BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair


          SB 1416 (Rubio) - Medical residency training
          
          Amended: April 30, 2012         Policy Vote: Health 7-0
          Urgency: No                     Mandate: No
          Hearing Date: May 7, 2012       Consultant: Brendan McCarthy
          
          This bill meets the criteria for referral to the Suspense File.
          
          
          Bill Summary: SB 1416 would create a fund to be used to by the 
          Office of Statewide Health Planning and Development to make 
          grants to medical residency training programs.

          Fiscal Impact: 
              One-time costs up to $150,000 to 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 develop criteria. The development of grant 
              making criteria is subject to the Administrative Procedures 
              Act (beginning at Section 11340 of the Government Code), 
              which typically requires substantial staff time.

              Unknown costs to make grants to medical residency programs 
              (unknown state sources and private funds).

          Background: The Office of Statewide Health Planning and 
          Development operates several programs to support workforce 
          training for the health care sector. Current programs provide 
          loans, scholarships, and loan repayments to students in health 
          professions that meet certain criteria. For example, the 
          Song-Brown Program provides funding to family practice residency 
          programs, physician assistant/nurse practitioner training 
          programs, and registered nurse training programs, with a focus 
          on medically underserved areas.

          In addition, medical residency programs receive support from the 
          federal Medicare program to subsidize the costs to train new 
          physicians.

          Proposed Law: 
              SB 1416 would create a fund in the state treasury, which 








          SB 1416 (Rubio)
          Page 1


              the Office of Statewide Health Planning and Development 
              could use to fund grants to medical residency programs.
              The source of monies in the fund could be private donations 
              or funds appropriated by the Legislature.
              The bill requires the Office to develop criteria for grant 
              making by December 31, 2013, with particular focus on making 
              grants to programs in underserved areas and programs that 
              train primary care providers.

          Related Legislation: SB 635 (Hernandez) would require funds in 
          excess of $1 million from fines and penalties deposited in the 
          Managed Care Administrative Fines and Penalties Fund to be 
          transferred each year to the Office for support of the 
          Song-Brown Program. That bill is in the Assembly Health 
          Committee.

          Staff Comments: While the bill allows for the use of private 
          funds to support the program, there will be upfront costs to 
          develop program criteria. In the absence of private funds, those 
          costs will fall on the state. In addition, there are likely to 
          be some level of ongoing administrative costs to the Office. If 
          private funds do not materialize, those costs would fall on the 
          state.