACA, which can be found on healthcare.gov or insurers’ websites.

Still, ACA plans limit how much a consumer must pay out-of-pocket for the year. Next year, the maximum is $8,550 for an individual or $17,100 for a family plan.

Ask for help.

While services such as Van Arman’s navigator program have seen stiff budget cuts during the past few years, consumers there and in many states still have access to online or phone help. Healthcare.gov has a “find local help” button that can refer people by ZIP code to navigators, assisters and brokers.

Finally, those affected by COVID who miss the open enrollment deadline can request an extension under rules that allow special enrollment for emergencies or disasters.

“It’s not a guarantee and you have to telephone the call center and ask for it,” said Karen Pollitz, a senior fellow at KFF.

Still, she said, it’s best to sign up before Dec. 15.

“Just get it done,” Pollitz said.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

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Push Is On in US to Figure Out South Asians’ High Heart Risks

For years, Sharad Acharya’s frequent hikes in the mountains outside Denver would leave him short of breath. But a real wake-up call came three years ago when he suddenly struggled to breathe while walking through an airport.

An electrocardiogram revealed that Acharya, a Nepali American from Broomfield, Colorado, had an irregular heartbeat on top of the high blood pressure he already knew about. He had to immediately undergo triple bypass surgery and get seven stents.

Acharya, now 54, thought of his late father and his many uncles who have had heart problems.

“It’s part of my genetics, for sure,” he said.

South Asian Americans — people with roots in Nepal, India, Pakistan, Sri Lanka, Bangladesh, Bhutan and the Maldives — have a disproportionately higher risk of heart disease and other cardiovascular ailments. Worldwide, South Asians account for 60% of all heart disease cases, even though — at 2 billion people — they make up only a quarter of the planet’s population.

In the United States, there’s increasing attention on these risks for Americans of South Asian descent, a growing population of about 5.4 million. Health care professionals attribute the problem to a mix of genetic, cultural and lifestyle influences — but researchers are advocating for more resources to fully understand it.

Rep. Pramila Jayapal (D-Wash.) is sponsoring legislation that would direct $5 million over the next five years toward research into heart disease among South Asian Americans and raising awareness of the issue. The bill passed the U.S. House in September and is up for consideration in the Senate.

The issue could gain more attention after Sen. Kamala Harris (D-Calif.) becomes the nation’s first vice president with South Asian lineage. Harris’ mother, Shyamala Gopalan, moved from India to the U.S. in 1958 to attend graduate school. Gopalan, a breast cancer researcher, died in 2009 of colon cancer.

A 2018 study for the American Heart Association found South Asian Americans are more likely to die of coronary heart disease than other Asian Americans and non-Hispanic white Americans. The study pointed to their high incidences of diabetes and prediabetes as risk factors, as well as high waist-to-hip ratios. People of South Asian descent have a higher tendency to gain visceral fat in the abdomen, which is associated with insulin resistance. They also were found to be less physically active than other ethnic groups in the U.S.

One of the nation’s largest undertakings to understand these risks is the Mediators of Atherosclerosis in South Asians Living in America study, which began in 2006. The MASALA researchers, from institutions such as Northwestern University and the University of California-San Francisco, have examined more than 1,100 South Asian American men and women ages 40-79 to better understand the prevalence and outcomes of cardiovascular disease. They stress that high blood pressure and diabetes are common in the community, even for people at normal weights.

That’s why, said Dr. Alka Kanaya, MASALA’s principal investigator and a professor at UCSF, South Asians cannot rely on traditional body mass index metrics, because BMI numbers considered normal could provide false reassurance to those who might still be at risk.

Kanaya recommends cardiac CT scans, which she said help identify high-risk patients, those who need to make more aggressive lifestyle changes and those who may need preventive medication.

Another risk factor, this one cultural, is diet. Some South Asian Americans are vegetarians, though it’s often a grain-heavy diet reliant on rice and flatbread. The AHA study found risks in such diets, which are high in refined carbohydrates and saturated fat.

“We have to understand the cultural nuances [with] an Indian vegetarian diet,” said Dr. Ronesh Sinha, author of “The South Asian Health Solution” and an internal medicine physician. “That means something totally different than … a Westerner who’s going to be consuming a lot of plant-based protein and tofu, eating lots of salads and things that typical South Asians don’t.”

But getting South Asians to change their eating habits can be challenging, because their culture expresses hospitality and love through food, according to Arnab Mukherjea, an associate professor of health sciences at California State University-East Bay. “One of the things South Asians tend to take a lot of pride in is transmitting cultural values and norms knowledge to the next generation,” Mukherjea said.

The intergenerational transmission goes both ways, according to MASALA researchers. Adult, second-generation South Asian Americans might be the key to helping those in the first generation who are resistant to change adopt healthier habits, according to Kanaya.

In the San Francisco Bay Area, El Camino Hospital’s South Asian Heart Center is one of the nation’s leading centers for educating the community. Its three locations are not far from Silicon Valley tech giants, which employ many South Asian Americans.

The center’s medical director, Dr. César Molina, said the center treats many relatively young patients of South Asian descent without typical risk factors for cardiovascular disease.

“It was like the typical 44-year-old engineer with a spouse and two kids showing up with a heart attack,” he said.

The South Asian Health Center helps patients make lifestyle changes through meditation, exercise, diet and sleep. The nearby Palo Alto Medical Foundation’s Prevention and Awareness for South Asians program and the Stanford South Asian Translational Heart Initiative provide medical support for the community. Even patients in the later stages of heart disease can be helped by lifestyle changes, Sinha said.

Dr. Kevin Shah, a University of Utah cardiologist who co-authored the AHA study, said people with diabetes, hypertension and obesity are also at higher risk of COVID-19 complications so should now especially work to improve their cardiovascular health and fitness.

In Colorado, Acharya’s health is still an issue. He said he had to get four more stents this year, and the surgeries have put pressure on his family. But he’s breathing well, watching what he eats — and once more exploring his beloved mountains.

“Nowadays, I feel very, very good,” he said. “I’m hiking a lot.”

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

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Déjà Vu for California Voters on Dialysis

SACRAMENTO, Calif. — The survival of California’s dialysis clinics is in the hands of its voters this November.

Sound familiar?

Voters heard the same dire campaign claim two years ago, when the dialysis industry spent a record $111 million to defeat a statewide ballot measure that would have limited clinic revenues.

Industry giants DaVita and Fresenius Medical Care are back on the defense again this year with their checkbooks open, flooding voters’ mailboxes and screens with political ads highlighted by heartfelt testimonials from patients against Proposition 23. With just a week left before Election Day, the industry is on track to break its own spending record.

This time, the measure’s sponsor, the Service Employees International Union-United Healthcare Workers West, which represents more than 95,000 health care workers in California, focused the ballot measure less on dialysis clinic profits and more on patient safety.

The union, which has tried but failed to organize dialysis clinic workers, has been the driving force behind both ballot measures, putting voters squarely in the middle of a long-running brawl — and forcing them to make decisions that could affect the health of tens of thousands of Californians.

“There’s no reasonable evidence that this would improve patient health,” said Erin Trish, associate director of the University of Southern California’s Leonard D. Schaeffer Center for Health Policy & Economics. “It seems largely to be driven by retaliation by SEIU-United Healthcare Workers West, who are mad the dialysis facilities wouldn’t let their workers unionize.”

Proposition 23 would require dialysis clinics to have a licensed physician on-site during all dialysis treatments, but that doctor wouldn’t need to be a nephrologist, a kidney specialist. Clinics would have to report infection data every three months to the California Department of Public Health, and those that plan to close would need state approval.

About 80,000 patients visit the state’s 600 licensed chronic dialysis clinics, three-quarters of which are owned or operated by DaVita or Fresenius, the largest dialysis companies in the country, according to a report by the nonpartisan state Legislative Analyst’s Office.

Patients with kidney failure often need a dialysis machine to filter toxins and remove excess fluid from their blood when their kidneys can no longer do the job. The treatment is arduous, taking roughly four hours at least three times a week.

Dialysis patients are susceptible to infection for a variety of reasons: Their immune systems are already compromised by their kidney failure, they are around other sick patients while receiving treatment, they require catheters to access their veins, and their blood is cycled through a machine.

Even though mortality rates have dropped among outpatient dialysis patients nationwide, infections remain a leading cause of death. In California, about one-third of outpatient clinics have fallen short of federal performance standards so far this year, resulting in lower Medicare payments to those clinics, according to federal payment records.

“With this initiative, we’ll make sure that they put more of those huge profits back into the clinics to improve safety and improve care,” said Steve Trossman, spokesperson for the union.

Dialysis clinics are once again threatening to close if the measure passes and they’re faced with higher operating costs.

Shama Aslam, 50, spoke at the behest of the union. Aslam, who visits a dialysis clinic in Stockton three times a week, described swatting fruit flies off her face and arms for hours while hooked up to a dialysis machine. She has polycystic kidney disease and has been waiting three years for a kidney transplant.

“It was really bad today,” Aslam said on a recent October afternoon. “It’s very uncomfortable. And because we’re dealing with blood all the time, we don’t want any infection. That’s a huge thing, at least for me.”

Aslam wishes she could see a doctor more than once a month. Nephrologists oversee their patients’ dialysis care, but clinic staff members administer the treatments. Federal regulations require a medical director, who is a board-certified physician, to oversee every dialysis clinic in the country. But there is no requirement that those directors remain physically present at the clinic when it is open. That’s what the California ballot measure would mandate.

Rick Barnett, chief executive officer and president of Satellite Healthcare, which operates 80 dialysis clinics in Texas, Tennessee, New Jersey and California, including Aslam’s clinic, said he had not heard of fruit flies at that Stockton facility. Medicare has not penalized that clinic this year, according to the payment database.

Many nonprofits like San Jose-based Satellite Healthcare could not afford to hire on-site doctors if Proposition 23 passes, Barnett said. Currently, medical directors often oversee multiple clinics in addition to their other job responsibilities.

The Legislative Analyst’s Office estimated it would cost each clinic several hundred thousand dollars a year, while the industry says $600,000 a year. Each clinic likely would have to hire more than one doctor to cover all hours.

Barnett estimates Satellite would close up to 40% of its 67 clinics in California should the ballot measure pass.

“It comes down to an attack on the industry,” he said. “This is one of the few sectors of health care they haven’t organized.”

Trossman vehemently disagreed that the union is trying to punish the dialysis companies over its failed unionization effort, saying the union invests in improving people’s lives.

“In terms of the idea that we would spend millions of dollars because essentially we’re ticked off is just ludicrous,” he said. “We don’t spend money that way.”

The California Medical Association, which represents physicians, opposes the measure, saying it would exacerbate the state’s doctor shortage by diverting physicians into dialysis clinics.

“This will bring physicians who are not trained in kidney disease or dialysis to just be present without any role or purpose, or even a clear path to any intervention because they won’t know what to do,” said Dr. Edgard Vera, a nephrologist and the medical director of DaVita dialysis clinics in Southern California’s High Desert towns of Hesperia and Victorville.

Critical emergencies, such as wild swings in blood pressure, already are handled by technicians and nurses certified in dialysis care, Vera said. Should a patient go into cardiac arrest, “if a physician is there, they are going to call the ambulance anyway,” he said.

DaVita alone had given nearly $67 million to the “No on 23” campaign as of Wednesday, more than half of the $105 million raised so far by the industry, according to campaign finance reports filed with the California secretary of state. The campaign’s other contributors include Fresenius, Satellite Healthcare, U.S. Renal Care and Dialysis Clinic Inc.

The “Yes on 23” campaign has reported just a fraction of that, with nearly $9 million in contributions. SEIU-United Healthcare Workers West gave the bulk of the money, with the rest — about $40,000 — coming from non-monetary donations from the California Democratic Party.

Proposition 23 follows an uneven record of wins and losses for the union on dialysis issues in California. The union tried but failed to organize dialysis workers three years ago, arguing that they needed safer working conditions and job protection. It also lost its 2018 ballot initiative that would have capped dialysis clinic profits.

But, last year, the union helped persuade state lawmakers to adopt a bill that aimed to stop a billing practice dialysis companies use to get higher insurance reimbursements for some low-income patients. A federal judge in January temporarily blocked the law from taking effect while the court considers its constitutionality.

“It’s not unusual for us to be voting on similar issues over and over again if they’re backed by powerful enough interests,” said Danielle Joesten Martin, associate professor of political science at California State University-Sacramento, pointing to other repeat ballot measures on the November ballot, such as the Realtor-backed Proposition 19. That measure would give Californians over 55 years old a property tax break when buying a new home.

They’re “powerful interest groups who didn’t get what they wanted the last time around.”



This KHN story first published on California Healthline, a service of the California Health Care Foundation.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

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Progressive Group Highlights Trump, Tillis Weakness on Insulin Price Tags

 

 

During the first presidential debate of 2020, President Donald Trump touted his efforts to curb skyrocketing drug prices and declared that insulin is now “so cheap, it’s like water.” The response on social media was swift, and divided, with some people sharing pharmacy bills showing thousands of dollars they’d spent on insulin, while others boasted of newfound savings.

The next day, a self-described progressive political action committee called Change Now jumped into the fray by releasing an ad that circulated on Facebook attacking Trump and Sen. Thom Tillis (R-N.C.) on this issue.

In the 30-second ad, a North Carolina woman in her 30s explains she was diagnosed with Type 1 diabetes at age 4.

“Donald Trump and Thom Tillis opposed legislation that would lower the price of insulin and other prescription drugs,” she says. “People with diabetes can’t afford to wait for Trump and Tillis to fight for us. … We need affordable insulin now.”

(Posts sharing the quote were flagged as part of Facebook’s efforts to combat false news and misinformation on its news feed. Read more about PolitiFact’s partnership with Facebook.)

In recent years, politicians on both sides of the aisle have committed to addressing the cost of insulin. This election cycle — coinciding with a looming threat to the Affordable Care Act and millions of people losing jobs and employer-sponsored health insurance during the pandemic — the high price of prescription drugs has gained new significance.

Tillis is in one of the most heated Senate races in the country and has been repeatedly criticized by his opponent for receiving more than $400,000 in campaign contributions from the pharmaceutical and health product industries. Across the country, many voters say lowering prescription drug costs should be the top health priority for elected officials.

So, did Trump and Tillis really oppose policies that would accomplish that goal? We decided to take a closer look.

It turns out they’ve both opposed certain pieces of legislation that could have lowered the price of insulin and other prescription drugs, but they’ve also offered alternatives. The question is how aggressive those alternatives are and how many Americans would benefit from them.

Opposing the Strongest Reforms

Change Now pointed to two congressional bills to support the ad’s claim: one opposed by Trump, and the other by Tillis.

The first bill, known as H.R. 3, passed the House in December 2019, largely due to Democratic votes. It contains three main elements: decreasing out-of-pocket costs for people on Medicare, penalizing pharmaceutical companies that raise the price of drugs faster than the rate of inflation and — the most aggressive and controversial feature — allowing the federal government, which administers Medicare, to negotiate the price of certain drugs, including insulin. It also requires manufacturers to offer those agreed-on prices to private insurers, extending the benefits to a wider swath of Americans.

Stacie Dusetzina, an associate professor of health policy at Vanderbilt University School of Medicine, called it “the broadest-reaching policy that has been put forward” on drug pricing.

“While a lot of reform has focused on Medicare beneficiaries, that misses many insulin users,” Dusetzina said. “H.R. 3 does the most to affect prices for young consumers, like the woman in the ad.”

At the time, Trump vowed to veto that bill, saying the price controls it imposed “would likely undermine access to lifesaving medications” by decreasing the incentive for companies to innovate. When we checked in with the Trump campaign about the ad, a spokesperson reiterated this position, adding that the president continues to seek better legislative options.

The House bill in question, though, never made it to the president’s desk because the Senate didn’t take it up. Instead, the Senate Finance Committee proposed its own bill, which brings us to the second piece of legislation cited by Change Now.

Known as the Prescription Drug Pricing Reduction Act of 2019, the Senate bill echoes two aims of the House proposal: decreasing out-of-pocket costs for people on Medicare and putting an inflation-based cap on some drug prices.

That bill, too, stalled, with several Republican senators wary of the inflation cap. Among them was Tillis, who expressed concern that the measure could hamper innovation.

So, it’s true that Trump and Tillis have both opposed legislation that could lower the cost of insulin and other prescription drugs. But that’s not the full picture of what either politician has done on this issue.

Alternative Solutions for a Smaller Group of Americans

The Trump campaign provided a long list of actions taken by his administration to curb the high costs of medication, including a flurry of executive orders related to insulin and prescription drugs. Tillis’ campaign highlighted an alternative bill the senator co-sponsored to target drug costs. Let’s break them down one at a time.

One of Trump’s orders aims to have Federally Qualified Health Centers provide insulin and EpiPens at a discounted rate to the low-income individuals they serve. These centers, however, are already required to offer sliding-scale payments, and a full discount to patients who earn below the federal poverty line, said Rachel Sachs, an associate professor of law at Washington University in St. Louis, who tracks drug-pricing laws.

Another order deals with the importation of drugs from Canada, where they are often cheaper. Although the order specifically excludes biologic drugs, including insulin, the administration has requested proposals from private companies on how insulin could be safely brought in from other countries.

The president also issued a particularly ambitious order that seeks to tie the price Medicare pays for drugs to a lower international reference price. The Trump administration, however, hasn’t released final regulations to implement that policy, which could take years. If implemented, the policy is expected to be challenged in court by the drug industry.

Perhaps the most notable measure on insulin at the moment, experts said, is a federal demonstration project that Medicare plans can voluntarily opt into, to cap the monthly copay for insulin at $35 for some seniors. The project is slated to begin in January 2021, but its long-term future is uncertain, Sachs said, because it relies on parts of the Affordable Care Act, which could be struck down by a Supreme Court ruling later this year.

In Congress, Tillis and five other Republican senators introduced an alternative drug-pricing bill last December, called the Lower Costs, More Cures Act.

Tillis believes this is “the better option,” campaign spokesperson Andrew Romeo said, because “in addition to helping control drug prices, the legislation also seeks to preserve America’s capacity to research and develop lifesaving medications.” It includes a monthly cap on insulin copays for Medicare beneficiaries and requires manufacturers to disclose prices in consumer ads.

But experts said Tillis’ proposal is weaker than other options before the House and Senate. It doesn’t include an inflation cap, Sachs said, and the bill’s benefit would likely be limited to some seniors on Medicare, leaving out the more than 150 million Americans covered by private insurance.

Jason Roberts, an associate professor of political science at the University of North Carolina-Chapel Hill, said the bill is largely symbolic.

“Tillis is getting hit for not supporting a bill that could move,” Roberts said. “Instead, he introduces something that has no chance of going anywhere, and he knows that. But it’s a way of trying to deflect that criticism without getting a lot accomplished.”

Our Ruling

An ad sponsored by a progressive political action committee claims that Trump and Tillis have opposed legislation that would decrease the cost of insulin and other prescription drugs.

Based on the two pieces of drug-pricing legislation Change Now points to, that’s accurate. Trump and Tillis have voiced opposition to prominent bills that experts say could decrease the cost of insulin for a broad group of Americans.

However, both politicians have also proposed alternative policies to lower the price of insulin and other prescription drugs. Most of their proposals have not taken effect yet and are largely targeted at seniors.

We rate the ad’s claim Mostly True.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

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Fighting for Patient Protections While Attacking ACA — Hard to Have It Both Ways

Throughout the 2020 election cycle, candidates’ positions on health care have been particularly important for voters with underlying and often expensive medical needs — in short, those with preexisting conditions.

It’s no surprise, then, that protections for people who have chronic health problems like diabetes and cancer have become a focal point for candidates nationwide — among them, Matt Rosendale, the Republican contender for Montana’s only U.S. House seat.

On Sept. 22, Rosendale’s campaign hit airwaves and online streaming services with an ad featuring a Whitefish resident named Sandee, whose son was diagnosed with a life-threatening disease. Sandee told the story of how Rosendale came to her family’s aid, concluding that “Matt fights for everyone with a preexisting condition.”

As is often the case with health care policy, however, the truth is far from simple. Rosendale and many other Republican congressional candidates face the challenge of convincing voters they support these safeguards even as they oppose the Affordable Care Act, which codifies those safeguards.

Polls show broad public support for keeping the ACA’s preexisting condition protections.

We decided to investigate.

Rosendale is up against Democrat Kathleen Williams for the congressional seat now occupied by Republican Rep. Greg Gianforte, who has entered the state’s gubernatorial race. The open seat has been controlled by the GOP for the past 12 terms, but this year’s race is expected to be close. Williams, who also ran for the seat in 2018, has made health care her top campaign issue.

We contacted the Rosendale campaign to find out the basis for his ad’s claim. Campaign spokesperson Shelby DeMars listed a range of health policies backed by the candidate that would help people with preexisting conditions directly or indirectly by holding down health care costs. She specifically pointed to Rosendale’s work on the state’s reinsurance program as Montana’s state auditor and insurance commissioner, a post he was elected to in 2016.

“Matt Rosendale is a champion for those with pre-existing conditions and he has the record to prove it,” DeMars said via email. “It is because of the Reinsurance program he implemented that Montanans with pre-existing conditions can access the affordable healthcare coverage they need.”

Examining Reinsurance

In a nutshell, Montana’s reinsurance program is designed to help insurers cover costly medical claims with a mix of federal pass-through dollars and funding generated by a premium tax on all major medical policies in the state. Gov. Steve Bullock announced the formation of a bipartisan group tasked with developing reinsurance program legislation in fall 2018, and the state’s legislature approved the plan in 2019, allowing Rosendale to apply for and receive the necessary waiver under the Affordable Care Act.

Subsequent news accounts indicated the idea worked. In-state insurers credited the program with lowering premiums by 8% to 14% for 2020. As Montana Health Co-op CEO Richard Miltenberger told MTN News shortly after the 2019 legislative session, “It allows the insurance companies to have rate stabilization for those really big claims, the ones that are the earthquakes in health insurance.” He went on to say that this stability “brings the cost down for the consumer.” More to the point, the American Medical Association has also stated that reinsurance not only serves to subsidize high-cost patients but “protects patients with pre-existing conditions.”

But there’s a rub.

The reinsurance program that Rosendale touts wouldn’t exist without a state innovation waiver created by the ACA, which Rosendale says he’ll work to repeal. That effort will doubtless continue to fuel pitched battles in Congress, and how the U.S. Supreme Court may rule on a pending ACA challenge remains a point of speculation. One thing is clear, though: If the entire ACA is thrown out, the reinsurance program goes with it, along with Montana’s Medicaid expansion and the ban on insurers from excluding people with health problems from affordable coverage.

When asked about the resulting elimination of the reinsurance program, DeMars reiterated that Rosendale’s work as auditor has created a system that will ensure protections for preexisting conditions “regardless of what happens to the ACA.” She did not elaborate or explain what protections would remain if the ACA were repealed.

The Short-Term Plan Component

In defending his stance on preexisting conditions, Rosendale continues to be haunted by another health care policy specter from his political past. During his unsuccessful challenge against Democratic U.S. Sen. Jon Tester in 2018, Rosendale faced criticism for promoting short-term, limited-duration health insurance plans. Unlike plans offered on the individual marketplace, these short-term plans are exempt from the ACA’s ban on excluding people with preexisting conditions. And, under a 2018 regulatory change pushed by the Trump administration, the length of these short-term plans has been extended from three months to 12, with the potential to renew for up to three years.

As state auditor, Rosendale included those plans in his March 2020 roundup of year-round options for immediate coverage. They often exclude coverage for a variety of higher-cost benefits. In Montana, for example, a review by KFF found that of four short-term plans available in Billings in 2018, none offered coverage for maternity care, mental health, substance abuse or prescription drug services. (KHN is an editorially independent program of KFF.)

Historically, short-term plans were designed to help individuals fill gaps in health coverage. According to Dania Palanker, an assistant research professor at Georgetown University’s Center on Health Insurance Reforms, the role short-term plans play on today’s health insurance landscape is to attract younger, healthier individuals seeking low-cost options to cover catastrophic events. That splits insurers into two pools — those who are less likely to incur medical expenses, and those who are more likely to incur them. Costs on the individual market go up as a result, leaving people with preexisting conditions no other option than to pay higher premiums. Short-term plans are, Palanker said, “actively hurting people with preexisting conditions.”

“Promoting short-term plans and stumping on supporting protections for preexisting conditions are mutually exclusive,” she continued.

Asked whether the cost-lowering effect of a reinsurance program would be enough to offset the effects of short-term plans, Palanker said the only way such an offset would be enough is if the program encompassed short-term plans. She hasn’t seen that happen anywhere.

Our Ruling

A campaign ad says Rosendale “fights for everyone with a preexisting condition.” While it is true that health insurance premiums have dropped during Rosendale’s tenure as state auditor, the choice to establish Montana’s reinsurance program ultimately fell to decision-makers in the state’s legislature and the governor’s office. Since his ad’s claim simply states that he “fights” for people with preexisting conditions, his testimony in support of that program and role in securing the state waiver do seem to fit the bill.

In the long-term, however, Rosendale’s positions begin to run counter to the claim. His support for short-term, limited-duration plans poses a considerable threat to keeping health insurance affordable for all, and absent a solid plan from Congress to ensure that state reinsurance programs survive, his stated goal of repealing the ACA would actually serve to unravel the very protection he’s built his case on.

We rate this statement as Mostly False.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

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This story can be republished for free (details).