BILL ANALYSIS
AB 2747
Page 1
Date of Hearing: May 12, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2747 (Lowenthal) - As Amended: April 26, 2010
Policy Committee: HealthVote:16-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the California Department of Corrections and
Rehabilitation (CDCR) to maintain a statewide pharmacy services
program and authorizes CDCR to operate and maintain a
centralized pharmacy distribution center to take advantages of
economies of scale.
This bill also requires CDCR to annually report to the
Legislature regarding objectives and performance.
FISCAL EFFECT
No new net costs or savings as this bill essentially codifies
current CDCR/federal medical receivership practice and planning.
The receivership estimates continued implementation of the
existing pharmacy program will result in annual GF savings in
the range of $40 million. An improved pharmacy services program
is a significant component of the receiver's ongoing prison
health care "turn-around plan" as well as the governor's
proposal to reduce correctional health care spending by $800
million in 2010-11.
COMMENTS
1)Rationale . According to the receivership, the sponsor of this
measure, while this bill is not necessary for implementation
of the ongoing pharmacy services program, it is important to
"to ensure the sustainability of a cost-effective prison
health care system once the Receivership has returned control
of prison health care back to some State entity. By codifying
these nationally recognized standards of effective medicine,
the legislature will establish some oversight of the State
AB 2747
Page 2
prison health care system in order to ensure that it does not
once again backslide to an unconstitutional level in the
future."
2)The CDCR pharmacy services problem, as stated by the
receivership in its October 2009 Utilization Management
Project Charter, is a decentralized pharmacy ordering system
with significant waste due to overstock, expiration and a
general inability to effectively track and route medications.
Centralized pharmacy distribution will reduce costs by taking
advantage of economies of scale, ensuring only necessary
medications are stocked, while increasing patient utilization.
3)Background - The California Prison Health Care Receivership is
a non-profit organization created to house the activities of
the federal Receiver. The Receivership was established by U.S.
District Court Judge Thelton E. Henderson as the result of a
2001 class action law suit (Plata v. Schwarzenegger) over the
quality of medical care in the state's 33 prisons. The court
found that the care violated the Eighth Amendment of the U.S.
Constitution, which forbids cruel and unusual punishment of
the incarcerated.
In 2006, the court appointed the receiver to oversee the
delivery of inmate medical care within CDCR. According to the
Department of Finance (DOF) in a 2010-11 budget change
proposal, since 2006 the receiver has significantly increased
the number of clinical staff, clinician pay, access to CDCR
clinicians, and referrals to specialists and contracted
providers, which has resulted in the cost of inmate medical
services increasing from $883 million in 2005-06 to $2 billion
in 2008-09 with a slight reduction in expenditures anticipated
for 2009-10 and 2010-11.
4)Related Legislation .
a) AB 1817 (Arambula), also before the committee today, and
also sponsored by the receiver, requires CDCR to maintain a
medical utilization management program.
b) AB 1785 (Galgiani), also before the committee today, and
also sponsored by the receiver, requires CDCR to maintain
and operate a telemedicine program.
c) AB 2668 (Galgiani), on this committee's Suspense File,
AB 2747
Page 3
requires CDCR to install telemedicine fixtures and
broadband infrastructure in the CDCR Medical Facility.
d) AB 2222 (Galgiani), on this committee's Suspense File,
authorizes CDCR to install telemedicine fixtures and
broadband infrastructure in new or existing buildings
authorized pursuant to phase II of AB 900.
e) AB 2233 (Nielsen), on this committee's Suspense File,
requires CDCR to create a new system of inmate health care
delivery and work with UC and the receiver to assess the
concept of turning inmate health care over to the UC
system.
Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081