BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                    AB 2424

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          2424 (Gomez)

          As Amended  May 31, 2016

          Majority vote

          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |Health          |14-2 |Wood, Maienschein,    |Olsen, Patterson    |
          |                |     |Bonilla, Burke,       |                    |
          |                |     |Campos, Chiu,         |                    |
          |                |     |Dababneh, Gomez,      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Roger HernŠndez,      |                    |
          |                |     |Lackey, Nazarian,     |                    |
          |                |     |Rodriguez, Santiago,  |                    |
          |                |     |Waldron               |                    |
          |                |     |                      |                    |
          |Appropriations  |14-6 |Gonzalez, Bloom,      |Bigelow, Chang,     |
          |                |     |Bonilla, Bonta,       |Gallagher, Jones,   |
          |                |     |Calderon, Daly,       |Obernolte, Wagner   |
          |                |     |Eggman, Eduardo       |                    |
          |                |     |Garcia, Roger         |                    |
          |                |     |HernŠndez, Holden,    |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Weber, Wood           |                    |


                                                                    AB 2424

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          |                |     |                      |                    |
          |                |     |                      |                    |

          SUMMARY:  Creates a Community-based Health Improvement and  
          Innovation (CHII) Fund for certain purposes, including funding  
          for health inequity and disparities in the rates and outcomes of  
          priority chronic health conditions.  Specifies funds are  
          available to reduce health inequity; prevent the onset of  
          priority chronic health conditions, as defined; strengthen local  
          and regional collaborations; and evaluate effectiveness and  
          cost-effectiveness of community-based prevention strategies for  
          priority chronic health conditions.  Specifies funds can be used  
          for activities as described.  Specifies policy, systems, and  
          environmental change approaches.  Specifies a target level of  
          annual statewide investment from the fund that must be  
          established as a set dollar amount per capita, and allocates  
          funds to the California Department of Public Health (DPH).   
          Specifies funds shall supplement and not supplant existing  
          funding for community-based prevention activities of priority  
          chronic health conditions, and that participating hospitals and  
          health plan partners must identify monetary or in-kind  
          contributions to local projects.  Creates an advisory committee  
          to offer expert input and guidance to DPH on the development,  
          implementation, and evaluation of the fund.  Requires  
          implementation contingent on a budget appropriation.

          FISCAL EFFECT:  According to the Assembly Appropriations  

          1)DPH would incur one-time costs for staffing, information  
            technology, and contracts, likely in the low millions of  
            dollars.  Ongoing costs would depend on the total allocation  
            and the number of grants and contracts to be managed. 


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          2)This bill does not specify a funding source or amount, but it  
            is safe to assume a program of the scale envisioned would cost  
            in the tens of millions of dollars General Fund (GF) per  
            three-year cycle, in absence of another fund source.  Based on  
            the minimum $250,000 allocated to each local health  
            jurisdiction, which would make up 50% of the funding, as well  
            as the ambitious nature and comprehensiveness of the program,  
            staff estimates cost pressure of $30.5 million GF at a  
            minimum.  Assuming a program of this size, $2.8 million would  
            be allocated to communications and media, $1.5 million to  
            evaluation, up to $1.8 million for DPH administration and  
            oversight, $15.3 to local health jurisdictions to implement  
            community-based health improvement activities, and $9.1  
            million for competitive grants.

          3)A related stakeholder proposal request for a $380 million GF  
            appropriation for a CHII Fund was discussed in the Assembly  
            Budget Subcommittee 1 on April 11, 2016.  This represents  
            nearly a $10 per capita investment, which would support one  
            cycle of a three-year grant program. 

          4)Research indicates funding evidence-based, community-based  
            chronic disease prevention activities can have a high return  
            on investment in terms of health care cost savings.  A return  
            on investment (ROI) analysis is beyond the scope of this  
            estimate, but as this bill focuses on the most costly and  
            preventable conditions, including obesity, heart disease, and  
            diabetes, and assuming the activities were evidence-based and  
            well-implemented, it is reasonable they could lead to  
            improvements in population health and a corresponding a  
            reduction in health care cost growth statewide, and for the  
            state as a large payer.  In addition, the bill's focus on  
            health equity priority populations is likely to have a  
            significant overlap with the Medi-Cal population, increasing  
            the chances of a positive ROI for the state.  Finally, the  
            bill's emphasis on funding systems and policy changes means  
            health-promoting changes adopted pursuant to this program may  


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            have a lasting impact.  For example, the tobacco control  
            program led to changes in public acceptance of tobacco use,  
            which in turn resulted in policies that are unlikely to be  
            reversed, such as tobacco-free workplaces.

          COMMENTS: The author states that with this bill and with proper  
          management, innovative investment strategies, and equitable  
          distribution and implementation plans, the CHII Fund would help  
          the state achieve greater health equity and advance the "Triple  
          Aim" of health improvement:  1) better care; 2) better health;  
          and, 3) lower costs.  According to the author, a $10 per capita  
          investment over three years (for prevention of disease which  
          accounts for 80% of health care costs) is actually fairly modest  
          for a statewide program with these goals.  For comparison,  
          Massachusetts has invested a $60 million one-time in a similar  
          fund, which is similar in scale based on their population.  The  
          state spends over $450 per capita from the General Fund just on  
          Medi-Cal every year - and much more when accounting for  
          California Public Employees' Retirement System employees and  
          retirees, as well as correctional health.  According to the  
          author, DPH received a grant from the Centers for Disease  
          Control and Prevention (CDC) for $3.8 million to promote healthy  
          behaviors and reduce diabetes.  

          As part of the Patient Protection and Affordable Care Act of  
          2010, the Prevention and Public Health Investment Fund  
          (Prevention Fund) was created to provide communities around the  
          country with more than $15 billion over the next 10 years to  
          invest in effective, proven prevention efforts, like childhood  
          obesity and tobacco cessation.  The Prevention Fund, in recent  
          years, has suffered legislative reduction and elimination of  
          major programs.  

          In 2012, the Assembly and Senate Committees on Health conducted  
          a joint hearing with the goal of highlighting the health  
          benefits and cost savings associated with investing in  


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          community-wide health promotion and disease prevention.  The  
          hearing also highlighted prevention activities currently  
          underway at the time across the state to implement successful  
          strategies aimed at reducing health care costs and promoting  
          health and wellness.  

          In 2014, the Assembly Committee on Health held an Information  
          Hearing, entitled Supporting Public Health in California:  The  
          Critical Role of the State and Local Departments in Disease  
          Surveillance and Control.  The background included some  
          information of the following:

          1)Department of Public Health.  The mission of DPH is to  
            optimize the health and well-being of Californians, primarily  
            through population-based programs, strategies, and  
            initiatives.  DPH is broadly organized into the Center for  
            Chronic Disease Prevention and Health Promotion, the Center  
            for Environmental Health, the Center for Family Health, the  
            Center for Health Care Quality, and the Center for Infectious  
            Diseases.  California created the Health in All Policies Task  
            Force in 2010.  The Task Force was charged with identifying  
            priority programs, policies, and strategies to improve the  
            health of Californians.  

          2)Local Health Departments.  There are 61 local health  
            jurisdictions in California representing the 58 counties and  
            three cities:  Berkeley, Long Beach, and Pasadena.  Public  
            health officers have broad far-reaching authority and  
            responsibility under the law.  For example, public health  
            officers have the authority to order testing for individuals  
            or communities, quarantine individuals or groups, and close  
            beaches, restaurants, and other facilities for public safety.  
            Public health officers receive reports from health providers  
            and laboratories concerning the incidence of more than 80  
            statutorily reportable diseases including HIV/AIDs,  
            tuberculosis, and syphilis.  County health departments must  


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            submit monthly, quarterly, or annual public health and program  
            reports to state agencies including DPH and the Emergency  
            Medical Services Authority.  County public health programs  
            vary substantially in their administrative structures, scope,  
            funding levels, staffing, and specific services and programs  

          3)Public Health Spending in California.  The Governor's fiscal  
            year (FY) 2014-15 Budget provides $3 billion for the support  
            of DPH programs and services, a decrease of 11.4% from the  
            previous year.  Of the amount approved, 23% ($683.3 million)  
            is for state operations and 77% ($2.3 billion) is for local  

          4)Health Equity.  According to the CDC, health equity is  
            achieved when every person has the opportunity to "attain his  
            or her full health potential" and no one is "disadvantaged  
            from achieving this potential because of social position or  
            other socially determined circumstances."  Health inequities  
            are reflected in differences in length of life; quality of  
            life; rates of disease, disability, and death; severity of  
            disease; and, access to treatment.  Established in 2012, DPH's  
            Office of Health Equity (OHE) aims to reduce health and mental  
            health disparities in vulnerable communities.  The OHE is  
            required to consult with community-based organizations and  
            local governmental agencies to ensure that community  
            perspectives and input are included in policies, strategic  
            plans, recommendations, and implementation activities

          5)Targeted federally funded programs.  The largest prevention  
            program DPH administers is the Nutrition Education and Obesity  
            Prevention program, which provides health education  
            interventions to recipients of Supplemental Nutrition  
            Assistance Program benefits.  In federal FY 2014, the CDC  
            provided about $303 million to entities in California,  
            including health departments, universities, and other public  


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            and private agencies.  Of this total, about $62 million of  
            this funding statewide was allocated to different entities for  
            chronic disease and prevention activities.

          Analysis Prepared by:                                             
                          Kristene Mapile/ HEALTH / (916) 319-2097  FN: