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Proposition 8 – Kidney Dialysis Clinics

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General Election, November 06, 2018

Overview:

Persons with kidney failure may receive dialysis treatment at hospitals or in their own homes, but most receive treatment at chronic dialysis clinics.  According to the Legislative Analyst Office (LAO) as of May 2018 there were 518 licensed clinics in California that provided treatment to approximately 80,000 patients each month.  The LAO estimates that these clinics have total revenues of roughly $3 billion annually from Medicare, Medi-Cal, and group and individual health insurance.

Proposition 8 contains a number of proposals designed to limit the revenue of these clinics via formula.  Specifically, beginning in 2019, would require dialysis clinics to calculate the amount by which their revenues exceed a specified cap.  This revenue “cap” is equal to 115 percent of specified “direct patient care services costs” and “health care quality improvement costs.”  Proposition 8 then requires these clinics to pay rebates to payers (excluding government payers) in the amount that revenues exceed the cap.  These rebates would primarily go to health insurance companies.

Similar legislation sponsored by SEIU California was introduced in 2017, but was not enacted into law.

A YES vote on Proposition 8 means kidney dialysis clinics would have their revenues limited by a formula and could be required to pay rebates to certain parties (primarily health insurance companies) that pay for dialysis treatment.

A NO vote on Proposition 8 means kidney dialysis clinics would not have their revenues limited by formula and would not be required to pay rebates.

Fiscal Impact:

According to the Legislative Analyst Office (LAO), Proposition 8 would have an overall annual effect on state and local governments ranging from net positive impact in the low tens of millions of dollars to net negative impact in the tens of millions of dollars.  The impact of the measure on clinics and on state and local government finances is uncertain because the impact would depend on future actions of (1) state regulators and courts in interpreting the measure, and (2) clinics in response to the measure.

CCC Position:

No position.

Reflections on Church Teaching:

The "principle of subsidiarity" must be respected: "A community of a higher order should not interfere with the life of a community of a lower order, taking over its functions." In case of need it should, rather, support the smaller community and help to coordinate its activity with activities in the rest of society for the sake of the common good. —Pope John Paul II, Centesimus Annus, #48 (1989)

“Profit and capital are not a good over and above the human person; they are at the service of the common good.  When the common good is used only at the service of profit and capital, this has a name: it is called exclusion, and through it the throwaway culture gets stronger and stronger. Throwaway and exclusion.” - Pope Francis, 2017

“Life and physical health are precious gifts entrusted to us by God.  We must take reasonable care of them, taking into account the needs of others and the common good.”  Catechism of the Catholic Church, no. 2288

”Concern for the health of its citizens requires that society help in the attainment of living conditions that allow them to grow and reach maturity, food and clothing, housing, health care, basic education, employment and social assistance.”  Catechism of the Catholic Church, no. 2288.

“We must speak of man’s rights.  Man has the right to live.  He has the right to bodily integrity and to the means necessary for the proper development of life, particularly food, clothing, shelter, medical care, rest, and finally, the necessary social services.”  Saint Pope John XXIII, Pacem in terris, no. 11 (1963).