BILL ANALYSIS �
SENATE HEALTH
COMMITTEE ANALYSIS
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 589
A
AUTHOR: Perea
B
AMENDED: May 27, 2011
HEARING DATE: July 6, 2011
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CONSULTANT:
8
Hansel
9
SUBJECT
Medical school scholarships
SUMMARY
Establishes the Steven M. Thompson Medical School
Scholarship Program. Provides that the program is open to
persons who agree in writing, prior to entering an
accredited medical or osteopathic school, to serve in an
eligible practice setting, as defined, for at least three
years.
CHANGES TO EXISTING LAW
Existing law:
Establishes the Health Professions Education Foundation
(Foundation) within the Office of Statewide Health Planning
and Development (OSHPD). Requires the Foundation 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. Provides that the Foundation is governed by a
board consisting of 13 members appointed by the Governor,
Speaker of the Assembly, and Senate Rules Committee.
Continued---
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Establishes, under the Foundation, 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.
Also establishes, under the Foundation, the Steven M.
Thompson Physician Corps Loan Repayment Program (STPCLRP),
which provides for the repayment of educational loans for
licensed physicians and surgeons who practice in medically
underserved areas of the state, as defined. The STPCLRP
is supported by a $25 licensure fee paid by physicians.
Requires the Foundation, in administering the STPCLRP, to
use and develop guidelines for applicants that give
preference to applicants who are best suited to meet the
cultural and linguistic needs of patients in medically
underserved populations, as specified, and who agree to
practice in geriatric care settings. Also allows the
Foundation to appoint a selection committee to provide
policy direction and guidance to the Program.
Requires funds for loan repayment under the STPCLRP to have
a funding match from a foundation or other private source.
Also limits loan repayment awards from exceeding $105,000
per individual physician.
Establishes within OSHPD the Health Professions Education
Fund (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. Provides that moneys in the Fund
are continuously appropriated.
Establishes a Medically Underserved Account for Physicians
within the Fund, the primary purpose of which is to provide
funding for the STPCLRP.
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
STAFF ANALYSIS OF ASSEMBLY BILL 589 (Perea) Page
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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.
This bill:
Establishes within the Foundation the Steven M. Thompson
Medical School Scholarship Program (Program).
Provides that the Program is open to persons who agree in
writing, prior to entering an accredited medical or
osteopathic school, to serve in an eligible practice
setting, as defined, for at least three years. Requires
participants to commit to three years of full-time
professional practice once they have achieved full
licensure.
Defines an eligible practice setting as either: (1) a
community clinic or clinic owned and operated by a public
hospital or hospital that contracts to provide services to
county indigent patients that is located in a medically
underserved area, at least 50 percent of whose patients are
from a medically underserved population, as defined; or (2)
a medical practice that is located in a medically
underserved area, at least 50 percent of whose patients are
from a medically underserved population.
Limits the maximum amount per scholarship to $105,000.
Requires the funds to be distributed over the course of a
standard medical school curriculum, in increasing amounts
over the course of the curriculum, to ensure that at least
45 percent of the total scholarship award is distributed
upon commencement of the final year of school.
Provides that in the event the participant does not
complete the minimum three years of service, pursuant to
the contractual agreement, OSHPD shall recover the funds
plus maximum allowable interest.
Requires the selection committee that supports the STPCLRP
to use guidelines for selecting applicants that give
priority to applicants who speak a Medi-Cal threshold
language, come from an economically disadvantaged
background, have experience working in medically
underserved areas or with medically underserved
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populations, and commit to practice primary care.
Establishes the Steven M. Thompson Medical School
Scholarship Account within the Fund for the purpose of
receiving federal or private funds. Provides that funds in
the account are subject to appropriation by the
Legislature.
Limits the costs of administering the program to five
percent of total appropriations for the Program.
Provides that the bill shall be implemented only to the
extent that sufficient funds exist in the Account as
determined by the Foundation.
Directs the Foundation and OSHPD to provide the ongoing
program management for the Program.
FISCAL IMPACT
According to the Assembly Appropriations Committee
analysis, AB 589 would impose negligible direct state
costs.
BACKGROUND AND DISCUSSION
According to the author, AB 589 seeks to address the
problem of shortages of primary care physicians in over 200
regions of California that are identified as medically
underserved areas. The bill also aims to make medical
school more financially accessible for students who are
willing to pursue careers in primary care, particularly
economically disadvantaged students. The author argues
that there is a growing geographical disparity in access to
physicians that AB 589 would help to address.
Current health workforce shortages
Statewide shortages of health providers currently exist in
several major health professions, such as nursing, primary
care providers, and allied health. (Allied health
professions are clinical health care professions distinct
from medicine, dentistry, and nursing.) Health care
workforce needs are projected to increase dramatically due
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to the aging of the population and the state's increasing
diversity. In February of 2009, the Senate Health
Committee held a hearing on California's health care
workforce. The background paper, prepared by the Senate
Office of Research (SOR), stated that the health care
worker shortage is defined in many ways, citing the
following:
� The state will face a shortage of up to 17,000 physicians
by 2015.
� The Center for California Health Workforce Studies
researchers indicate that the registered nurse shortage
is between 7,000 and 21,000. This shortage is expected to
grow due to both the aging of the general population and
the nursing workforce.
� It is projected that California will need a 26.1 percent
growth in the number of pharmacists from 2006 to 2016.
� Fifty percent of the public health workforce and seventy
percent of community clinic administrators will retire in
the next five to ten years.
� Seventy-six percent of clinics report a staffing shortage
of allied health workers.
In addition to the shortages of certain health
professionals, SOR stated that California's health
professions workforce does not reflect the state's
demographic racial and ethnic composition and language
proficiency. According to research conducted by the Public
Health Institute and UC Berkeley's School of Public Health,
California's emerging populations are underrepresented in
all health professions and in the health professions
pipeline. A recent report by the Institute of Medicine
links poorer health outcomes for minorities to the shortage
of minority health care providers. One reason for this is
that persons of color are less likely than whites to
receive needed services due to cultural or linguistic
barriers between the health care provider and the patient.
Current health 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:
Health Professions Education Foundation. The Health
Professions Education Foundation, located in OSHPD,
provides scholarships and loan repayments to aspiring and
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practicing health professionals who agree to practice in
a medically underserved area. Scholarships are offered
to health professional students who are attending a
California accredited college or university. Loan
repayment programs are offered to graduates who are
pursuing a health professional career to assist in the
repayment of education debt. Scholarships are offered to
students and graduates in several allied health
professions, nursing, mental health, dentistry, and
medicine. In exchange for financial assistance, awardees
are required to provide direct patient care in a
medically underserved area. Service obligations are
typically one to four years, and vary depending on the
program. One of the programs offered under the
Foundation is the STPCLRP, which provides assistance with
the repayment of educational loans for licensed
physicians and surgeons who practice in medically
underserved areas of the state.
California State Loan Repayment Program. The California
State Loan Repayment Program (CSLRP) provides educational
loan repayment assistance to primary healthcare
professionals who provide healthcare services in
federally designated Health Professional Shortage Areas
(HPSAs). Eligible health professionals include
physicians specializing in primary care fields, nurse
practitioners, certified nurse-midwives, general practice
dentists, dental hygienists, clinical or counseling
psychologists, clinical social workers, licensed
counselors, psychiatric nurse specialists, and marriage
and family therapists. Eligible health professionals
also must be employed, or have accepted employment, at an
eligible site (which includes county facilities, rural
health clinics, community health clinics, and federally
qualified health centers) and must commit to providing
full-time primary care services in a HPSA for a minimum
of two years. Health professionals may receive $60,000
in exchange for a two-year service obligation, $100,000
for a three-year service obligation, and up to $170,000
over five years, the cost of which is divided between
state award amounts and matching funds from the site in
which the health professional will be practicing. The
CSLRP is funded through a grant from the Bureau of Health
Professions, National Health Service Corps and is
administered by OSHPD.
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Song-Brown Program. The Song-Brown Health Care Workforce
Training Act was established in 1973 to address the
shortage of physicians engaged in family practice in
California by providing financial support to family
practice residency, nurse practitioner, physician
assistant, and registered nurse education programs
throughout California. It also encourages universities
and primary care health professionals to provide health
care in medically underserved areas. The Song-Brown
program currently funds 27 California family practice
residency programs, 16 physician assistant/nurse
practitioner programs, and 34 registered nurse education
programs. Total funding proposed for the Song-Brown
program in the Governor's 2011-12 budget is $7.1 million.
Related bills
SB 635 (Hernandez) requires funds deposited in the Managed
Care Administrative Fines and Penalties Fund in excess of
$1,000,000 be transferred each year to OSHPD for the
purposes of the Song-Brown Program. Currently in Assembly
Health Committee.
Prior legislation
AB 2551 (Hernandez) of 2010 would have established the
Health Workforce
Development Fund, consisting of moneys received from
federal and private sources, as specified. Would have
authorized the Fund to be used, upon appropriation by the
Legislature, for prescribed purposes relating to health
workforce development, and required the California
Workforce Investment Board and the Office of Statewide
Health Planning and Development to report specified
information to the Legislature annually as specified.
Failed passage on the Senate floor.
AB 657 (Hernandez) of 2009 - 2010 Session, would have
required OSHPD, in collaboration with the California
Workforce Investment Board, to establish the Health
Professions Workforce Task Force composed of specified
members, to assist in the development of a health
professions workforce master plan for the state, and would
prescribe the functions and duties of the task force in
that regard. Vetoed by the Governor, who stated in his
veto message that he thought the bill was unnecessary and
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duplicative of efforts already underway.
AB 2375 (Hernandez) of 2007 - 2008 Session, would have
required OSHPD to establish the Health Professions
Workforce Task Force, as specified, to assist in the
development of a health professions workforce master plan.
Held in Senate Appropriations Committee.
AB 2439 (De La Torre), Chapter 640, Statutes of 2008,
requires the Medical Board of California (MBC) to assess an
additional $25 fee for the initial license and license
renewal of a physician or surgeon to support the STPCLRP.
Requires up to 15 percent of the funds collected from the
additional $25 fee to be dedicated to loan assistance for
physicians who agree to practice in geriatric care
settings, as specified.
AB 327 (De La Torre), Chapter 293, Statutes of 2005,
requires the MBC to assess an applicant a $50 fee for the
issuance and renewal of a physician and surgeon's
certificate. Specifies that payment of the fee is voluntary
and directs the fees to the Medically Underserved Account
for the STPCLRP.
AB 920 (Aghazarian), Chapter 317, Statutes of 2005 provides
for the transfer of the
STPCLRP and the Physician Volunteer Program from the MBC to
the California Physician Corps Program within the Health
Professions Education Foundation, effective July 1, 2006.
AB 1403 (Nunez), Chapter 367, Statutes of 200, renames the
California Physician Corps Loan Repayment Program of 2002
as the STPCLRP.
AB 982 (Firebaugh), Chapter 1131, Statutes of 2002, creates
the California Physician Corps Loan Repayment Program of
2002. This program is administered by the Division of
Licensing of MBC for the purpose of granting loan repayment
awards to physicians and surgeons working in medically
underserved communities.
Arguments in support
The California Medical Association states that the most
conservative projections of the need for physicians in
California project a shortage of 17,000 physicians by 2015,
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which does not take into account the increase in newly
insured persons due to federal health care reform.
Exacerbating this problem is the extremely high debt
medical students incur, which now averages $150,000 for
graduating medical students. AB 589 will supplement the
STPCLRP and allow the state to address both the problem of
insufficient numbers of physicians and the high cost of
medical education.
The MBC states that AB 589 will help make medical school
more affordable for students willing to pursue careers in
primary care, as well as help to address the geographical
disparity of physician supply in California.
PRIOR ACTIONS
Assembly Business, Professions and Consumer Protection:6- 3
Assembly Appropriations: 12- 5
Assembly Floor: 63- 10
COMMENTS
1. Funds for loan repayment program should be preserved
for that purpose. AB 589 would establish a new account to
receive federal and private funds for medical school
scholarships, separate from the account that currently
supports the STPCLRP. A suggested amendment would be to
clarify that funds for the loan repayment program shall not
be used for purposes of the scholarship program.
2. Scholarships versus loan repayment. AB 589 would
supplement the state's programs for primary care workforce
development by creating a new scholarship program for
medical school students who commit to serve in underserved
areas of the state. Generally, loan repayment programs are
more cost effective to administer and more able to be
geographically targeted than scholarship programs. OSHPD
reports that scholarship programs typically have a higher
breach rate, i.e. a higher percentage of recipients fail to
provide their obligated service and the must repay the
loans. In addition, it is easier to ensure geographic
diversity through loan repayment programs, because they
apply to licensed physicians who are locating their
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practice, instead of still in school.
3. Short-term impact of federal health care reform.
Beginning in 2014, over 3 million additional Californians
are expected to be insured, which will exacerbate the
state's shortage of physicians and other primary care
providers. While a medical school scholarship program
could help address the state's long-term need for
physicians, putting more resources into physician and other
primary care provider loan repayment programs could have a
greater immediate impact in helping the state meet the
increase in demand that is expected to occur beginning in
2014.
POSITIONS
Support: California Medical Association (sponsor)
Association of California Healthcare Districts
California Primary Care Association
Children's Hospital Central California
City of Kernan
Community Clinic Association of Los Angeles
County
Medical Board of California
Oppose:None received
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