BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  June 23, 2015


                            ASSEMBLY COMMITTEE ON HEALTH


                                  Rob Bonta, Chair


          SJR  
          7 (Pan) - As Amended April 6, 2015


          SENATE VOTE:  36-0


          SUBJECT:  Medical residency programs.


          SUMMARY:  Urges the U.S. Congress and the President to renew  
          funding for the Health Resources and Services Administration's  
          (HRSA's) Teaching Health Center and Primary Care Residency  
          Expansion Graduate Medical Education (GME) Programs set to  
          expire this year, and lift the freeze on residency positions  
          funded by Medicare to expand physician supply and improve access  
          to health care.  Specifically, this resolution:


          1)Makes findings and declarations, including all of the  
            following:


             a)   According to a 2014 report by the California HealthCare  
               Foundation (CHCF), out of 105,000 licensed physicians, only  
               71,000 are actively involved in providing patient care;

             b)   There are physician shortages in certain regions and  
               will likely be exacerbated by increases in the number  
               insured patients and the number of physicians planning to  








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               retire;



             c)   Federal funding levels of residency training programs  
               have been frozen since 1997, while California's population  
               has increased by more than 10% since that time;



             d)   California has been able to address only a minimal  
               portion of primary care physician (PCP) residency programs'  
               funding shortfall with state funds;



             e)   Many PCPs, including those who have graduated from  
               California medical schools, want to train in California,  
               but are forced to leave the state because of the shortage  
               in training slots at residency programs;



             f)   California has the highest retention rate of physicians  
               who complete their residency training in-state; and,


             g)   Increasing funding for PCP medical residency training  
               programs is a critical step in addressing the physician  
               shortage problem and improving access to medical care.


          2)Resolves that the Legislature call upon the U.S. Congress and  
            President to renew funding for Primary Care Residency  
            Expansion GME Programs, lift the freeze on residency positions  
            funded by Medicare, encourage the development of PCP training  
            programs in ambulatory, community, and medically underserved  
            sites through new funding methodologies and incentives.









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          3)Resolves that the Secretary of the Senate transmit copies of  
            this resolution to the U. S. President and the Vice President,  
            Speaker of the House of Representatives, Majority Leader of  
            the Senate, each Senator and Representative from California in  
            Congress, and to the author for appropriate distribution.


          EXISTING LAW:


          1)Establishes, under federal law, HRSA, an agency of the U.S.  
            Department of Health and Human Services (HHS), as the primary  
            federal agency for improving access to health care by  
            strengthening the health care workforce, building healthy  
            communities, and achieving health equity.


          2)Enacts, in federal law, the Patient Protection and Affordable  
            Care Act (ACA) to, among other things, make statutory changes  
            to expand access to health care coverage for Americans  
            including calling for health workforce needs assessment and  
            action plans, changing Medicare GME to expand training in  
            primary and ambulatory settings, and reauthorizing existing,  
            and creating new, scholarship and loan repayment programs.


          3)Establishes the California Healthcare Workforce Policy  
            Commission (Commission) and requires the Commission to, among  
            other things, identify specific areas of the state whith unmet  
            needs for PCPs; establish standards for family practice  
            training programs and family practice residency programs; and  
            review and make recommendations to the Office of Statewide  
            Health Planning and Development (OSHPD) concerning the funding  
            of residency programs.


          4)Establishes the Health Professions Education Foundation (HPEF)  
            within OSHPD.  Requires the HPEF to solicit and receive funds  








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            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.





          5)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.



          6)Establishes the Song-Brown Health Care Workforce Training Act  
            of 1973 (Song-Brown Act), 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.  The Song-Brown Act also encourages  
            universities and primary care health professionals to provide  
            health care in medically underserved areas.
          FISCAL EFFECT:  None.


          COMMENTS:


          1)PURPOSE OF THIS RESOLUTION.  According to the author, this  
            resolution calls on the federal government to renew funding  
            for teaching health centers that is set to expire at the end  
            of 2015, to lift the freeze on residency positions funded by  
            Medicare, and calls on the President and Congress to encourage  
            the development of primary care training programs in  
            ambulatory, community, and medically underserved sites through  








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            new funding methodologies and incentives.  According to the  
            California Medical Association (CMA), sponsor of this bill,  
            GME is the hands-on training phase of physician education that  
            is mandatory in order for doctors to obtain a license for  
            independent practice.  Although federal, state, and private  
            funds pay for GME, federal contributions through Medicare  
            contribute the bulk; about $9.5 billion annually nationwide.   
            CMA further states that unfortunately, this federal funding  
            source has been frozen since 1997, despite California's  
            population having grown by 20% in the same timeframe.  While  
            the ACA included nearly $50 million to expand primary care  
            residency programs, much of that funding is set to expire at  
            the end of 2015.


          2)BACKGROUND.


             a)   Graduate Medical Education.  GME is a training program  
               for medical school graduates that serve as residents in  
               more than 1,000 of the nation's hospitals.  GME is funded  
               by the federal HHS through the Centers for Medicare and  
               Medicaid Services.  According to a 2012 health policy brief  
               on GME in Health Affairs, overall support for GME comes out  
               of a number of separate public and private sources.  Each  
               year the federal government contributes about $9.5 billion  
               in Medicare funds, and approximately $2 billion in Medicaid  
               to help pay for GME.  The federal government also funds GME  
               in children's hospitals through a program called Teach  
               Health Centers GME, which trains residents in  
               community-based ambulatory settings; and through  
               contributions from other agencies.  Additionally, the brief  
               points out that more than 40 states have paid about $3.78  
               billion through their Medicaid programs to support GME in  
               2009.  Since then, many states have reduced their support  
               for advanced medical training. 

             Medicare supports GME through two separate methodologies when  
               calculating payments to hospitals:  direct payments to pay  








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               the salaries of the residents and the supervising  
               physicians' time; and, indirect payments to subsidize other  
               hospital expenses associated with running training  
               programs, such as longer inpatient stays and more use of  
               tests.  These payments are based, in part, on the number of  
               residents a hospital trains and the number of Medicare  
               patients it treats.  Of the estimated $9.5 billion in  
               Medicare funds spent on GME in 2010, approximately $3  
               billion went for direct payments and $6.5 billion went for  
               indirect payments.  The indirect medical education  
               calculations are complicated and controversial.  The  
               Medicare Payment Advisory Commission, a group that advises  
               Congress, estimates that indirect payment levels may be  
               $3.5 billion higher than actual indirect costs.



             b)   GME and the ACA.  On March 23, 2010, President Obama  
               signed the ACA (Public Law (PL) 111-148), as amended by the  
               Health Care and Education Reconciliation Act of 2010 (PL  
               111-152).  Specifically, the ACA increases the number of  
               GME training positions by redistributing currently unused  
               slots, with priorities given to primary care and general  
               surgery and to states with the lowest resident  
               physician-to-population ratios (effective July 1, 2011);  
               increases flexibility in laws and regulations that govern  
               GME funding to promote training in outpatient settings  
               (effective July 1, 2010); and, ensures the availability of  
               residency programs in rural and underserved areas.


             c)   The ACA and Physician Shortages.  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 by providing incentives for expanded  
               and improved primary care.  Research indicates that health  








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               care reform will place higher skill demands on all members  
               of the health care workforce as systems try to improve  
               quality while limiting costs.  Studies have found that  
               persons with health insurance use more health care services  
               than uninsured persons, particularly in primary care and  
               preventive services.  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."


             d)   Primary Care in California.  California is home to the  
               largest number of primary care physicians and nurse  
               practitioners 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  
               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 may not have adequate access to the  
               health care services they need.


             e)   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:









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               i)     Health Professions Education Foundation established  
                 in 1987 and housed within OSHPD, 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 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.  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.



               ii)    California State Loan Repayment Program (SLRP)  
                 provides educational loan repayment assistance to primary  
                 health care professionals who provide health care  
                 services in federally designated Health Professional  
                 Shortage Areas (HPSAs).  Eligible health professionals  
                 include physicians specializing in primary care fields.   
                 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 and is  
                 administered by OSHPD.











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               iii)   Song-Brown Program was established in 1973 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.



               iv)    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 to 2015, via partial funding  
                 from Mental Health Services Act (MHSA) Workforce  
                 Education and Training, the California Endowment, and the  
                 California State Office of Rural Health, OSHPD awarded 46  
                 grants from the Mini Grants Program to organizations for  
                 a sum of $603,706.



               v)     California Student/Resident Experiences and  
                 Rotations in Community Health 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  








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                 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 to 2015, 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.
          3)SUPPORT.  CMA states in support of this resolution, our state  
            has a trove of PCPs who want to train here, including those  
            who have graduated from California medical schools, but who  
            are forced to leave the state because training slots at  
            medical residency programs are limited.  This is despite the  
            fact that 40% of California's counties fail to meet the  
            recommended ratio of PCPs and likely will face a shortage as  
            the number of insured individuals grows and physicians retire.  
             CMA concludes this resolution calls on the federal government  
            to renew funding for teaching health centers that is set to  
            expire at the end of 2015, to lift the freeze on residency  
            positions funding by Medicare, and would call on the President  
            and Congress to encourage the development of primary care  
            training programs in ambulatory, community, and medically  
            underserved sites through new funding methodologies and  
            incentives.  The Medical Board of California, also writes in  
            support that this resolution may help more physicians to  
            receive residency training positions in California and help  
            with those trained in California to end up practicing in  
            California.  This resolution is in line with MBC's mission of  
            promoting access and care.


          4)RELATED LEGISLATION.  SB 22 (Roth) requires OSHPD to establish  
            a non-profit public benefit corporation to be known as the  
            California Medical Residency Training Foundation, as  
            specified.  SB 22 is currently on the Senate inactive file.








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          5)PREVIOUS LEGISLATION.


             a)   AB 2458 (Bonilla) of 2014 would have established the  
               Graduate Medical Education Fund (Fund) to administer and  
               fund grants to GME residency programs and would have  
               appropriated $25 million to the Fund from the General Fund  
               in fiscal year 2014-15 and $2.84 million to the Fund per  
               year for three years from the California Health Data and  
               Planning Fund commencing with the 2014-15 fiscal year.  AB  
               2458 was held on the Assembly Appropriations Committee  
               Suspense File.



             b)   AB 1176 (Bocanegra and Bonta) of 2014 would have  
               established the Medical Residency Training Program to fund  
               GME residency programs in California and would have  
               required every health insurer or health plan that provides  
               health care coverage in this state to pay an annual GME  
               assessment of $5.00 for each covered life.  AB 1176 was  
               held under submission in the Assembly Appropriations  
               Committee.



             c)   SB 1416 (Rubio and Ed Hernandez) of 2012 would have  
               created the GME 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.



             d)   AJR 13 (Lara), Resolution Chapter 85, Statutes of 2011,  








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               urges the President and Congress to continue to provide  
               resources to increase the supply of physicians in  
               California, in order to improve access to care,  
               particularly for Californians in rural areas and members of  
               underrepresented ethnic groups, and to consider solutions  
               that would increase the number of graduate medical  
               education residency positions to keep pace with the growing  
               numbers of medical school graduates, and the growing need  
               for physicians in California.
          REGISTERED SUPPORT / OPPOSITION:





          Support





          California Medical Association (sponsor)


          California Primary Care Association (sponsor)


          American Federation of State, County and Municipal Employees,  
          AFL-CIO


          Medical Board of California





          Opposition









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          None on file.





          Analysis Prepared by:Patty Rodgers / HEALTH / (916)  
          319-2097