Unions push for change in the dialysis industry

Issue: July 2018

ByMark E. Neumann

Labor unions were created in the late 1880s to protect the working population from unsafe conditions.

Today, their main focus is on increasing wages and maintaining good benefits for workers in the United States.

The dialysis industry has been fairly immune to unions disrupting dialysis clinic operations. Hundreds of workers at seven Fresenius Medical Care dialysis clinics in New York took part in a 1-day strike in June 2017 over stalled negotiations for a union contract and that nurses were being locked out of participation in decisions about safety measures and staffing levels. The issue was resolved 2 months later with a new contract and nursing involvement in decisions about clinic operations.

However, one of the unions that helped coordinate that strike – 1199 Service Employees International Union (SEIU) United Healthcare Workers East – has an affiliated organization in the West, that represents hospital workers in California. That union, interested in organizing dialysis nurses, pushed legislation last year that would set staff-to-patient ratios for dialysis nurses, patient care technicians and social workers. Modeled after ratios already established in Texas and other states, the California plan included yearly inspections by the Department of Public Health and a minimum 45-minute transition period between patients coming off dialysis and new patients starting treatment.

The dialysis industry protested, saying the ratios were not needed and quality of dialysis care in California was equal to or better than that of other states. Providers would struggle to find and hire staff – particularly nurses – to meet the new ratios.

That bill has been tabled for now, but could return to the floor of the legislature at a later date, particularly since it was part of efforts by the SEIU to organize dialysis workers. However, the union is not resting.

Controlling dialysis company profits

The SEIU moved from staffing issues to dialysis clinic revenue and has proposed to limit the profit margins of dialysis providers in California to no more than 15% over the direct costs of providing dialysis care. The union originally endorsed the idea when it was California State Assembly Bill 251, called the Fair Pricing for Dialysis Act. In August of last year, SEIU took the legislative language and turned it into a ballot initiative. After gathering the necessary signatures, the California Attorney General approved placement of the initiative on the Nov. 8 ballot.

If approved by the voters, the measure would require that dialysis clinics would have to rebate any profit amount above the 15% to commercial health care plans who have members undergoing treatment. Medicare and MediCal would not receive any rebates.

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Supporters state the ballot initiative is primarily aimed at DaVita Kidney Care and Fresenius Kidney Care, which own and operate 72% of the clinics in the state. It has been opposed by close to 100 organizations, including the California Medical Association and medical professionals who work in hospital emergency rooms. That group says patients will seek treatment there if providers shut down clinics because of reduced profits.

The SEIU is moving ahead with the ballot initiative and is now gathering support in Ohio (July 1 deadline for collecting enough voter signatures) and Arizona for similar ballot initiatives. Although the proposal is detailed in defining how the excess 15% is tabulated, the mechanism to collect the dialysis company data on dialysis treatment costs and impose fines if needed is not so clear.

Who is next?

When supporting staff-patient ratios, it was clear SEIU was trying to push its message about the benefits of organizing to dialysis clinic staff. Although staff costs are exempt from the 15%-plus profit limit, it is unclear how limiting the employer’s bottom line benefits the union or the dialysis clinic worker.

Dialysis companies have historically overcharged commercial health plans for patient care. The care is no different that what Medicare or Medicaid patients receive. However, providers say they need to do it to help their clinics – particularly those in rural areas operating on thin margins – compensate for inadequate government premiums. While we have seen lawsuits against providers who upcharge commercial health plans with higher fees before, letting the public decide which side is right or wrong may not be the best approach for setting policy. Let’s hope a compromise can be reached before this gets to the ballot box.

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Mark E. Neumann is Editor-in-Chief of Nephrology News & Issues.