BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 589
                                                                  Page  1


          ASSEMBLY THIRD READING
          AB 589 (Perea)
          As Amended  May 27, 2011
          Majority vote 

           BUSINESS & PROFESSIONS        6-3                   
          APPROPRIATIONS      12-5        
           
           ----------------------------------------------------------------- 
          |Ayes:|Hayashi, Allen, Butler,   |Ayes:|Fuentes, Blumenfield,     |
          |     |Eng, Hill, Ma             |     |Bradford, Charles         |
          |     |                          |     |Calderon, Campos, Davis,  |
          |     |                          |     |Gatto, Hall, Hill, Lara,  |
          |     |                          |     |Mitchell, Solorio         |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Bill Berryhill, Hagman,   |Nays:|Harkey, Donnelly,         |
          |     |Smyth                     |     |Nielsen, Norby, Wagner    |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Establishes the Steven M. Thompson Medical School 
          Scholarship Program (Program) to promote the education of 
          medical doctors and doctors of osteopathy, as specified.  
          Specifically,  this bill  :  

          1)Establishes the Program within the Health Professions 
            Education Foundation (Foundation).

          2)States intent that the Foundation and the Office of Statewide 
            Health Planning and Development (Office) provide the ongoing 
            program management for the Program.  

          3)Specifies that the Program be used only for the purpose of 
            promoting the education of medical doctors and doctors of 
            osteopathy and related administrative costs.

          4)Requires Program participants to commit prior to entering an 
            accredited medical or osteopathic school in writing to three 
            years of full-time professional practice once the participant 
            has achieved full licensure, and after completing an 
            accredited residency program, in direct patient care, in an 
            eligible practice setting, as specified.

          5)Provides that the maximum allowable amount per total 








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            scholarship is $105,000, distributed over the course of a 
            standard medical school curriculum, increasing to ensure that 
            at least 45% of the total scholarship award is distributed 
            upon matriculation in the final year of school.

          6)Authorizes the Office to recover the funds awarded plus the 
            maximum allowable interest in the event the Program 
            participant does not complete the minimum three years of 
            professional service pursuant to his or her contractual 
            agreement with the Foundation.

          7)Establishes certain criteria for selecting scholarship 
            recipients, as specified.

          8)Establishes the Steven M. Thompson Medical School Scholarship 
            Account (Scholarship Account) within the Health Professions 
            Education Fund (Education Fund), for the purpose of receiving 
            federal or private funds.

          9)Provides that funds in the Scholarship Account be used to fund 
            scholarships pursuant to agreements made with recipients and 
            as follows:

             a)   Scholarships shall not exceed $105,000 per recipient; 
               and,

             b)   Scholarships shall not exceed the amount of the 
               educational expenses incurred by the recipient.

          10)Provides that funds placed in the Scholarship Account be used 
            for the implementation of this bill upon appropriation by the 
            Legislature.

          11)Specifies that the Scholarship Account be used to pay for the 
            cost of administering the Program, not exceeding 5% of the 
            total appropriation for the Program.

          12)Requires the Office and Foundation to manage the Scholarship 
            Account established by this bill, prudently in accordance with 
            other provisions of law.

          13)Provides that this bill be implemented only to the extent 
            that the Scholarship Account contains sufficient funds as 
            determined by the Foundation.








                                                                  AB 589
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           EXISTING LAW  :  

           1)Establishes the Medically Underserved Account for Physicians 
            within the Education Fund, managed by the Foundation and the 
            Office, with the primary purpose of funding the Steven M. 
            Thompson Physician Corps Loan Repayment Program (Loan 
            Repayment Program).

          2)Provides up to $105,000 for the repayment of prescribed 
            educational loans obtained by a physician and surgeon who 
            practices in a medically underserved area (MUA) of the state, 
            under the Loan Repayment Program.

          FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee, negligible direct state impact.
           
          COMMENTS  :  According to the author, "This bill seeks to address 
          shortages of physician services, particularly primary care 
          physician services, that exist in over 200 distinct regions of 
          California identified as MUAs.  This bill also aims to make 
          medical school more financially accessible for those students 
          willing to pursue careers in primary care and practice medicine 
          in MUAs.  This bill is necessary to address the growing 
          geographical disparity of physician supply in California, as 
          well as the rapidly increasing cost of a medical education, 
          which is increasingly a barrier to entry for students from 
          economically disadvantaged backgrounds."

          California's population is growing rapidly and aging, increasing 
          a greater demand for physicians than ever before.  It is also 
          becoming more culturally and ethnically diverse, and many areas 
          that have traditionally been medically underserved are expected 
          to see the greatest population growth.  At the same time, many 
          of California's physicians are approaching retirement 
          themselves, and the pipeline designed to replace them is 
          experiencing key bottlenecks in both medical school and 
          residency training. Medical school debt is also growing faster 
          than physician income, and is one of the primary reasons the 
          supply of primary care physicians is lagging even further behind 
          that of specialists.

          The Foundation offers the Loan Repayment Program to encourage 
          physicians to practice in MUAs of California by authorizing a 








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          plan for repayment of their educational loans.  Physicians may 
          receive up to $105,000 in exchange for their service in a 
          designated MUA area for a minimum of three years.  Loan 
          repayment recipients are required to sign a written contract 
          with the Foundation outlining the provisions which must be met 
          in order to fulfill the obligations under this program.  Failure 
          to comply with the terms of the contract may result in the 
          awardee's repayment of funds plus interest.

          The Loan Repayment Program is funded by voluntary contributions 
          made as part of physician licensure fees and other voluntary 
          sources.  The Program established under this bill would 
          similarly be funded by voluntary federal or private sources.

           
          Analysis Prepared by  :    Rebecca May / B.,P. & C.P. / (916) 
          319-3301 


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