BILL ANALYSIS �
SB 1416
Page 1
Date of Hearing: August 8, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1416 (Rubio) - As Amended: August 6, 2012
Policy Committee: HealthVote:13-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill creates the Graduate Medical Education Trust Fund for
the purpose of funding grants to graduate medical education
residency programs in California, and requires the Office of
Statewide Health Planning and Development (OSHPD) to develop
criteria for distribution of available moneys. Specifically,
this bill:
1)Specifies the fund shall consist of private moneys donated by
private individuals or entities to the commission for deposit
into the fund, and interest that accrues on amounts in the
fund.
2)Prohibits General Fund moneys from being used for the bill's
purposes.
3)Requires OSHPD to develop criteria only upon receipt of
donations sufficient to cover the costs of developing the
criteria. Specifies factors OSHPD must consider in criteria
development.
4)Specifies moneys appropriated from the fund may also be used
to fund existing graduate medical education residency slots as
well as new graduate medical education residency slots.
5)Requires OSHPD to, whenever applicable, utilize moneys
appropriated from the fund to provide a match for available
federal funds for graduate medical education.
FISCAL EFFECT
1)Annual expenditures from the Trust Fund, likely over $150,000
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annually, depending upon the level of private donations to the
fund.
2)One-time costs to OSHPD of $10,000 to develop criteria for
distribution of funds via regulation. The bill specifies the
costs of developing the criteria must be covered by donations
to the fund.
3)Costs to OSHPD for administration of the Trust Fund would be
would be $30,000 to 70,000 annually, based on the amount of
money deposited in the fund.
The bill poses state fiscal risk for OSHPD administrative
costs, as it requires Trust Fund moneys to be used solely for
the purpose of funding grants to graduate medical education
residency programs. The bill is unclear as to whether OSPHD
administrative costs may be funded out of Trust Fund moneys;
the bill does not explicitly allow it. If the bill is
interpreted to disallow administrative costs to be funded from
the Trust Fund, OSHPD other non-GF funding sources, such as
special funds, could be at risk for this cost.
COMMENTS
1)Rationale . According to the author, California currently has
statewide workforce shortages in several major health
professions and these needs will increase dramatically due to
population aging, growth, and increasing diversity. This bill
is intended help address these workforce shortages by laying
the groundwork for a permanent fund for residency training
slots targeted at meeting the needs of underserved regions of
California.
2)Background . The Healthcare Workforce Development Division
(HWDD) of OSHPD supports healthcare accessibility through the
promotion of a diverse and competent workforce while providing
analysis of California's healthcare infrastructure and
coordinating healthcare workforce issues. The HWDD
administers several workforce training programs that provide
grant funding to address health workforce diversity, supply,
and distribution issues.
Residency training programs in the U.S. are primarily funded
through Medicare subsidies for direct and indirect costs
incurred by teaching hospitals. Medicare provides nearly $10
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billion annually to support residency programs. Other funding
is provided directly by teaching hospitals, or through private
funds.
A June 2009 report commissioned by the California HealthCare
Foundation found that California has 63 primary care
physicians per 100,000 people, which is near the bottom of the
recommended range of 60-80 primary care physicians per 100,000
people. Furthermore, the distribution of these physicians is
poor. Only 16 counties, generally urban counties, have a
primary care physician supply in the recommended range.
Increasing the number of primary care residency training slots
in medically underserved areas is seen as one method to
increase physician supply and improve physician distribution.
3)Related Legislation . SB 635 (Hern�ndez) upon a finding by the
Department of Finance that the Major Risk Medical Insurance
Program (MRMIP) is inoperative, halts transfers of specified
revenues from the Managed Care Administrative Fines and
Penalties Fund to the MRMIP program, and instead transfers the
funds to a newly created Song-Brown Program Account, which
supports training for health care professionals.
AB 589 (Perea), in 2011, established the Steven M. Thompson
Medical School Scholarship Program, to be implemented
contingent on receipt of sufficient federal and private funds.
AB 589 was held on the Suspense File in the Senate
Appropriations committee.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081