A couple observations about Tuesday’s elections

November 8, 2018
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Checking the box

Healthcare was on the minds of mid-term voters this week. Candidates emphasized healthcare in their campaigns and voters in at least six states had an opportunity to weigh in on healthcare via ballot questions.

One observation is that voters are being asked to decide some fairly technical questions, including whether dialysis center profits should be capped in California, whether hospitals should have to maintain specific nurse staffing ratios in Massachusetts, and whether Medicaid eligibility should be expanded or current expansions extended in Idaho, Utah, Nebraska and Montana.

The California dialysis measure was the most fascinating. It was essentially a proxy war by the SEIU, which wants to unionize dialysis centers, against the big gorillas in the dialysis industry: Davita and Fresenius. To get a sense of the stakes, the companies ponied up more than $100 million to fight the measure and were very successful. Davita’s market cap rose by $1.2B the day after the election, if that tells you anything. Both the pro and anti groups had the word “Patients” in their name, which is typically a good hint that patients were incidental to this effort.

In Massachusetts, the nurse’s union was behind the ballot question, while hospitals opposed it. Initially the polling looked good for the measure –after all who doesn’t want adequate nursing– but hospitals managed to throw enough doubt and confusion into the measure to set public opinion against it.

In both cases, the ballot questions may set the stage for future state-level legislation.

Medicaid expansion results were interesting. The questions passed in the conservative states of Idaho, Nebraska and Utah, but failed in Montana. Interestingly, the Utah measure included a 0.15% increase in the sales tax, enough to offset the incremental cost to the state.

The Montana situation was different for two reasons. First, it was a proposal to continue the expansion that was approved by the legislature in 2015 with a sunset provision. Second, it included a big tobacco tax, amounting to about $2 per pack of cigarettes. That apparently was too much for voters to handle.

Idaho, Nebraska and Utah join Maine as the only states to institute Medicaid expansion via ballot initiative. Implementation of Maine voters’ will was stymied by Republican Governor LePage. Now that he’s being replaced by a Democrat, Maine can be expected to implement the expansion along with the others.

By healthcare business consultant David E. Williams, president of Health Business Group.

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