ASSEMBLY THIRD READING

ATR Bill Id:AB 1759

Author:(Salas)

As Amended Ver:May 17, 2019

Majority vote

SUMMARY:

Requires the Office of Statewide Health Planning and Development (OSHPD), upon an appropriation for the purpose of increasing the health care workforce in rural and underserved areas, to allocate the funds for the support of programs that effect that purpose.

Major Provisions

COMMENTS:

Rural areas are defined as medical service shortage areas (MSSAs) with a population density of less than 250 persons per square mile where no population center exceeds 50,000. MSSAs are sub-city and sub-county geographical units used to organize and display population, demographic and physician data. MSSAs were developed in 1976 by the California Healthcare Workforce Policy Commission (formerly California Health Manpower Policy Commission) to respond to legislative mandates requiring it to determine "areas of unmet priority need for primary care family physicians" (Song-Brown Act) and "geographical rural areas where unmet priority need for medical services exist" (Garamendi Rural Health Services Act of 1976). MSSAs are recognized by the U.S. Health Resources and Services Administration, Bureau of Health Professions' Office of Shortage Designation as rational service areas for purposes of designating Health Profession Shortage areas, and Medically Underserved Areas (MUAs) and Medically Underserved Populations.

Under existing law, priority consideration is given to applicants from rural communities who agree to practice in a physician owned and operated medical practice setting. The programs have limited funding for awards for awardees in all geographic regions of the state regardless of an MSSA rural or urban designation; however, rural preference occurs in the course of ensuring geographic distribution of awards. The table below shows number of applicants versus number of awards per MSSA designation for the Song-Brown Program in fiscal year (FY) 2018-19, and illustrates that a higher proportion of rural applicants are successful applicants. STLRP data for the 2018-19 cycle is not yet available.

The 2019-20 Governor's Budget includes a one-time $50 million GF augmentation to OSHPD to support mental health workforce development. Per the budget bill (see AB 190), $50 million is available for expenditure until FY 2024-25. The 2017 Budget Act included $100 million over three years to support health care workforce initiatives at OSHPD. The funding encourages universities and primary care health professionals to provide health care in MUAs by providing financial support to a variety of medical education programs throughout California. As of December 2018, the allocations have supported 557 first-year residents in existing residency programs and 72 first-year residents in new residency programs created as a result of this funding. The 2019-20 Budget builds on this initial investment through continued support of these programs with $33 million General Fund ongoing beginning in 2020-21.

In 2016, the voters approved Proposition 56, which allocates $40 million in funds towards graduate medical education to sustain, retain, and expand California residency positions in primary care and emergency medicine. The University of California is the designated recipient of the funds and contracted with Physicians for a Healthy California to administer the grant funding. Proposition 56 states that "funding shall be prioritized for direct graduate medical education costs for programs serving medically underserved communities." Funding was prioritized for residency programs serving MUAs. There were a total of 156 residency positions funded in the 2018-19 grant cycle: 82 new and 74 existing residency positions.

According to the Author:

California faces a looming health crisis, most notably (and, unfortunately, unsurprisingly) in the most disadvantaged areas of California. Our state faces a growing demand and significant health care workforce shortage that jeopardizes the health and well-being of Californians. The author states that this health equity issue is one that this bill seeks to address by increasing investments in programs that will help grow the workforce in rural areas.

Arguments in Support:

The California Hospital Association (CHA) supports this bill and states that healthcare workforce shortages are most severe in underserved regions of California, with rural areas being disproportionately impacted. CHA states that this bill will fund programs that will directly address access-to-care challenges within these segments, thereby improving statewide health outcomes.

CaliforniaHealth+Advocates supports this bill and states that the existing shortage of healthcare professionals has made it challenging to recruit and retain providers within Community Health Centers (CHCs). Yet, through the healthcare workforce funding OHSPD provides, CHCs have pioneered health care delivery models that incorporate diverse licensed professionals at all levels.

Arguments in Opposition:

There is no known opposition to this bill.

FISCAL COMMENTS:

According to the Assembly Appropriations Committee, cost pressure conservatively in the millions to fund additional workforce programs. OSHPD administrative costs are assumed to be around 5%, Administrative costs could be higher if new programs are created versus augmenting existing similar programs.

VOTES:

ASM HEALTH: 15-0-0

YES: Wood, Mayes, Aguiar-Curry, Bigelow, Bonta, Burke, Carrillo, Flora, Limón, McCarty, Nazarian, Ramos, Rodriguez, Santiago, Waldron

ASM APPROPRIATIONS: 18-0-0

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

UPDATED:

VERSION: May 17, 2019

CONSULTANT: Lara Flynn / HEALTH / (916) 319-2097 FN: 0000869

Date of Hearing: May 1, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1759

Author:(Salas) – As Amended Ver:March 28, 2019

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill appropriates $50 million from the General Fund (GF) to the Office of Statewide Health Planning and Development (OSHPD) to increase the health care workforce in rural and underserved areas.

FISCAL EFFECT:

$50 million to OSHPD for programs described in the legislation. OSHPD administrative costs are assumed to be around 5%, or $2.5 million of the $50 million, with the remaining funds available to provide grant funding. Administrative costs could be higher if new programs are created versus augmenting existing similar programs.

COMMENTS:

1. Purpose. The author indicates California faces a looming health crisis in its most disadvantaged areas. The author believes the significant gaps in health care access for the most disadvantaged communities will continue to grow if we do not make significant investments in recruiting, training and retaining qualified health care providers in federally designated Health Professional Shortage Areas.
2. Background. The Health Professions Education Foundation is a state non-profit established in 1987 and housed within OSHPD. HPEF administers scholarships and loan repayments programs to health professional students and graduates who are dedicated to providing direct patient care in underserved areas.
3. Current State Funds for Medical Workforce Expansion. The 2019-20 Governor’s Budget includes a one-time $50 million GF augmentation to OSHPD to support mental health workforce development. The 2017 Budget Act included $100 million over three years to support health care workforce initiatives at OSHPD. Voter-approved Proposition 56 of 2016 also allocated $40 million in funds towards graduate medical education to sustain, retain and expand California residency positions in primary care and emergency medicine
4. Major Health Workforce Study. The California Future Health Workforce Commission was a recent foundation-supported statewide effort comprised of senior leaders across multiple sectors, including health, education, employment, labor and government. In a report released in January 2019, the commission noted the state will face a shortfall in the next decade of about 4,000 primary care clinicians and will have only two-thirds of the psychiatrists needed in 2030.
5. Related Legislation. AB 565 (Maienschein), pending referral in the Senate, expands the definition of “practice setting,” for purposes of the STLRP to include a program or facility operated by a county mental health plan.

AB 1619 (Weber), also pending in this committee, appropriates $20 million from the GF to OSHPD to increase the behavioral health care workforce in underserved areas and from underrepresented populations.

SB 539 (Caballero), pending in the Senate Appropriations Committee, creates and transfers a specified amount of Mental Health Services Act revenue into the Mental Health Services Workforce Education and Training Account, to be continuously appropriated to the Office of Statewide Health Planning and Development for the purpose of funding the five-year education and training development plan. It also appropriates $70 million from the General Fund for the same purpose.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: April 23, 2019

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 1759

Author:(Salas) – As Amended Ver:March 28, 2019

SUBJECT: Health care workers: rural and underserved areas.

SUMMARY: Appropriates $50 million from the General Fund (GF) to the Office of Statewide Health Planning and Development (OSHPD) to increase the health care workforce in rural and underserved areas. Requires OSHPD to allocate the funds for the support of programs that effect the purpose described above, including, but not limited to, the following programs:

1. A program to expand the number of primary care physician and psychiatry residency positions, including universities, hospitals, and clinics that have not previously operated residency programs, and to prioritize the allocation of funds to residency programs in Health Professional Shortage Areas (HPSAs);
2. A program to recruit and train students from areas with a large disparity in patient-to-doctor ratios to practice in community health centers in the area from which each student was recruited;
3. A program to expand and strengthen loan repayment programs for primary care physicians and clinicians that agree to serve in HPSAs; and,
4. A program to expand and strengthen programs to recruit and prepare students from underrepresented and low-income backgrounds for health careers.

EXISTING LAW:

1. Establishes the Health Professions Education Foundation (HPEF) within OSHPD to develop criteria for evaluating applicants for various scholarships and loan programs. Establishes within HPEF, the California Physician Corps Program, which consists of the Steven M. Thompson Loan Repayment Program (STLRP) and the Physician Volunteer Program.
2. Establishes the Health Professions Education Fund (Fund), and the Medically Underserved Account for Physicians (MUAP) within the Fund, the primary purpose of which is to provide funding for the operations of the STLRP. Allows HPEF to seek and receive matching funds from foundations and private sources to be placed in the MUAP.
3. Requires STLRP to provide financial incentives to applicants who possess a current valid medical or osteopathic license who practice in medically underserved areas (MUAs). Allows up to 20% of the available positions to be awarded to applicants from specialties outside of primary care, and requires up to 15% of funds to be dedicated to loan assistance for physician and surgeons who agree to practice in geriatric settings.
4. Defines a MUA as a federal HPSA or an area of the state where unmet priority needs for physicians exist as determined by the California Healthcare Workforce Policy Commission. Indicates that HPSAs are designations that indicate health care provider shortages in primary care, dental health, or mental health and these shortages may be geographic-, population-, or facility-based.
5. Defines medically underserved population (MUP) as the Medi-Cal program, and uninsured populations.
6. Defines "rural area" as a medical service study area (MSSA) with a population density of fewer than 250 person per square mile and no population center in excess of 50,000 within the area, as determined by OSHPD.

FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, California faces a looming health crisis, most notably (and, unfortunately, unsurprisingly) in the most disadvantaged areas of California. Our state faces a growing demand and significant health care workforce shortage that jeopardizes the health and well-being of Californians. As our state strives to increase access to health care, if we do not make significant investments in recruiting, training and retaining qualified health care providers, with a particular emphasis on growing the health care workforce in federally designated HPSAs, the significant gaps in health care access for the most disadvantaged communities will continue to grow. The author states that this health equity issue is one that this bill seeks to address by increasing investments in programs that will help grow the workforce in HPSAs.
2. BACKGROUND.
   1. HPEF, STLRP, and Song-Brown Act of 1973. HPEF is a state non-profit established in 1987. HPEF has awarded more than 12,882 scholarships and loan repayments totaling more than $146.7 million to California health professionals serving in all 58 counties in areas of unmet need. STLRP was established in 2003 to increase access to healthcare and promote the retention of primary care physicians in MUAs. The program is counseled by an advisory committee of seven members, with two members recommended by the California Medical Association. Physicians and surgeons can receive up to $105,000 every year in exchange for providing direct patient care in a MUA for a minimum of three years.

Rural areas are defined as a MSSA with a population density of less than 250 persons per square mile where no population center exceeds 50,000.   MSSAs are sub-city and sub-county geographical units used to organize and display population, demographic and physician data. MSSAs were developed in 1976 by the California Healthcare Workforce Policy Commission (formerly California Health Manpower Policy Commission) to respond to legislative mandates requiring it to determine "areas of unmet priority need for primary care family physicians" (Song-Brown Act) and "geographical rural areas where unmet priority need for medical services exist" (Garamendi Rural Health Services Act of 1976). MSSAs are recognized by the U.S. Health Resources and Services Administration, Bureau of Health Professions' Office of Shortage Designation as rational service areas for purposes of designating HPSAs, and MUAs and MUPs.

• 1. Geographic distribution of awards. Under existing law, priority consideration is given to applicants from rural communities who agree to practice in a physician owned and operated medical practice setting. The programs have limited funding for awards for awardees in all geographic regions of the state regardless of an MSSA rural or urban designation; however, rural preference occurs in the course of ensuring geographic distribution of awards. The table below shows number of applicants versus number of awards per MSSA designation for the Song-Brown Program in fiscal year (FY) 2018-19, and illustrates that a higher proportion of rural applicants are successful applicants. STLRP data for the 2018-19 cycle is not yet available.

• 1. Current state funds for medical workforce expansion. The 2019-20 Governor’s Budget includes a one-time $50 million GF augmentation to OSHPD to support mental health workforce development. Per the budget bill (see AB 190), $50 million is available for expenditure until FY 2024-25. The 2017 Budget Act included $100 million over three years to support health care workforce initiatives at OSHPD. The funding encourages universities and primary care health professionals to provide health care in medically underserved areas by providing financial support to a variety of medical education programs throughout California. As of December 2018, the allocations have supported 557 first-year residents in existing residency programs and 72 first-year residents in new residency programs created as a result of this funding. The 2019-20 Budget builds on this initial investment through continued support of these programs with $33 million General Fund ongoing beginning in 2020-21.
     
  2. Proposition 56. In 2016, the voters approved Proposition 56, which allocates $40 million in funds towards graduate medical education to sustain, retain, and expand California residency positions in primary care and emergency medicine. The University of California is the designated recipient of the funds and contracted with Physicians for a Healthy California to administer the grant funding. Proposition 56 states that “funding shall be prioritized for direct graduate medical education costs for programs serving medically underserved communities.” Funding was prioritized for residency programs serving MUAs. There were a total of 156 residency positions funded in the 2018-19 grant cycle: 82 new and 74 existing residency positions.
     
  3. The California Future Health Workforce Commission (Commission). The Commission, convened by major health philanthropies in 2017, was made up of experts in health care, community health, education, and health policymaking. Its charge was to create a comprehensive strategy with actionable recommendations, to be implemented between 2019 and 2030, to close the significant and growing gap between the health workforce that exists in California today and the one that will be required in the near future. According to the Commission, the state will face a shortfall in the next decade of 4,103 primary care clinicians and will have only two-thirds of the psychiatrists needed in 2030.
     

1. SUPPORT. The California Hospital Association (CHA) supports this bill and states that healthcare workforce shortages are most severe in underserved regions of California, with rural areas being disproportionately impacted. CHA states that this bill will fund programs that will directly address access-to-care challenges within these segments, thereby improving statewide health outcomes.
   
   CaliforniaHealth+Advocates supports this bill and states that the existing shortage of healthcare professionals has made it challenging to recruit and retain providers within Community Health Centers (CHCs). Yet, through the healthcare workforce funding OHSPD provides, CHCs have pioneered health care delivery models that incorporate diverse licensed professionals at all levels. These healthcare professionals recruited by CHCs not only help fill the primary care gaps, but also ensure underserved communities continue to have access to culturally and linguistically competent care. CaliforniaHealth+Advocates concludes that a $50 million state investment will allow CHC’s to increase the number of diverse clinicians they recruit and retain so that our state addresses the growing demand for quality and culturally competent health care.
2. RELATED LEGISLATION.
   1. AB 565 (Maienschein) expands the definition of “practice setting,” for purposes of the STLRP to include a program or facility operated by a county mental health plan. AB 565 is pending a vote on the Assembly Floor.
   2. AB 850 (Lackey) would establish the California Social Worker Student Loan Repayment Program in OSHPD to provide loan repayment awards to individuals who have completed a bachelor’s degree in social work, have received a student loan; have been employed as a child welfare social worker for five years; and continue to have repayment obligations on the student loan at the end of that five-year employment period. AB 850 would also require that the loan repayment award be equal to 50% of the balance remaining on the student loan at the end of the five-year employment period; authorize OSHPD to adopt rules and regulations for the purpose of administering the program; and, make its provisions operative only upon appropriate funding, as determined by OSHPD. AB 850 pending in the Assembly Committee on Revenue and Taxation.
   3. AB 1619 (Weber) would appropriate $20 million from the GF to OSHPD for the purpose of reducing the shortage of, and disparity in, mental health services across the state. AB 1619 is scheduled to be heard in the Assembly Health Committee on April 23, 2019.
   4. SB 539 (Caballero) would, among other provisions, appropriate $70 million from the General Fund to OSHPD for the purpose of funding the five-year education and training development plan. SB 539 is pending a hearing in the Senate Health Committee.
3. PREVIOUS LEGISLATION.
   1. AB 2539 (Mathis) of 2018 and AB 148 (Mathis) of 2017 would have expanded eligibility for the California Physician Corps Program in rural areas by revising the definition of “practice setting” to include a clinic that has at least 30% of patients in rural areas; and, a physician owned and operated medical practice setting that provides primary care located in a medically underserved area and has at least 30% of patients in rural areas. AB 148 and AB 2539 were both held on the Senate Appropriations suspense file.
   2. SB 1417 (Hernandez) of 2016 would have required, on and after January 1, 2017 any funds over two million dollars in the Managed Care Administrative Fines and Penalties Fund to annually be transferred to the MUAP in the HPEF, to be used for the purposes of the STLRP. SB 1417 was held in the Senate Appropriations Committee.
4. POLICY COMMENT. This bill appropriates $70 million GF for rural health workforce expansion, AB 1619 (Weber) appropriates $20 million to OSHPD for the mental health workforce, and SB 539 (Caballero) includes $70 million to implement the WET plan. The Legislature may wish to consider how these bills, the Governor’s budget proposal, and the Workforce Commissions’ recommendations all work together.

REGISTERED SUPPORT / OPPOSITION:

Support

California Association of Hospitals and Health Systems
California Hospital Association
CaliforniaHealth+ Advocates
Kaiser Permanente
Latino Coalition for a Healthy California

Opposition

None on file.

Analysis Prepared by: Lara Flynn / HEALTH / (916) 319-2097