BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 334
AUTHOR: Buchanan
AMENDED: August 11, 2014
HEARING DATE: August 29, 2014
CONSULTANT: Marchand
PURSUANT TO SENATE RULE 29.10.
SUBJECT : Alameda Health System hospital authority.
SUMMARY : Expands a provision of law restricting the ability of
a hospital authority in Alameda County to contract out physician
services to private entities by clarifying that the hospital
authority is also prohibited from contracting out physician
services to a subsidiary or other entity established by the
hospital authority. Contains an urgency clause that will make
this bill effective upon enactment.
Existing law:
1.Establishes a hospital authority as a separate public agency,
established by the Board of Supervisors of Alameda County to
manage, administer, and control the Alameda County Medical
Center (doing business as the AHS).
2.Requires the hospital authority to be governed by a board that
is appointed by the Board of Supervisors of the County of
Alameda, and requires its mission to be the management,
administration, and other control of the group of public
hospitals, clinics, and programs that comprise AHS in a manner
that ensures appropriate, quality, and cost-effective medical
care.
3.Requires the hospital authority to have the power to sue or be
sued, to employ personnel, and to contract for services
required to meet its obligations.
4.Prohibits, prior to January 1, 2024, AHS from entering into
any contract with any private person or entity to replace
services being provided by physicians and surgeons who are
employed by AHS, and in a recognized collective bargaining
unit as of March 31, 2013, without clear and convincing
evidence that the needed medical care can only be delivered
cost-effectively by a private contractor.
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This bill:
1.Revises a provision of law prohibiting AHS, prior to January
1, 2024, from contracting with private entities to replace
services provided by physicians who were employed by AHS and
in a recognized collective bargaining unit as of March 31,
2013, by expanding this provision to prohibit AHS from
contracting these services to "any other person or entity,
including, but not limited to, a subsidiary or other entity
established by the authority."
2.Includes an urgency clause that will make this bill take
effect immediately in order to protect, at the earliest
possible time, the employment status of represented doctors at
AHS, which has incorporated a non-profit public benefit
corporation called Alameda Health Partners.
FISCAL EFFECT : The current version of this bill has not been
heard by a fiscal committee.
PRIOR VOTES : Prior votes not applicable to the current version
of this bill.
COMMENTS :
1.Author's statement. According to the author, this bill is
necessary to clarify the protections afforded to the physicians
employed by AHS. AB 1008 (Buchanan), Chapter 311, Statutes of
2013, required that, prior to contracting with a private entity to
deliver medical services, the hospital authority demonstrate the
cost effectiveness of that service, negotiate with the
representative of the physicians over the decision to privatize,
and submit unresolved disputes to arbitration. This bill would
clarify that the provisions against unilateral contracting of
medical services apply to all third parties, including a wholly
owned subsidiary of AHS.
2.Background on the Alameda Health System. AHS is an integrated
public health care system with more than 800 beds and 1,000
physicians across nine major facilities located throughout
Alameda County. The largest campus in AHS is Highland
Hospital, located in Oakland, with 236 inpatient beds, a
regional trauma center, and an affiliation with UCSF medical
school with 10 residency slots for physician training.
In addition to Highland Hospital, AHS also includes the
following:
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3
a. San Leandro Hospital, a 93-bed medical facility in
central Alameda County;
b. John George Psychiatric Hospital, with 80 licensed beds
in San Leandro;
c. Fairmont Hospital, with a 50-bed Acute Rehabilitation
Center as well as a 109-bed skilled nursing facility; and,
d. A network of community clinics, called Wellness Centers,
which include Highland Wellness Center in Oakland, Eastmont
Wellness Center in Oakland, Hayward Wellness Center, and
Newark Wellness Center.
1.Creation of the hospital authority. In response to growing
budget problems, the Alameda County Board of Supervisors
sponsored AB 2374 (Bates), Chapter 816, Statutes of 1996, to
authorize the County of Alameda to establish a hospital
authority to manage the hospitals and county programs
operating as the AHS. AB 2374 required the governing
structure of the hospital authority to be separate and apart
from the County for the purpose of affecting a transfer of the
management, administration and control of the AHS. AB 2374
required the hospital authority's governing body to be
appointed by the Board of Supervisors.
2.Related legislation. SB 1352 (Hancock), Chapter 46, Statutes
of 2014, replaced outdated statutory references to the Alameda
County Medical Center with references to AHS. This bill made
additional technical and conforming changes to state law and
included legislative findings and declarations regarding AHS.
3.Prior legislation. AB 1008 (Buchanan) made findings regarding
the agreement between Sutter Health and AHS to transfer
ownership of San Leandro Hospital to AHS, and specified how
employees of a facility acquired by, or merged into, AHS shall
be treated with regard to their retirement benefits. AB 1008
also prohibited the AHS from privatizing any work performed by
its employed physicians as of March 31, 2013 without clear and
convincing evidence that the needed medical care can only be
delivered cost-effectively by a private contractor.
AB 2374 (Bates) authorized the Alameda County Board of
Supervisors to establish a hospital authority to manage the
hospitals and county programs operating as the AHS.
4.Support. This bill is co-sponsored by the Union of American
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Physicians and Dentists (UAPD) and the American Federation of
State, County and Municipal Employees (AFSCME). UAPD and
AFSCME state that state, county, city and district employees
already enjoy strong protections against contracting, but it
is unclear that any of those limits on contracting-out extend
to AHS employees. According to UAPD and AFSCME, state law was
recently amended to give some basic protections for Alameda
Health System employees. However, UAPD has learned that AHS
is planning again to attempt to contract out all of its
employed physicians. This bill proposes to clarify the law by
changing technical language regarding contracts, fixing a
slight error in language that could potentially threaten the
jobs of all AHS employees.
SUPPORT AND OPPOSITION :
Support: Union of American Physicians and Dentists (co-sponsor)
American Federation of State, County and Municipal Employees
(co-sponsor)
Oppose: None received.
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