BILL ANALYSIS                                                                                                                                                                                                    

                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    AB 2424             
          |AUTHOR:        |Gomez                                          |
          |VERSION:       |June 20, 2016                                  |
          |HEARING DATE:  |June 29, 2016  |               |               |
          |CONSULTANT:    |Reyes Diaz                                     |
           SUBJECT  :  Community-based Health Improvement and Innovation Fund

           SUMMARY  : Creates the Community-based Health Improvement and Innovation  
          Fund for allocation to the Department of Public Health to reduce  
          health inequity and disparities in the rates and outcomes of  
          priority chronic health conditions, as defined, and to evaluate  
          the effectiveness of community-based prevention strategies, as  

          Existing law:
          1)Establishes the Department of Public Health (DPH) to protect  
            and improve the health of communities through education,  
            promotion of healthy lifestyles, and research for disease and  
            injury prevention. Establishes the California Diabetes Program  
            (CDP) within DPH.

          2)Provides DPH with the authority to perform activities that  
            protect, preserve, and advance public health, including  
            studies and dissemination of information.
          This bill:
          1)Creates in the State Treasury the Community-based Health  
            Improvement and Innovation Fund (CHII Fund) consisting of any  
            revenues deposited, including, but not limited to, fine or  
            penalty revenue, any revenue from appropriation credited to  
            the CHII Fund, and any funds from public or private gifts,  
            grants, or donations.

          2)Required moneys from the CHII Fund to be available, as  
            specified, for purposes that include, but are not limited to:

                  a)        Reducing health inequity and disparities in  
                    the rates and outcomes of "priority chronic health  


          AB 2424 (Gomez)                                    Page 2 of ?
                    conditions," as defined, and injuries. Defines  
                    "priority chronic health conditions" as asthma, type  
                    II diabetes, cardiovascular and cerebrovascular  
                    disease, cancer, dental disease, obesity, and other  
                    chronic conditions and injuries, as specified;
                  b)        Preventing the onset of priority chronic  
                    health conditions using community-based strategies, as  
                  c)        Strengthening local, regional, and state-level  
                    collaborations between public health jurisdictions and  
                    health care providers, and across government agencies  
                    and community partners, as specified;
                  d)        Supporting collaboration between public health  
                    entities and non-health organizations and agencies in  
                    fields to include housing, transportation, land use  
                    planning, and food access; and,
                  e)        Evaluating the effectiveness and  
                    cost-effectiveness of innovative community-based  
                    prevention strategies for priority chronic health  
                    conditions, as specified.

          3)Requires CHII Fund moneys to be used to address social,  
            environmental, and behavioral determinants of chronic disease  
            and injury, as specified, including, but not limited to  
            promotion of health diets, improved access to healthy foods,  
            and health food environments; promotion of physical activity  
            and of a safe, physical activity-promoting environment;  
            prevention of unintentional and intentional injury; and  
            building partnerships to address social determinants of  
            chronic disease. Requires policy, systems, and environmental  
            change approaches to be emphasized when expending CHII Fund  
            moneys, and allows moneys to support implementation of  
            community-based programs. Prohibits CHII Fund moneys from  
            being used for clinical services and from reverting to the  
            State General Fund.

          4)Requires DPH to be allocated an amount not greater than 20% of  
            the annual appropriation from the CHII Fund for activities  
            that include, but are not limited to:

                  a)        Mandatory activities that include: statewide  
                    media and communications campaigns; evaluation of all  
                    program activities supported through the CHII Fund,  
                    including regular monitoring, data collection and  
                    reporting requirements, and ensuring moneys supplement  


          AB 2424 (Gomez)                                    Page 3 of ?
                    and do not supplant existing funds or efforts; and  
                    other activities, including overall program  
                    implementation and oversight, the definition of  
                    criteria for evidence-based and innovative approaches  
                    to improving health and health equity, the definition  
                    of priority chronic health conditions and health  
                    equity priority populations, and development of tools  
                    that can be used by the state and grantees to monitor  
                    progress, as specified; and, 
                  b)        Discretionary activities to support  
                    community-based prevention that include: research,  
                    development, and dissemination of best practices;  
                    development of infrastructure, as specified;  
                    coordination of local efforts and statewide  
                    initiatives; and grants or contracts to nonprofit  
                    organizations at the state level, as specified.

          5)Requires DPH to award at least 80% of moneys from the CHII  
            Fund to eligible applicants to be used consistent with  
            requirements in 2) above, and distributed and awarded  
            according to criteria that includes, but is not limited to:

                  a)        At least 47% of funds awarded to local health  
                    jurisdictions, as specified, that submit an  
                    application for a three-year funding cycle that  
                    includes, but is not limited to: a detailed assessment  
                    of community health needs, as specified; a health  
                    improvement and evaluation plan; the level of local  
                    funds; documentation of the existence and activities  
                    of a community health partnership, as specified; and  
                    how funds will be used in a manner consistent with  
                    provisions in this bill; and, 
                  b)        At least 33% of funds allocated for  
                    competitive grants, including, but not limited to:  
                    grants awarded to local or regional-level entities or  
                    statewide nonprofit organizations; the identification  
                    by participating health care plans or hospitals of  
                    monetary, in-kind, or both, contributions to projects;  
                    investments by local or regional projects that serve  
                    communities, as specified; funds used for statewide  
                    nonprofit organizations to support activities; funds  
                    used for competitive grant programs administered by  
                    DPH to support health food incentives for low-income  
                    Californians and community food projects, as  
                    specified; and coordinated efforts of grant awardees  


          AB 2424 (Gomez)                                    Page 4 of ?
                    with DPH and any local health jurisdiction, as  

          6)Creates the CHII Fund Advisory Committee (Committee) that is  
            required to advise DPH on policy development, integration, and  
            evaluation of community-based chronic disease and injury  
            prevention activities, as specified. Requires the Committee to  
            include, at a minimum, experts on priority chronic health  
            conditions, effective nonclinical prevention strategies, and  
            policy strategies for prevention. Requires the Committee to be  
            composed of 13 members appointed for a term of two years,  
            renewable at the option of the appointing authority as  

                  a)        One member representing voluntary health  
                    organizations, as specified, appointed by the Speaker  
                    of the Assembly;
                  b)        One member representing health care employees  
                    appointed by the Senate Rules Committee;
                  c)        One member representing a statewide nonprofit  
                    health organization, as specified, appointed by the  
                  d)        One member representing a community-based  
                    organization, as specified, appointed by the Governor;
                  e)        One representative of a university, as  
                    specified, appointed by the Governor;
                  f)        Two representatives of a population group with  
                    priority health conditions appointed by the Governor;
                  g)        One representative of the Health and Human  
                    Services Agency appointed by the Governor;
                  h)        One representative of the Department of Food  
                    and Agriculture appointed by the Governor;
                  i)        One representative of the Health in All  
                    Policies Task Force appointed by the Strategic Growth  
                  j)        One member representing the interests of the  
                    general public appointed by the Governor;
                  aa)       One representative of the California  
                    Conference of Local Health Officers; and,
                  bb)       One representative from the California Health  
                    Benefit Exchange appointed by the executive board of  
                    the exchange.

          7)Requires the Committee to meet as deemed necessary but not  
            less than four times per year. Requires the Committee members  


          AB 2424 (Gomez)                                    Page 5 of ?
            to serve without compensation, except as specified, and to be  
            advisory to DPH, the Department of Food and Agriculture (DFA),  
            and the Health and Human Services Agency (HHSA) for purposes  
            that include, but are not limited to:

                  a)        Evaluation of research on community-based  
                    policies, practices, and programs, as specified;
                  b)        Facilitation of programs directed at reducing  
                    and eliminating preventable chronic disease and  
                    injury, as specified;
                  c)        Making recommendations to DPH, DFA, and HHSA,  
                    as specified;
                  d)        Reporting to the Legislature on or before  
                    January 1 of each year on the number and amount of  
                    activities funded by the CHII Fund, as specified; and,
                  e)        Ensuring that the most current research  
                    findings are applied in designing CHII Fund  
                    activities, as specified.

          8)Requires the Committee, based on results of programs funded by  
            the CHII Fund and other proven methodologies, to produce a  
            comprehensive set of recommendations and proposed strategies  
            for advancing chronic disease and injury prevention throughout  
            the state that include specific goals for reduction of the  
            burden of preventable chronic conditions and injuries by 2030.  
            Requires the recommendations to include implementation  
            strategies for each priority chronic health condition  
            throughout the state and identification of areas where  
            innovative solutions are especially needed. Requires the  
            Committee to submit the recommendations and proposed  
            strategies to the Legislature triennially.

           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. 

          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  


          AB 2424 (Gomez)                                    Page 6 of ?
            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  
            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  
            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.

          VOTES  :  
          |Assembly Floor:                     |57 - 22                     |
          |Assembly Appropriations Committee:  |14 - 6                      |


          AB 2424 (Gomez)                                    Page 7 of ?
          |Assembly Health Committee:          |14 - 2                      |
          |                                    |                            |
          COMMENTS  :
          1)Author's statement. According to the author, this bill would  
            create the CHII Fund to ensure that all Californians are able  
            to achieve optimal, equitable health regardless of their  
            socioeconomic status, race, ethnicity, or place of residence.  
            Specifically, money allocated from the CHII Fund would support  
            sustainable funding toward public health and prevention  
            programs and efforts within disadvantaged communities. The  
            sources of funding for public health and prevention programs  
            are perpetually threatened. These funds are currently  
            declining from past levels of prior funding, and are often  
            subject to significant federal restrictions. Strategic  
            investment in upstream and primary prevention would protect,  
            not deplete, our crucial health programs. Investment in  
            prevention has a strong evidence base of positive returns on  
            investment by reducing health care costs on a long-term basis.  
            Soaring health care costs for government, business, and labor  
            takes money out of wages and hurts competitiveness. Eighty  
            percent of our health spending is on chronic disease, most of  
            which is preventable. Other innovations may improve care, but  
            innovation increases costs. Preventing obesity and chronic  
            disease is the only way to save money in the long-term.

          2)Diabetes in California. DPH issued a study, The Burden of  
            Chronic Disease and Injury, in 2013 that highlights some of  
            the leading causes of death, such as heart disease, cancer,  
            stroke, and respiratory disease, all of which have a strong  
            connection to obesity. Diabetes is another serious chronic  
            disease stemming from obesity that adversely affects quality  
            of life and results in serious medical costs. The last decade  
            has witnessed a 32% rise in diabetes prevalence, affecting  
            some 3.9 million people and costing upwards of $24 billion per  
            year. According to the Centers for Disease Control and  
            Prevention (CDC), more than one-third of U.S. adults are  
            obese, and approximately 12.5 million children and adolescents  
            ages two to 19 years are obese. Research indicates a tripling  
            in the youth obesity rate over the past three decades. While  
            this increase has stabilized between the years 2005 and 2010,  
            in 2010, 38% of public school children were overweight and  
            obese. Overweight youth face increased risks for many serious  
            detrimental health conditions that do not commonly occur  


          AB 2424 (Gomez)                                    Page 8 of ?
            during childhood, including high cholesterol and type-2  
            diabetes. Additionally, more than 80% of obese adolescents  
            remain obese as adults.

          3)CDP. The CDP was established in 1981 and represents a  
            partnership between DPH and the University of California, San  
            Francisco. It primarily receives its funding from the CDC. A  
            few key objectives that the CDP focuses on include:

               a)     Monitoring statewide diabetes health status and risk  
               b)     Engaging in outreach to increase awareness about the  
               c)     Guiding public policy to support at-risk and  
                 vulnerable populations;
               d)     Offering leadership, guidance, and resources to  
                 community health interventions;
               e)     Seeking to improve the health care delivery system;  
               f)     Reducing diabetes-related health disparities.

            The CDP achieves these through partnering with different  
            individual, community, health care, policy, and environmental  

          1)The California Wellness Plan (Plan). In February 2014, DPH's  
            Chronic Disease Prevention Branch published the Plan, the  
            result of a statewide process led by DPH to develop a roadmap  
            for DPH and partners to promote health and eliminate  
            preventable chronic disease in California. The Plan aligns  
            with the Let's Get Healthy California Taskforce priorities and  
            includes 26 priorities and performance measures developed in  
            2012 that are based upon evidence-based strategies to prevent  
            chronic disease and promote equity. The Plan contains short,  
            intermediate, and long-term objectives with measurable effects  
            on a variety of chronic diseases, of which diabetes is a major  
            focus. The Plan also contains 15 objectives specific to  
            diabetes, including objectives to increase utilization of  
            diabetes prevention and self-management programs, as well as  
            broad objectives to reduce the prevalence of obesity and  
            diabetes among children and adults. DPH's chronic disease  
            programs plan to collaborate with local and state partners,  
            including the Office of Health Equity (OHE), that are engaged  
            in diabetes prevention to implement the objectives. DPH  
            intends to monitor the progress of Plan objectives and publish  


          AB 2424 (Gomez)                                    Page 9 of ?
            regular reports on outcomes.

            According to DPH, the Chronic Disease Control Branch Chief  
            ensures that, at a minimum, the Plan is reviewed in  
            conjunction with partners every five years to assess the need  
            for a new version. This review process will be consistent with  
            the CDC and Evaluation Program guidelines. Triggers for  
            reviewing the Plan sooner than the five year cycle include,  
            but are not limited to:  a) major changes to DPH authority; or  
            b) major changes in federal and/or state funding, guidance, or  
            requirements. Any future versions of the Plan developed in  
            conjunction with partners will also be available to the public  
            on DPH's Web site. DPH further states that a one-day statewide  
            conference is planned for 2017 for partners and programs to  
            report on progress or short term outcomes of goals of the  
            Plan. A summary of conference reports will be posted online  
            after the conference.

          2)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 OHE aims  
            to reduce health and mental health disparities in vulnerable  
            communities. OHE's work is directed through their advisory  
            committee and stakeholder meeting process. 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. According to  
            the U.S. Department of Health and Human Services' report,  
            "Healthy People 2020: An Opportunity to Address the Societal  
            Determinants of Health in the United States," Americans do not  
            all have equal opportunities to make healthy choices. A  
            person's health and chances of becoming sick and dying early  
            are greatly influenced by powerful social factors including  
            education, income, nutrition, housing, and neighborhoods. The  
            "Healthy People 2020" report indicates that if we, as a state,  
            develop strategies and programs to help more Californians  
            become physically active and adopt good nutrition practices,  
            and create social and physical environments that promote good  
            health for all, California could substantially improve health  


          AB 2424 (Gomez)                                    Page 10 of ?
            and reduce health care costs.

          3)Related legislation. AB 2696 (Beth Gaines), would require DPH  
            to submit a report to the Legislature, as specified with  
            certain criteria, regarding the prevention and management of  
            diabetes and its complications. Requires DPH to post annually  
            specified information on its Internet Web site. AB 2696 is  
            pending in the Senate Appropriations Committee.

          4)Prior legislation. AB 572 (Beth Gaines of 2015), would have  
            required DPH to update the California Wellness Plan 2014 to  
            include specified items, including priorities and performance  
            measures that are based upon evidence-based strategies to  
            prevent and control diabetes, and to submit a report to the  
            Legislature by January 1, 2018, to include the progress of  
            those specified plan items. AB 572 was held under submission  
            in the Senate Appropriations Committee.

            AB 270 (Nazarian of 2015), would have required DPH to apply to  
            the State Department of Motor Vehicles to sponsor a diabetes  
            awareness, education, and research specialized license plate  
            program. Would have established the Diabetes Awareness Fund,  
            with revenues to be used by DPH to fund programs related to  
            diabetes awareness and prevention.  AB 270 was held under  
            submission in the Senate Appropriations Committee. 

            SB 1316 (Cannella of 2014), would have required the Department  
            of Health Care Services, DPH, and the Board of Administration  
            of the Public Employees' Retirement System to submit a report  
            to the Legislature regarding their respective diabetes-related  
            programs. SB 1316 was never referred out of Senate Rules  
            AB 1592 (Beth Gaines of 2014), would have required DPH to  
            complete and submit to the Legislature a Diabetes Burden  
            Report by December 31, 2015, including, among other things,  
            actionable items for consideration by the Legislature that  
            would aid in attaining the goals set forth by DPH in the  
            California Wellness Plan for 2014. Would have required DPH to  
            include in the report guidelines that would reduce the fiscal  
            burden of diabetes to the state. AB 1592 was vetoed by the  
            Governor, stating that DPH had already submitted its Diabetes  
            Burden Report to the CDC, as required, and is unable to  
            withdraw the report to include additional information  
                                               prescribed by the bill. 


          AB 2424 (Gomez)                                    Page 11 of ?
          5)Support. Supporters of this bill argue that chronic disease  
            accounts for eight out of every 10 deaths in the state and  
            affects the quality of life for approximately 14 million  
            Californians, and disproportionately affects communities of  
            color. Supporters state that, in 2010, 42% of all health care  
            expenditures in the state was spent on treating common chronic  
            health conditions: arthritis, asthma, cardiovascular disease,  
            diabetes, cancer, and depression, most of which can be  
            prevented. Supporters argue that this bill will empower  
            entities to enact primary prevention programs to help improve  
            policies and behaviors, which can be bigger determinants of  
          6)Opposition. DPH states that, while it is committed to  
            achieving health equity and supports efforts to reduce and  
            prevent the chronic disease burden among all Californians,  
            this bill requires the administration of a program without  
            identifying a funding source or providing funding for the  
            program. DPH states that without funding it would not be able  
            to award any grants.

          7)Amendments. The author requests the following amendments in  
             bold, italics, and underline :

            On page 11, line 27:

            (v) How funds will be used in a manner consistent with  
            principles of effectiveness, cost efficiency, relevance to  
            community needs, maximal impact to improve community health,   
            and   and  sustainability of impact   over time. time, and  
            projections of return on investment to the state.  over time.  

          Support:  American Cancer Society Cancer Action Network
                    American Heart Association/American Stroke Association
                    Boehringer Ingelheim Pharmaceuticals, Inc.
                    California Immigrant Policy Center
                    California Naturopathic Doctors Association
                    California Pan-Ethnic Health Network
                    Community Clinic Association of Los Angeles County
                    Health Access California
                    Health Officers Association of California
                    Public Health Institute
                    SEIU California


          AB 2424 (Gomez)                                    Page 12 of ?
                    Sonoma County Board of Supervisors
          Oppose:   Department of Public Health
                                      -- END --