California Ballot Initiative Analysis: Proposition 23 (2020)
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Voters' Guide

California Ballot Initiative Analysis: Proposition 23 (2020)

California's Proposition 23 would set new regulations for outpatient kidney dialysis clinics.

California Proposition 23: Dialysis Clinic Requirements Initiative


California’s Proposition 23 would require at least one licensed physician on-site during treatment at outpatient kidney dialysis clinics and authorizes the Department of Public Health to exempt clinics from this requirement if there is a shortage of qualified licensed physicians as long as at least one nurse practitioner or physician assistant is on site. It would also require clinics to report dialysis-related infection data to state and federal governments, requires state approval for clinics to close or reduce services and prohibit clinics from discriminating against patients based on their source of payment for care.

Fiscal Impact

The proposal is expected to increase government expenditures in the low tens of millions annually. Increased regulation would increase dialysis clinic costs, some of which would be passed on state and local governments through higher Medi-Cal reimbursement rates and increased medical insurance costs for public sector employees and retirees.

Proponents’ Argument For

Proponents argue that quality of care at dialysis centers is declining even as costs to patients are rising. They argue that these centers are making massive profits and many dialysis clinics in California have been cited for failure to maintain proper standards of care. Failure to maintain proper standards can lead to patient harm, hospitalizations, and even death. Proponents point to rapid growth in 911 emergency calls from dialysis clinics in recent years driven by a lack of adequate staffing on-site to handle medical emergencies. Patients should have access to a physician on-site whenever dialysis treatment is being provided. Proper reporting and transparency of infection rates encourage clinics to improve quality and helps patients make the best choice for their care. Meanwhile, just two companies own and operate 72 percent of the dialysis clinics in the state, and they reported $4 billion in profits in 2017.

Opponents’ Argument Against

Opponents argue that Proposition 23 would require “moving thousands of practicing doctors into non-caregiving roles in dialysis clinics,” which would intensify California’s doctor shortage. Even if doing so did improve safety and health outcomes at dialysis clinics, it would mean thousands of other patients would have to wait longer for medical care, and negative health outcomes will entail.

At the same time, Prop 23 would increase dialysis treatment costs by $320 million every year. Almost half of the dialysis clinics in California don’t make enough money to cover these higher costs and many would likely close, seriously threatening dialysis patients’ access to care.


California’s Proposition 23 is the second effort by the Service Employee International Union to introduce state regulation of dialysis clinics through the ballot box. In 2018, SEIU funded the campaign for Proposition 8, which would have put a ceiling on profits at dialysis facilities. The measure was opposed by the major dialysis industry and was defeated by a 60-40 margin.

SEIU’s new measure, Proposition 23, is more incremental and appears to be less controversial as better reporting of infection rates and assuring patient access to a highly-skilled provider seem like common-sense measures. However, infection data is already collected at the federal level by the Centers for Disease Control and Prevention’s (CDC’s) National Healthcare Safety Network (NHSN), so state collection would be redundant. If federal data is insufficiently timely or complete, health advocates’ purposes would seem better served by working with the CDC to improve the data rather than imposing a second collection system in just one state.

Due to a shortage of primary care physicians and nephrologists, i.e. kidney specialists, the requirement that a physician be present at each facility may not be achievable. Many clinics would likely request exemptions from the physician presence requirement—which is provided for in the initiative. It’s even worse when you consider that the doctors required to be at dialysis clinics would spend virtually all of their time doing nothing—being on standby for a rare emergency requiring them—rather than being at a clinic or hospital spending a full shift helping sick people.

Proponents point to rising 911 calls from dialysis clinics, but that is an efficient way to deal with emergencies, not having a doctor on standby. Another approach to having enough doctors available for dialysis clinics if they are needed is to increase the supply of physicians by raising the number of places at medical schools and allowing out-of-state and foreign doctors to use their credentials in California.

Finally, the dangers of dialysis can be minimized by reducing the number of patients who require dialysis. The government could stop prohibit cash compensation for live kidney donors, which would allow more transplants and less need for dialysis services. Currently, there are about 19,000 California candidates on the kidney organ transplant waiting list. Kidney donors must take time off work, suffer discomfort, and accept the increased health risks that come with having only one kidney. If donors were  properly compensated for their considerable sacrifice, more people would likely be willing to donate.

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