BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 22| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 22 Author: Roth (D) Amended: 6/2/15 Vote: 21 SENATE HEALTH COMMITTEE: 9-0, 4/29/15 AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen, Pan, Roth, Wolk SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/28/15 AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen SUBJECT: Residency training SOURCE: Author DIGEST: This bill requires the Office of Statewide Health Planning and Development (OSHPD) to establish a non-profit public benefit corporation to be known as the California Medical Residency Training Foundation (Foundation), as specified. This bill requires the Foundation to be governed by a board of trustees, as specified. This bill specifies the duties of the Foundation and OSHPD for the purposes of establishing and funding new residency positions in underserved areas of the state. ANALYSIS: Existing law: 1) Establishes the California Healthcare Workforce Policy Commission (Commission) and requires the Commission to, among SB 22 Page 2 other things, identify specific areas of the state where unmet priority needs for primary care family physicians and registered nurses exist; establish standards for family practice training programs, family practice residency programs, primary care physician assistants programs, and programs that train primary care nurse practitioners; and review and make recommendations to OSHPD about funding of those programs. 2) Establishes the Health Professions Education Foundation (HPEF) within OSHPD. Requires the HPEF to solicit and receive funds from Foundations and other private and public sources and to provide financial assistance in the form of scholarships or loans to students in the health professions who are from underrepresented groups. Establishes, under the HPEF, scholarship, loan, and loan repayment programs for registered nurses, vocational nurses, geriatric nurse practitioners, clinical nurse specialists, and mental health professionals who agree to practice for specified periods of time in underserved areas and in designated practice settings, as specified. 3) Establishes, under HPEF, the Steven M. Thompson Physician Corps Loan Repayment Program, which provides for the repayment of educational loans for licensed physicians and surgeons who practice in medically underserved areas of the state, as defined. 4) Establishes within OSHPD the Health Professions Education Fund to receive funds for scholarships and loans to students from underrepresented groups who are enrolled in or accepted to schools of medicine, dentistry, nursing, and other health professions. 5) Establishes the Song-Brown Health Care Workforce Training Act of 1973, administered by OSHPD to provide financial support to family practice residency programs, nurse practitioner and physician assistant programs, and registered nurse education programs to increase the number of students and residents receiving education and training in family practice and nursing. This bill: SB 22 Page 3 1) Requires OSHPD to establish a non-profit public benefit corporation to be known as the Foundation, which is required to be governed by a board of trustees consisting of a total of 13 members. 2) Requires seven members to be appointed by the Governor, one member appointed by the Speaker of the Assembly, one member by the Senate Committee on Rules, two members of the Medical Board of California (MBC) by the MBC, and two members of the Osteopathic Medical Board of California (OMBC). Permits the board members appointed by the Governor, the Speaker of the Assembly, and the Senate Committee on Rules to include representatives of designated and nondesignated public and private hospitals, community clinics, public and private health insurance providers, the pharmaceutical industry, associations of health care practitioners, and other appropriate members of health or related professions. Specifies terms of appointees. 3) Permits the OSHPD director, after consultation with the president of the board, to appoint a council of advisers comprised of up to nine members, to advise the director and the board on technical matters and programmatic issues related to the Foundation. 4) Requires board and council members appointed by the Governor, Assembly, and Senate to serve without compensation, but to be reimbursed for any actual and necessary expenses incurred in connection with their duties as a board or council member. Requires members appointed by the MBC and OMBC to be reimbursed by those entities for any actual and necessary expenses, as specified. 5) Prohibits any board member from being considered to be engaged in activities inconsistent and incompatible with his or her duties solely as a result of membership on the MBC and OMBC. 6) Makes the Foundation subject to the Nonprofit Public Benefit Corporation Law, except that if there is a conflict with this bill and that law, this bill prevails. 7) Requires the Foundation to: SB 22 Page 4 a) Solicit and accept funds from business, industry, Foundations, and other private or public sources for the purpose of establishing and funding new residency positions described in c) below; b) Encourage public and private sector institutions, including hospitals, colleges, universities, community clinics, and other health agencies and organizations to identify and provide locations for the establishment of new residency positions described in c) below. Requires the Foundation to solicit proposals for medical residency programs and provide OSHPD a copy of all proposals it receives; c) Approve proposals and recommend to OSHPD the establishment of new residency positions upon the sufficient solicitation of funds and at the Foundation's discretion. Requires a recommendation to include all pertinent information necessary for OSHPD to enter into the necessary contracts to establish the residency positions. Requires the Foundation to only approve and recommend proposals that would establish residency positions that will serve a service area that is designated as: i) A primary care shortage area; ii) A health professional shortage area (HPSA) for primary care, by either population or geographic designation by HRSA; iii) A medically underserved area or medically underserved population by HRSA. d) Deposit into the Fund necessary moneys are required to establish and fund the residency program, upon approval of a recommendation; e) Recommend to the OSHPD director that a portion of the funds solicited from the private sector be used for the administrative requirements of the Foundation; and f) Prepare and submit an annual report to the Legislature documenting the amount of money solicited, the amount of SB 22 Page 5 money deposited from the Foundation into the Fund, the recommendations for the location and fields of practice of future residency positions, total expenditures for the year, and the prospective fundraising goals. 8) Requires OSHPD to: a) Provide technical and staff support to the Foundation in meeting all of its responsibilities. b) Provide financial management for the Foundation. c) Approve the recommendation, upon receipt from the Foundation, if it fulfills the requirements of this bill. Requires an approval to signal OSHPD's intent to establish the residency position upon sufficient funds being available. d) Establish a uniform process by which the Foundation may solicit proposals from public and private sector institutions, including hospitals, colleges, universities, community clinics, and other health agencies and organizations that train primary care residents. e) Require that these proposals contain all necessary and pertinent information, including, but not limited to, the location of the proposed residency position; the medical practice area of the proposed residency position; information that demonstrates the area's need for the proposed residency position and for additional primary care practitioners; amount of funding required to establish and operate the residency position; f) Enter into contracts with public and private sector institutions, including hospitals, colleges, universities, community clinics, and other health agencies and organizations in order to fund and establish residency positions at, or in association with, these institutions. g) Ensure that the residency position has been, or will be, approved by the Accreditation Council for Graduate Medical Education; h) Provide the following information to the board: SB 22 Page 6 i) The areas of the state that are deficient in primary care services; ii) The areas of the state that have the highest number of Medi-Cal enrollees and persons eligible to enroll in Medi-Cal, by proportion of population; iii) The proposals received from institutions that train primary care physicians pursuant d) above; and iv) Other information that OSHPD or the board finds relevant to assist the board in making its recommendations on possible locations for new residency positions. i) Monitor the residencies established pursuant to this chapter; and j) Prepare and submit an annual report to the Foundation and the Legislature documenting the amount of money contributed to the fund by the Foundation, the amount of money expended from the fund, the purposes of those expenditures, the number and location of residency positions established and funded, and recommendations for the location of future residency positions. 9) Establishes the Medical Residency Training Fund within the State Treasury, as specified. 10)Makes the level of expenditure by OSHPD for the administrative support of the Foundation is subject to review and approval annually through the State Budget process. 11)Permits OSHPD and the Foundation to solicit and accept public and private donations for deposit in the fund, and makes all money in the fund continuously appropriated to OSHPD for the purposes of this chapter. Requires OSHPD to manage this fund prudently in accordance with applicable laws. 12)Requires any regulations adopted to implement this to be emergency regulations, as specified. 13)Permits OSHPD to exempt from public disclosure any document SB 22 Page 7 in its possession that pertains to a donation made pursuant to this bill if the donor has requested anonymity. Comments 1)Author's statement. According to the author, California has a critical shortage of primary care physicians. In order to maintain our current rate of utilizations, we must train 8,000 more primary care physicians by 2030. Our statewide shortage is further aggravated by misdistribution. Only 16 of California's 58 counties meet the recommended 60-80 primary care physicians per 1,000 people. With an increasing Medi-Cal population, these already underserved areas will see their services stretched even thinner. SB 22 will create a voluntary public-private partnership to fund additional primary care physician residency positions to be placed in these underserved areas of California. By providing a state match of up to $20 million for private contributions, SB 22 creates a fund to provide additional residency positions while allowing a state sanctioned but privately run non-profit organization have a say in the distribution of the positions within these areas. By working closely with private and public stakeholders, this bill aims to create a consensus based solution to meet the need for more doctors in California as access to healthcare continues to grow. 2)Primary Care in California. California is home to the largest number of primary care physicians and nurse practitioner in the country. However, the state ranks 23rd in the number of primary care physicians per resident. An August 2014 report by the California HealthCare Foundation states that California has only 35 to 49 primary care physicians per 100,000 Medi-Cal enrollees. Federal guidelines call for the state to have 60 to 80 doctors per 100,000 patients. The supply of primary care physicians also varies substantially across California's counties. The number of primary care physicians actively practicing in California counties is, in too many cases, at the bottom range of, or below, the state's need. According to 2011 Health Resources and Services Administration (HRSA) data, 29 of California's 58 counties fall at the lower end, or below, the needed supply range for primary care physicians. In other words, half of Californians live in a community where they do not have adequate access to the health care services SB 22 Page 8 they need. 3)The Affordable Care Act (ACA). Under the ACA, about five million Californians have enrolled in either private insurance or Medi-Cal. There are now 12 million Medi-Cal enrollees, about one third of California's population. The newly insured will increase demand for health care from an already strained system. Furthermore, the ACA will change how care is delivered. It provides incentives for expanded and improved primary care, which may affect demand for some health care professionals more than others, and encourages the creation of team-based models of service delivery. Research indicates that health care reform will place higher skill demands on all members of the health care workforce as systems try to improve quality while limiting costs. The scale of change with health care reform is unlike anything that California has previously faced. Studies have found that persons with health insurance use more health care services than uninsured persons, particularly in primary care and preventive services. This was found in Massachusetts, which experienced a substantial increase in demand for primary care services as a result of its 2006 health reform. A February 2, 2015 article in the San Jose Mercury News reported that the primary care physician shortage combined with the millions of newly insured has resulted in significant delays in seeing a doctor and crowded emergency rooms. According to the Mercury News article, "? many experts say the problems are so widespread they shouldn't be ignored." 4)Current workforce development programs. The state currently operates a number of programs designed to increase the number of health care professionals practicing in medically underserved areas: a) HPEF established in 1987 and housed within OSHPD non-profit, HPEF is a non-profit Foundation statutorily created to provide financial incentives to aspiring and practicing health professionals. HPEF offers six scholarships and seven loan repayment programs in several allied health professions, including nursing, mental health, dentistry, and medicine. Scholarship programs SB 22 Page 9 provide financial assistance to healthcare students who are attending a California accredited college or university and agree to practice in California's underserved communities upon graduation. Loan repayment programs are offered to working health professionals to assist in repayment of their education debt in exchange for a service obligation. Service obligations are typically one to three years, and vary depending on the program and awards range from $4,000 to $105,000 depending on profession and length of service obligation. HPEF has increased access to care in the state's underserved areas via 6,693 awards totaling more than $60 million to health practitioner awardees serving in 57 of the state's 58 counties. b) California State Loan Repayment Program (SLRP) provides educational loan repayment assistance to primary health care professionals who provide health care services in federally designated HPSAs. Eligible health professionals include physicians specializing in primary care fields, nurse practitioners, certified nurse-midwives, general practice dentists, registered dental hygienists, clinical or counseling psychologists, clinical social workers, licensed counselors, pharmacists, physician assistants, psychiatric nurse specialists, and marriage and family therapists. Eligible health professionals must be employed by or have accepted employment at a SLRP Certified Eligible Site (which includes rural health clinics, community health clinics, county facilities, and federally qualified health centers) and must commit to providing full-time or half-time primary care services in a HPSA for a minimum of two years. Health professionals may receive up to $50,000 in exchange for a two year full-time service obligation and/or $25,000 for a two year half-time service obligation; individuals can receive up to $150,000 over six years at full-time and $75,00 for half-time. SLRP award amounts are matched by the site(s) in which the health professional is practicing, on a dollar-for-dollar basis, in addition to salary. The SLRP is funded through a grant from the HRSA, Bureau of Clinician Recruitment and Service, National Health Service Corps and is administered by OSHPD. c) Song-Brown Program. The Song-Brown Program was SB 22 Page 10 established to increase the number of family physicians in the state and increase the number of family medicine residency programs. Currently, Song-Brown provides financial support to family medicine and primary care residency (Internal Medicine, OB/GYN and Pediatric) programs, family nurse practitioner programs, primary care physician assistant training programs, and registered nurse education programs. Funding is provided to institutions that provide clinical training and education in underserved areas, and healthcare to the state's underserved population. d) Mini Grants Program provides grants to organizations supporting underrepresented and economically disadvantaged students in pursuit of careers in health care. Organizations receive grants of up to $15,000 to engage in health career conferences, workshops, and/or career exploration activities. Since 2005, over $2.2 million has been awarded to support organizations engaging in these activities serving nearly 56,000 students statewide. In 2014 to2015, via partial funding from Mental Health Services Act Workforce Education and Training, the California Endowment, and the California State Office of Rural Health, OSHPD awarded 46 Mini Grants to organizations for a sum of $603,706. This will help support 16,555 students from demographically underrepresented groups to pursue healthcare careers. e) California Student/Resident Experiences and Rotations in Community Health (CalSEARCH) provides grants to organizations that support student and resident rotations from primary care and mental health disciplines in community clinics, health centers, and public mental health system sites which expose students, residents and practitioners to underserved communities. Organizations awarded receive funding to administer the program and to provide students, residents, and preceptors and mentors a small stipend for completing the program. In addition to completing a rotation in an underserved area, participants are also required to complete a community project. From 2009 to 2012, 150 students and residents were supported via an American Recovery and Reinvestment Act grant. In 2014 SB 22 Page 11 to2015, via funding from the MHSA Workforce Education and Training and The California Endowment, OSHPD granted 12 awards to organizations for a sum of $317,000 which will help support 92 participants statewide. f) MHSA Workforce Education and Training (WET) Program funded by Proposition 63, this program remedies the shortage of mental health practitioners in the public mental health system (PMHS) via: career awareness; PMHS rotations; retention grants; stipends; loan repayments; grants to expand capacity of education and residency programs; grants to increase and retain consumer and family member employment; and grants to support regional partnerships. Prior Legislation SB 1416 (Rubio, 2012) would have created the Graduate Medical Education Trust Fund for the purpose of funding grants to graduate medical education residency programs in California, and would have required OSHPD to develop criteria for distribution of available moneys. SB 1416 was held in the Assembly Appropriations Committee FISCAL EFFECT: Appropriation: Yes Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: 1)One-time administrative costs of about $1 million to create the foundation and develop criteria for making grants (General Fund). In the long-run, donations may support some or all of the activities of the proposed program. In the near term, however, state funds will likely be needed to create the program. 2)Ongoing costs of about $800,000 per year to administer the program, support the Foundation, and review and approve grants and contracts (private funds). SB 22 Page 12 3)Unknown costs to make grants to medical residency programs (private funds). The bill would require the Foundation to solicit donations from public and private sources in order to fund new medical residency positions. The amount of funding available under the program will depend on the success of those fundraising efforts. SUPPORT: (Verified6/1/15) AARP Association of California Healthcare Districts California Academy of Physician Assistants California Chapter of the American College of Emergency Physicians California Physical Therapy Association California Primary Care Association Community Clinic Association of Los Angeles County OPPOSITION: (Verified6/1/15) None received Prepared by:Melanie Moreno / HEALTH / 6/2/15 20:28:34 **** END ****