Assembly Budget Subcommittee No. 1 on Health

I would also like to request that the panelists try to be brief so that we can get through this agenda at a reasonable time. Finally, we will take public comment after each of the seven issues on the agenda. Our first issue will be the presentation of the State of Public Health report by the Director of the Department of Public Health, who is also California State Public Health Officer, Dr. Tomas Aragon. Welcome, and please begin whenever you're ready.

Maybe it's this. Here we go. Okay. Good afternoon, chair and Members, I am Dr. Tomas Aragon, state public health officer and Director of the California Department of Public Health. It's an honor to be here today to present on the State of Public Health in California at CDPH. Our mission is to advance the health and well being of California's diverse people and communities with the vision that all Californians enjoy healthy communities with thriving families and individuals.

Public health is our collective effort to protect, promote, and improve the health of all communities in California. This year, CDPH submitted the inaugural State of Public Health report highlighting key public health indicators, health disparities, and leading causes of morbidity and mortality. This report serves as a foundational tool for monitoring population health, informing public health action, and promoting shared accountability. Our approach to safeguarding and enhancing health in California is guided by four principles in public health. First, ecological and social environments.

This pillar centers on the connections between individuals, their families, and social circles, as well as their interaction with their neighborhood and environment. Second, the life course perspective. This pillar acknowledges that health is influenced by experiences throughout one's life and the lives of past generations. Third, equity and health equity. This pillar focuses on creating fair and just conditions where everyone has the opportunity to achieve optimal health free from discrimination and racism. Fourth, prevention focused.

This pillar prioritizes primary prevention, particularly intervening early to address potential health problems before they arise. Over the past 20 years, the health and well being of Californians has improved. These achievements are due in part to our collective public health prevention strategies and investments. Life expectancy increased over this period, with declines in ischemic heart disease, stroke, lung cancer, chronic obstructive pulmonary disease, prostate cancer, and breast cancer.

Our tobacco prevention efforts led to a 59% reduction in lung cancer death rates, and we boast the second lowest smoking rates in the nation. Similarly, public health and medicine contributed to a 60% decline in ischemic heart disease deaths. Interventions included promoting healthy eating and active living and increasing access to quality health care. California's infant mortality rates rank among the lowest in the country, driven by maternal and child health programs that include nutritional support, genetic disease screening, home visiting, and the WIC programs.

Despite important health gains, there are long term increases in deaths due to Alzheimer's disease, hypertensive heart disease, drug overdoses, and racial and ethnic and sociodemographic disparities persist across these and other leading causes of death. The Covid-19 pandemic presented unprecedented challenges impacting life expectancy for the first time in 20 years, the pandemic underscored and amplified long standing racial, ethnic, and sociodemographic health inequities. Our Covid-19 response mitigated the health, social, and economic impacts of the pandemic.

As a result, Covid's impact has shifted from high rates of hospitalizations and deaths to the less severe endemic status we have today. As we navigate the post pandemic recovery, we remain focused on protecting the highest risk communities and patients. The life course approach informs our prevention strategies. I will walk you through some selected challenges, starting with early life stages a healthy start in life is crucial for long term well being.

Factors such as prenatal care, access to health care, economic, housing, and food security, and positive social connections influence health outcomes. Adversity and health disparities early in life drive unequal outcomes throughout life. Although California has some of the lowest infant and pregnancy related mortality rates in the nation, black infants and families experience significant disparities in perinatal outcomes. In 2022, the mortality rate was three times higher for black children and nearly two times higher for Latino children compared to white children.

Infomity rates are also significantly higher in neighborhoods with higher rates of poverty, although their rate is improving. Black women were three to seven times more likely to die from pregnancy related out causes. Structural and interpersonal racism is a key driver of these disparities, impacting neighborhood conditions, chronic stress, and access to respectful care. To summarize this evidence, in late 2023, CDPH and UCSF published a report entitled Centering Black Mothers in California Insights into racism, health, and well being for black women and infants.

Racial and ethnic disparities are also observed in adverse childhood experiences, which are linked to negative health outcomes. Throughout the life course. Native American, Pacific Islander, and black Californians experience more aces than other groups consistent with national trends, congenital syphilis cases are increasing, bringing their highest levels in 30 years. Cases were more common among parents with limited access to prenatal care and facing social challenges such as substance use disorder, homelessness, or prior incarceration.

From 2016 to 2020, from national data, California youth experience an increase in depression or anxiety from 7% to almost 12%. As we move along the life course, young adults in California are facing a significant burden of injury related deaths, mental health struggles, and interpersonal violence. For young adults aged 15 to 44, that should be 24. The leading causes of death in 2022 were primarily injury related, including deaths from traffic injuries, drug overdose, alcohol related deaths, suicide, and homicide.

Young adults had the highest rates of mental health related emergency room visits and hospitalizations, with black young adults experiencing significantly higher rates among adults ages 18 to 34. Adults sorry young adults ages 18 to 34 experience the highest rates. Highest prevalence of poor mental health and depression. Young adults also experience the highest rates of homicide death. Black males experience homicide rates eight times greater than the overall population, with homicide being their leading cause of death. Firearms accounted for 72% of all homicide deaths.

Communities with high levels of violence face secondary trauma from exposure to violence, such as hearing, gunshots and walking to work or school near sites where violence events have occurred. Suicide and self harm are major preventable public health outcomes that have emotional and community impacts. While the highest rates of suicide were Native Americans and white youth, the largest increases in suicide were among black youth, followed by Latino youth. Firearms are the most common means of suicide in rural communities in the northern regions, experiencing higher mortality rates.

As we move along the life course to older adults, chronic diseases are the major health burden. Cardiovascular disease, including stroke, is the leading cause of death for Californians aged 45 and older. Risk factors are more common in Low income communities and communities of color. These communities face barriers to regular physical activity, healthy food access, gainful employment, and quality education. Although death rates have generally declined, cancer remains a significant cause of death, claiming over 60,000 deaths in California in 2022.

Alzheimer's disease was the leading cause of death for older adults, adults older than 85, and the second leading cause of death overall in 2022. So what are we doing at CDPH? We promote community based interventions at the earliest stages of life and promoting prevention and upstream strategies to improve social drivers of health and equity. Addressing growing behavioral health challenges is a top priority. We're integrating behavioral health into public health strategies, focusing on prevention, resiliency, and equity.

More than 50 different programs at CDPH are working to improve behavioral health outcomes for all Californians under Cal HHS, the California Children and Youth Behavioral Health Initiative, CDPH is leading a community based youth suicide prevention media and outreach campaign for youth at increased risk of suicide. A public health campaign co designed with youth to reduce stigma around behavioral health and to increase help seeking behavior and wellness support.

The Youth Suicide Reporting and Crisis Response Pilot program is testing models where youth suicide and attempted suicide events lead to a rapid and comprehensive local community response. Additional initiatives in behavioral health prevention include Governor Newsom's master plan for tackling the fentanyl and opioid crisis, including a one stop resource website, Opioids.CA.Gov. Funding to increase the substance and Addiction Prevention Branch at CDPH has enabled us to increase outreach, education, and promote harm reduction efforts.

The Innovative California Reducing Disparities Project is using community defined evidence practices to promote and improve mental health. And the creation of the Office of Suicide Prevention and increased efforts to address the root causes of suicide and self harm are areas where we're making progress. The landmark future of public health investment, initiated by the Governor and the Legislature in 2021, is a pivotal step in strengthening our public health infrastructure, developing our workforce, fostering community resilience, and preparing for future emergencies and threats.

CDPH will use this report to seek collaboration opportunities to work towards equitable health outcomes, including addressing the drivers of health problems and health inequities, strengthening protective factors such as nurturing and safe home and school environments, access to parks and green space, including economic development and supports quality health care and education. Californians are enjoying major improvements in health and well being over the past 20 years. California continues to boldly address emerging public health challenges.

We are committed to reducing health inequities and addressing the structural and social determinants of health. I look forward to working with you to achieve our shared vision to protect and improve the health and well being of California's communities. Thank you for your leadership and partnership in these efforts.

Thank you, Dr. Aragon. And before I proceed with my questions, I really want to extend our appreciation from the Legislature to both you and your Department for the reports that you all have created and for you coming today to present it. I know this has been discussed for many, many years, and to see it finally done is really what we need to kind of understand the public health of our state and see how we as a legislative body can do better working with you all.

So thank you so much for that. I did read your Executive summary. It was not necessarily surprising because some of these things we've been hearing about for years, as far as where the disparity is in terms of care and life expectancy and outcomes. I have actually a lot of questions for you, and so since I'm the only one I get a chance to answer, ask them.

One of the things that you talked about is the fact that California has been able to reduce the ischemic heart disease rate by 60%. Is that regardless of race, that you've seen that drop, or is that just an overall figure?

So, in General, we've seen improvements across all racial ethnic groups. The challenge that continues to exist is the persistent disparities between the different groups and that you pretty much see across all. If you look at all leading causes, you continue to see that disparity, and it's especially pronounced among African American communities.

Thank you. And when I'm looking at the multiple lenses, the five conditions based on multiple measures, looking at deaths, the top five deaths include ischemic heart disease and hypertensive heart disease. Do we need to have more targeted programs, or do we have targeted programs and interventions that really focus on heart health and early heart health?

Yeah. So under the whole area of chronic disease, we approach it in a very holistic way. We try to encourage people to physical activity, improve nutrition, decrease stress, all that, and having good access to healthcare, and a lot of this. So CDPH does have some select. We do have programs in those areas. We Fund local health departments to do more work in that area.

And this is an area where there's an important partnership with the healthcare system, because the healthcare system obviously has that contact with patients as they develop issues. So it's really a combination of all of these coming together. And the other thing that's had a big impact over time. We've been very successful as a state to decrease the prevalence of smoking, and that's had a big impact, not just on lung cancer, but also cardiovascular disease outcomes.

And when you're funding or you're working with different local organizations or counties, what kind of reporting requirements do you have? And is there a specific benchmark? Must they have to continue getting funds?

Yeah, we have over 220 programs, and so it depends on the programs, depends on the grant requirements. Some of them are federal funds that come through us, that have specific requirements that we pass, and then there are things that come from the state. But, yes, we do have requirements.

And I would say that's actually one of the areas where, since I became Director, now I'm beginning my fourth year, is really having an intention and focus on asking people, what are you trying to accomplish, and how do we know we're making progress?

So we're really promoting the whole concept of what people call objectives and key results to be very public with what are we trying to accomplish, because that's the only way that we're going to know that we can hold ourselves and others accountable to those goals. So that's the approach that we're taking because we absolutely need to make more progress in that area.

Yeah. Thank you. Thank you for doing that. I think sometimes we forget to go back and make sure that the things that we funded are actually working. And if we want to not only decrease the overall disease prevalence of certain these things, but also the disparity, then we need to make sure that we're kind of tackling both of them.

Yeah, because I want to just make one additional comment. So some of these outcomes, they have complex social causes. So there's what we do and then there's what the rest of Californians do. So really it's a team California effort to make progress. And so even if we do our best and we're doing our best performance, sometimes things change that are beyond our control. That's why it's important for us to really, to all of us, work as a community on these issues.

Right. And I think that's one of the reasons why this report is so great, because we are a part of that team to improve the health and well being of all Californians. And so kind of along that line, do you feel that our largest investments from a legislative standpoint and public health are lined with the leading causes of morbidity and mortality that we see in our state?

Yeah. Yes, I do. And I would say what I'm really proud of, of the state is that I feel that we're applying the latest science and what we know about chronic diseases. In the older days, we would focus on chronic diseases by just focusing on adults, screening them, getting them into care. We now realize that it's really life course and intergenerational processes, chronic trauma, stress, early life adversity, physically changes your brain, body and behaviors for your whole life course.

And so now we're able to connect the .s. And that's one of the biggest messages that we're trying to get out with this report, is that a lot of the indicators have not changed, but what has changed is our understanding of what's driving these outcomes. And so an emphasis on earlier life, focusing on pregnant people, all of these are, I would say, over the past several years has been a big focus from the HHS on down. And I think that that's an important message that we're trying to get out.

So along that route you mentioned, and it's also in your report, about early death rates and infant mortality being higher in African Americans and in API community, which also continues throughout their life, leading to, unfortunately, a lower life expectancy. Do you have any programs or what are you all specifically doing or recommending to specifically focus and target these communities to help in that particular area?

So we're partnering with the California surgeon General in this specific area. So there is a collaborative involving their office, CDPH academicians, and community based organizations around the area of maternal health and morbidity and mortality. But within CDPH, we have a lot of programs that touches these lives, the WIC program, home visiting, as well as many others, maternal, child and adolescent health. We have our block grant that gets money out to the locals in this area.

Actually, I had lunch today with the person who actually looks at the data in maternal, child and adolescent health between the ages of 1 and 10. And so we have a lot going on, but there's areas that we can absolutely make more progress. I think we have a lot of work to do. One of the challenges that we have is that we have data when people are born, we have data when they start going to school.

We have this time period between there where it's really hard to get data. So you have to triangulate a lot of different data sets to try to figure out what's going on, because those early life events are so critical to the trajectory of those children. So we're working in that area.

Back to your figure on the top five conditions. When you look at the number of hospitalizations, of the top five, you've got number three for mood disorders and number five for schizophrenia. Both are behavioral health issues. What do you think that we need to do better as a state to assist in this area?

Yeah, and I think this is a challenge. The behavioral health challenges is something we're seeing, really, across the United States, across the world, and in public health. We've come to realize public health in General in the past would focus less on mental health, and now we recognize that it is among the most important areas to us to focus on, because both when I say behavioral health, I mean mental health and also substance use disorder.

These are primarily determined by early life events, the social conditions you have, the adversity, and how it impacts your brain and Executive function. It's so critical. So for us to sort of connect the .s and to continue to focus and prioritize on the youngest populations, the youngest families, is how we're going to have the biggest impact. One of the challenges you're seeing right now, for example, is just the drug overdose deaths. They continue to go up and up and up.

The drugs are becoming much more dangerous. Things like fentanyl and other synthetic opioids that are going to become available. It's really hard to turn people around when the drugs have become so powerful and so deadly. We have to reach people earlier in life, and that's the lens that we're approaching. This area of behavioral health is to focus on that life course. The other thing I want to mention is that we know this for physical health, physical health.

We know the concept of primary prevention in mental health. There's limited data on what can we do around primary prevention of mental health. And so that's an emerging area. There's things coming out on social media we already know, for example, adversity is important, but it's an area that we as a state have moved in that direction of really beginning to think about how do we use emerging evidence in these areas. So I think that's where we're going to have the biggest impact. We have to go upstream to make that difference.

Yeah, I like that frame, that term upstream. I saw you guys used it quite a bit in the report. I want to ask you about syphilis. We are seeing an uptick. I had a patient referred to me two weeks ago, teenager with syphilis. Why do you think we are seeing such an uptick in our syphilis cases? And also that then translates into neonatal?

That's a really good question. And syphilis has been increasing now for more than a decade. It's been happening for a while, and it has been a challenge more recently. It has been primarily impacted by social and economic factors and also, for example, housing instability, homelessness, drug use, for example. We're seeing now more congenital syphilis cases than we've ever seen.

And so the state has initiated a task force to work on this, and we're working with a new task force at the national level that has also been convened to figure out how we can get ahead of this. And this is a core public health issue because it requires the medical system, screening diagnoses, getting people into care, getting them the medications. And it's a challenge that we've been facing. Hopefully, the task force will come up with different ways of approaching this, but it's a big challenge.

Yeah. Okay. Would it be possible or even useful to create kind of like a crosswalk between state funding and some of the leading causes of morbidity and mortality within our state?

Yeah, we think it would be for selected indicators, and then we'd have to recognize the limitations. I'll give you an example. So take, for example, drug overdoses. There are certain things that we're doing at the state that obviously directly impact drug overdoses. It's easier to enumerate those. But as I mentioned, sort of prevention activities, which means having a healthy, safe childhood. That's harder to measure. How much of that we know that that has a big impact, for example, on eventual drug use and then drug overdoses.

How do we measure that? It's harder to measure, and that's one of the challenges that we have. We tend to focus on the things that we see, a direct connection. It's connecting the .s and these indirect connections that really matter. And so we have to recognize, we can measure part of what we invest, but we also invest in things that we don't see the direct connection, but we know through evidence makes a big difference. So that would be the limitation of doing that kind of approach.

Okay, my final question. You may have an answer for you may not. It may be something that you think about, but one of the things that I was surprised that you talked a lot about in the report, and you brought it up today in your presentation, is the impact of structural racism.

Part of the conclusion in the Executive summary stated, the effects of structural racism are evident across the life stages, disparities in health care conditions and life expectancy as they continue to drive unequal access to the resources and opportunities necessary for good health and wellbeing. And that really struck me. How do we fix that here in the great State of California?

What I've learned in my life and in my career, fixing anything starts by first naming it. If you don't name it, you can't fix it. And to me, that's the first step. And so I'm proud of the Administration, HHS, our Department, is that we have to first name it.

We also have to recognize there are the things that are, again, sort of easier to measure, the things that are directly impact, and then there are the things that are harder to measure, the indirect ways that affect race. So we have to keep this in a holistic way, recognize the role that racism and discrimination traumatizes people across the life course, recognize that it's not just race. It's ethnicity, immigration, sexual orientation, gender identity. It's other areas as well as their intersections where people are impacted.

The other thing I want to mention is that one of the things that we know that through long standing policies. Policies have a differential impact and that's one way of thinking about structural racism. When Covid happened and the schools closed, when I was the local health officer, we recognized that we know what schools are going to open up first. We know that the schools that are well resourced have the ability to get open and they're more likely to be in higher income areas.

Those schools are going to open up first and it's the other schools that get left behind. So when that happened, we consider that as an example of structural racism. It's not intentional, it's not obvious, but when something like that happens and you're responding to it, that disparity in the recovery is what leaves a group of people behind. And that's an example of structural racism. We have to name it and then be very intentional in trying to improve it. So that's where we're at.

And the last thing I want to mention about just this topic is that at CDPH we're also focusing on the internal transformation. Our belief is that we have to recruit a more diverse workforce. We have to work with our workforce in being able to transform our staff and work with the communities in their transformation. It's always an internal and an external because that's how the transformations are going to be long lasting in institutions. If we don't do that, they're not going to last.

Yes, thank you so very much for that answer and for this report and for your time. So seeing that there is no one else on the dais to ask any questions, I'm going to open it up to any public comment from any Members of the audience.

You will have 1 minute.

Thank you. Madam Chair, Rand Martin here. On behalf of the AIDS Healthcare Foundation, I just wanted to acknowledge and thank you for raising the question about Syphilis. AHF, not only being a leader on HIV care and treatment, is also a leader on STD prevention and control, particularly concerned about the rise in Syphilis rates. In fact, have legislation this year that you'll see later that tries to deal with it. There are many solutions that we need to try.

We need more funding, definitely into STD prevention and control, because it's not just syphilis that's going up, it's also gonorrhea and chlamydia. But the worst of it all is the congenital syphilis, where we've seen a rise from 33 cases in 2012 to 525 cases in 2021. That's an outrageous rise and really harmful because so many of those lead to newborn deaths and stillborn. One of the solutions that we advocate is education and getting to people who are at risk of being exposed to syphilis.

We did this 10 years ago with HIV, where we sponsored legislation that requires an offer of an HIV test every time somebody comes into a public health clinic. We saw a reduction from 2013, when that Bill was enacted, to today in HIV every single year subsequent. Not taking all the credit. There are a lot of factors at play, but education and getting to people and making sure they're aware is important. It's just as important for people who are exposed or potentially exposed to syphilis. We hope more of that will happen in the very near future if we're going to turn this around. Thank you very much.

Thank you. All right, seeing no more public comment, I want to thank you again, Dr. Aragon and the Department for this excellent report and for your time. Thank you. Our second issue is an overview of the proposed CDPH budget. We will have Brandon Nunes, Chief Deputy Director of operations at CDPH, and Julie Nagagaso..., sorry, Deputy Director of the Office of Policy and Planning at CDPH. We also have Department of Finance here, and LAO, I believe. Whenever you're ready.

Thank you, Madam Chair. Brandon Nunes, Chief Deputy Director for operations at the Department. This agenda item has asked me to do an overview of our budget, so I'll provide a brief kind of overview of that and kind of give you a framing for a lot of the things we'll actually be discussing later on today's agenda.

But as it relates to our department's Governor's Budget proposal, the Department proposes a total budget of 5,815,000,000 of that coming from General Fund, 2.2 billion from federal Fund sources, as well as 2 billion from approximately 50 special funds that Department administers. Some of the things that are highlighted in our budget this year, particularly items that are used to kind of address the budget shortfall this year, is we do have some General Fund savings amounts.

A couple of them that we'll be talking about today are related to $900,000 General Fund beginning in current year and ongoing for a shift that we're going to do of the Covid-19 website to start hosting it on the CDPH platform. We are flagging 1.7 million in General Fund savings on a one time basis. These are anticipated savings that we have in our it area that are just going to kind of be natural savings from salary savings and things like that.

And then we have a $3.1 million General Fund one time reduction for 2324. This is for the climate and health surveillance program. And these again are just anticipated savings that we have within the program. So we're scoring them here towards to address the General Fund situation. We do have a couple of items that are related to Fund shifts.

We have a $4 million proposal to shift funding that was originally going to be funded with General Fund to the skilled nursing facility, special Fund for skilled nursing facility staffing audits. So we'll just have a different Fund source for that particular item as well as in both current year and budget year, there's going to be a $9.7 million is proposed to shift from the General Fund to our Prop 56 tobacco funds to support clinical dental rotation.

So again the program remains whole, but just a funding shift there. And then finally we have one item that constitutes a loan to the General Fund. The Governor's Budget proposes a 500 $1.0 million loan from our ADAP Rebate Fund to the General Fund. It's anticipated that this won't have any program services impacts as there's still going to be a sufficient Fund Reserve to maintain services within the program. So just a loan to the General Fund there.

And then like most years, we have various adjustments in the budget related to our various tobacco tax items in Prop 56 and Prop 99, rather about a $4.1 million net increase across those accounts. And then you'll hear some discussion today about changes from our AIDS drug assistance program, our WIC program and our GDSP program.

And then finally, and this is kind of one of the other things that I was going to highlight, and this kind of relates to your first question in the agenda, the Governor's Budget, you'll definitely see that it reflects a projected roughly $700 million change from current year to budget year.

You may look at this and think that that's a large reduction, but in fact, it really is natural carryover items, one time investments in the Department that were naturally going to come off in the 24-25 fiscal year. So they're not actually a reduction. It's anticipated in the budget plan that these would be reduced. And about 500 million of that is related to these carryovers that I mentioned.

One of the big areas for this, and we'll be talking about it in a little bit here, is related to our future public health. We're on the third year of investments of 300 million to 100 million to the Department and 200 million to locals for future public health funding. The first year we received that, we had two years to spend those dollars. And so a big portion of this carryover, roughly 240,000,000 of that is this reduction amount, because we won't be seeing that in 24-25.

And then there were some one time dollars, about 100 and 7180 million that was coming out for Covid dollars that we don't need anymore from the General Fund. So that kind of explains and your agenda does a great job also of kind of highlighting what those changes were. So that's in there as well. And then as far as future public health, the $300 million is still in there again for 2425 as I mentioned, for the third year. You did have some questions in the agenda. I brought my colleague Julian Agasaka to address some of those. If now is a good time for that, we can get into it.

Okay, sounds good. Great.

Chair Weber. My name is Julie Nagasako I'm the Deputy Director of the Office of Policy and Planning, and I'm here to provide a brief update about the impact of the future of public health funds that were allocated to state and local public health workforce and programs.

We're currently in the second year of funding, and so the purpose of the landmark future of public health investment is to strengthen and transform California's public health system, addressing critical gaps in core infrastructure, growing a skilled representative and well supported workforce, increasing preparedness and resilience, building and improving systems, contributing to equity, and protecting and improving the health of communities throughout the state.

These objectives are achieved through initiatives addressing priorities, addressing the foundational public health services that are critical to strengthening and sustaining our state's public health infrastructure. Most significantly, in the first two years, these resources have enabled an important expansion of the public health workforce, the heart of our public health system. CDPH and local health jurisdictions have hired over 1200 new public health staff at the state and local level.

At the state level, over 300 positions, 74% of planned hires, have expanded public health workforce capacity to support both program and operational activities. Key projects have also focused on workforce development, increasing our HR staffing, launching a new hiring system, expanding marketing and pipeline efforts to promote careers in public health. CDPH has also developed a new public health core competencies system with modular public health trainings and a career management program to help support development of our professional public health state service.

The Department has also established new structures, including the Office of Policy and Planning, which supports priority initiatives across the Department, as well as our new regional public health office to support local health jurisdictions with key projects and bi directional coordination. CDPH is leveraging the future of public health resources to improve emergency preparedness and response capabilities. Examples include establishing a dedicated recovery unit expanding planning, training, exercise, and evaluation capabilities developing a 24/7 intelligence hub, and improving state laboratory emergency response support.

Other key improvement initiatives on core public health functions include it and data science, such as expansion of coverage for the California birth defects monitoring program communications, including a communication strategy, as well as increased digital, linguistically, and culturally responsive communications and a community partnership and inclusion strategy with dedicated community engagement personnel and population focused advisory committees. All of these workforce and systems improvements contribute to the broader goal of community health improvement.

Additional strategies focused on advancing life course equity and prevention include strengthening our partnerships with health systems, health plans, and local communities, developing a planning guide for state and local public health to inform public health financing strategies. Projects addressing key health improvement priorities such as behavioral health through a departmentwide effort, increased staffing and developing a framework for prevention, as well as enhancements to the state health assessment and improvement planning functions, including the inaugural State of public Health report released this year.

At the local level, requirements include that at least 70% of funds be dedicated to support the hiring of permanent staff. Lhjs have made strong progress on hiring. Over 900 positions have been filled in jurisdictions across the state, reflecting 74% of planned hires. Ultimately, future of public health will be adding a total of 1200 positions to the local public health system. Highlights so far include over 90 epidemiologists, 100 public health physicians and nurses, and 140 community health workers.

Additionally, over 500 staff have been hired in roles that include a focus on addressing health disparities and equity. Staff are focused in many program areas, including chronic disease, infectious disease Administration, public health laboratories, environmental and family health, and preparedness, with staffing priorities identified based on the needs of each local health jurisdiction. All 61 local health jurisdictions have now submitted threeyear work plans which identify strategies and evaluation approaches as well as key areas of focus informed by priorities in their local community health improvement and strategic plans.

A summary of these work plans is being developed and will be posted publicly by the end of March. The future of public health implementation framework supports both alignment and flexibility. The availability of sustainable, noncategorical funding in public health infrastructure enables local health jurisdictions to address issues that are relevant and meaningful to their community needs, while also contributing to collective impact and addressing key gaps in the governmental public health system.

The first two years of public health allocation included carryover authority to allow for ramp up of infrastructure and hiring while building towards full implementation. Over these first two years for state operations, CDPH has been monitoring spending and allocating any available unspent carryover funds, such as salary savings, to address priority activities in alignment with the identified foundational public health service areas in order to effectively absorb the funds with a minimum of funding unspent for local assistance.

Progress on local health jurisdiction expenditures has been monitored through their submission of local expenditure and progress reports, and lhjs have made significant progress in spending. Projections of local expenditures show that a large percentage of funds will be expended and we estimate that there will be a small percentage of funds unspent. This has been a very high level update about the accomplishments to date and plans going forward, and we plan to continue to keep the Legislature updated about milestones with this investment.

This investment would not have been possible without the collaboration and support of the Assembly and Senate budget committees and staff. We're truly grateful for the ongoing partnership. Be happy to address any questions from the Committee or receive any follow up after the hearing. Thank you.

Thank you. Department of Finance

Good afternoon, Madam Chair. Nick Mills, Department of Finance nothing further to add.

Thank you LAO good afternoon.

Will Owens with the Legislative Analyst Office. Some of our comments are on specific proposals, so we'll be ready to address those when they come up.

Okay, thank you. Okay, well, thank you both for being here. Just a couple of questions. You spoke about the requirement of the three year work plan from the local jurisdictions. What is the requirement as far as within those three years, any follow up, any specific check ins that they will be reporting to you all?

Yeah, absolutely. So there's quarterly progress reporting that they share in terms of the progress of both their expenditures and their hiring, as well as meeting the objectives identified in their work plans on the specific metrics for the issue areas that they will be working on.

Thank you. And when deciding how to spend the 100 million. Did you consider core programs that are currently underfunded, such as our California Cancer registry?

So the future of public health investment at the state operations. So the 100 million at the state level absolutely does reinforce programs across the Department. There's a whole foundational service area that's specific to workforce, where we're adding additional staffing in the current year. We have used some of the salary savings to provide an augmentation to support the California Cancer registry shortfall for this year.

So I guess my question is, is there a metric, a priority, given to programs that we already have? I was just using that as an example that may be underfunded.

I think that it's a combination of trying to augment existing programs as well as to invest in areas that we've never had a funding stream to address core public health functions. We're really using that foundational public health services model to look at what is governmental public health's responsibility, and then what are the areas we might need to shore up in order to be able to respond to that fully.

Thank you. I will now turn to see if there's any public comment.

Good afternoon. Michelle Gibbons with the County Health Executives Association of California. Just wanted to remark around the future of public health funds. Since we represent the local health departments, those funds have been instrumental. I just can anecdotally tell you many stories that were submitted to us around rebuilding our laboratory capacity, being able to address chronic disease prevention, where before there was limited term funding to do that, also adding to our infectious disease investigations and things like that.

And so it has been tremendously instrumental in rebuilding what our local health departments. I do want to just mention that this was not shiny funding to do brand new, shiny things. It was because our public health infrastructure had been decimated at some point, and we just needed the funds to be able to redo that.

So the 1200 positions being added into local health departments, that was staff that was much needed, staff that had work readily waiting for them to be able to address a lot of the things that we see across the state. So we want to thank the Legislature for that, and we hope that those funds could be protected as we go through this tough budget climate. Thank you.

Thank you. All right, we'll seeing no other comments. Thank you so much for being here. We will now move to our third panel, and our third issue covers it, issues including four proposals from the Administration, as well as one oversight issue. We will begin with Assemblymember Dr. Wood, who is here to talk about Cal Connect. We will then go to Adrian Barraza, Assistant Deputy Director for Center for Infectious Disease CDPH. Then we will go with John Roussel, chief information officer for Information Technology Services Division. And finally, Michelle Gibbons, the Executive Director, County Health Executive Association of.\ California. Dr. Wood.

Thank you, Madam Chair. Good afternoon, Madam Chair and Members, I'm here to speak in support of continuing funding for the calconnect system. I've heard from the counties I represent that they have used the calconnect system and found it to improve efficiency and effectiveness. They currently utilize Calconnect for Covid, Mpox, avian flu, and Ebola Marburg, and look forward to using it for HIV, syphilis, tuberculosis in the near future.

In addition, if our local community had ever had a large exposure to a vaccine preventable disease such as measles, their public health teams would use Cal connect for tracking of contacts. They have used this since some census inception during Covid-19 to not only track Covid cases, but to support their need with dynamic and modern capabilities to identify cases and expose contacts and mitigate the spread of infectious disease.

They've told me that prior to the calconnect system being established, they were using manual spreadsheets, Excel spreadsheets, to gather data, as I often do. In my testimony, I point out that rural communities are different. They often have limited staff, and that any system allowing them to be more efficient and more effective in collecting data is important and worthy of financial support.

I'm here to request that the Assembly Budget Subcommitee one on Health and Human Services recommend that this program, which requires $33.5 million to continue its important public health work, be allowed to continue. I look forward to reviewing any and all possibilities of funding of this important program, including the allocation of existing funding within the California Department of Health of Public Health. The Covid-19 pandemic, as tragic as it has been, did result in innovations in many industries.

We have seen the benefits of these improvements and enhancements, such as Cal connect, and states should continue to support it. I fear we go backwards otherwise, and I would ask this to me feels like one of those classic pennywise and potentially pound foolish cuts. I don't know how you measure the amount of disease that happens if you can't track it, how you manage the pain and suffering that goes along with that and monetize that.

So I'm anxious to hear how the Department of Finance justifies cutting a disease surveillance program that many counties, especially small counties, have come to rely on to improve disease surveillance and protect people from those diseases. Thank you.

Thank you. Next, I'm sorry, can you push your.

Center for Infectious Diseases? Thank you for that. So the California Department of Public Health is requesting 26.9 million in General Fund in 2425 for maintenance and operations support of the surveillance and public health information reporting and exchange, or the Sapphire system. The Sapphire system is a gateway for receiving electronic lab data and electronic case reporting for CDPH.

This data system evolved out of the previous statewide IT platform, the California Covid reporting system, which was developed in 2020 to increase statewide capacity to manage extremely high volumes of Covid-19 laboratory data and pandemic response efforts when the prior gateway was not able to handle the volume. Sapphire functionality allows for receiving public health data for all reportable conditions, not just Covid-19, including infectious diseases such as tuberculosis, measles, HIV, syphilis and mpox.

Previous budget acts have funded the sapphire system up to the current fiscal year, and additional expenditure authority is needed to continue operation of the sapphire system in 2425. Continued maintenance and operations support of the sapphire system is needed to maintain a timely and accurate statewide health information exchange system for effective public health surveillance and disease outbreak response, as well as comply with federal health information data technology requirements. Thank you.

Thank you. We'll move on to John Roussel.

Proposal number three, the Covid-19 website. After June 2024, Covid-19.CA.gov URL will be redirected to the CDPH hosted site. Communication has been provided to the governor's office and local health jurisdictions for the migration of the CDPH site. We worked with the governor's office, who provided us with the approval for this move. We expect minimal to no user changes as we move forward.

Thank you. And we will go to Michelle Gibbons.

Thank you. Good afternoon, I'm Michelle Gibbons with the County Health Executives Association of. California. We represent the local health departments. 55 of them use calconnect, and they're deeply concerned about the lack of funding being provided in the budget to maintain the system. I won't restate everything, but as Dr. Wood mentioned, local health departments did rely on manual processes. They would pick up the phone, call somebody and say, hey, who are your close contacts?

They would ask for their phone numbers, they would put the phone numbers in the spreadsheet, and then they would start the calling all over again. And what calconnect did is it allowed this to be automated and allowed for us to broadly share information just across disease programs internally and also with other local health departments in CDPH. In terms of calconnect, it's just more streamlined, efficient and coordinated. Local health departments have been excited with CDPH's efforts to expand calconnect to other diseases.

And we heard about the rise in Syphilis this summer. The expansion is supposed to include stis and HIV, so it would be a travesty to not allow the system to continue moving forward. This is why CHIAC and the Health Officers Association of California HOAC have also made this one of our priorities. We understand that there's a trying budget climate ahead of us. We would just, as Dr. Wood mentioned, ask for us to look under the couch cushions, as we often do within public health.

A colleague of mine let me know about a New York Times article that said the cycle of funding public health is neglect, panic, repeat. I worry that we're entering into that cycle again, and we're going to neglect systems that have been tremendously helpful for our local health jurisdictions. So we just ask that funding be dedicated to maintain the system quickly.

I will just mention that under the administration's syndromeic surveillance proposal, I just want to mention that while CHIAC does not have concerns with the goal or the intent, local health departments also have syndromeic surveillance systems. And we want to ensure that we are coordinated and we are not subbing one system out for the other and eliminating the ability for local health departments to get the real time information so that we can respond on the grounds as well. We're working with the Department to better understand how to do that, and just wanted to let you know about that as well. Thank you.

Thank you. Anything from the Department of Finance?

I will just note about CalConnect. I know we've had some comments about CalConnect. The discontinuance of funding for CalConnect was one of the tough decisions that we needed to make in the Governor's Budget due to the deficit. And I just wanted to note a concern about the proposal to restore general fund funding for CalConnect.

Finance is concerned about the availability of resources to fund the operation and expansion of CalConnect to additional reportable conditions, and notes that the department is looking into existing resources to fund the core operations and maintenance of the system.

Any comments from LAO?

Will Owens with the LAO. So, regarding the CalConnect and the Sapphire funding, our office has recently released a report that showed that the revenue outlook and the budget condition is expected to be worse than what is currently in the Governor's Budget. So that being said, any additional General Fund spending proposed in the budget or to be on top of the budget wouldn't need to result in subsequent General Fund savings elsewhere.

That being said, to the extent that these systems are a priority for the Legislature, our office has worked to identify recent one time and temporary spending that could be used to offset the funding for these programs that are higher priority for the Legislature. And we are available to work with the committee to identify those and work on those. Thank you.

Thank you. And is there anyone here from CDPH that could actually speak to CalConnect?

I can speak on CalConnect if there are questions.

Yeah. Thank you. All right, so we'll start with that one. Can you please give a brief historical perspective of CalConnect? What was its purpose? What did we find? Has it helped?

I think we can say that it's helped tremendously. Current utilization remains very high. There are 55 local health districts that continue to use CalConnect. It really developed out of a necessity during the COVID-19 response to really provide robust contact tracing and disease investigation tools.

And as Assemblymember Wood mentioned, it's a resource that's proved invaluable and has really allowed us to steer away from really antiquated disease investigation techniques, relying on paper, clipboard, pen.

So it's really been a valuable investment for the department and one that we're continuing to internally look for additional funding to continue to support. We're looking across various funding streams in the department. We do only have maintenance and operations support, as I mentioned, to last for the current year.

What that means from a capability perspective, if we're not able to provide ongoing maintenance and operation support for the CalConnect system is that that will mean that there's less ability for local health districts to investigate and respond to reported infectious disease outbreaks.

This includes a loss of system that provides automated symptom monitoring for persons exposed to infectious diseases like avian flu and Ebola. Loss of tools that increase local health districts ability to track and prioritize contacts and cases for intervention to prevent disease and stop spread.

For example, for some diseases like measles and hepatitis A, an antibiotic or a vaccine, or an antibody can be given to prevent infection after exposure if done within a specific time frame. So timeliness is really the key to disease investigation, and that's something that CalConnect helps us achieve.

Thank you. Would you say that the formation implementation of CalConnect save lives?

I think we can lead to that conclusion.

Do you think that the ability to trace and contact individuals that may have come in contact with someone with a communicable disease, do you think that maybe decreased hospitalizations?

Absolutely. It leads to earlier interventions.

Would that decrease overall cost to our healthcare system?

One can make that connection.

So it may not necessarily be viewed as an expense, but a cost saving measure, including the cost of saving lives.

I don't think we've done any research to prove that, but I don't think it's far-reaching to say that there is a direct connection.

So, I do have a question for the Department of Finance on this particular issue. Understanding that we are in a very interesting place with our overall budget this year was the thought that we would not have another COVID-like pandemic in the future.

Part of the rationale is just the acknowledgment that the COVID pandemic is winding down as our contact tracing activities. And due to multiple competing priorities, this was one that was identified to discontinue. We also recognize that there are other systems, such as Sapphire, which continue to be available to collect lab reports and other data that is also useful for containing infectious diseases.

So the department of the thought process is that COVID is the only type of virus infection out there that we will encounter that could essentially decimate our communities like we've had. Not that this is the first of many to come.

No. We acknowledge that there are other reportable diseases that the system would address.

And how expensive would it be to restart it if we shut it down?

I deferred to the Department.

I don't have implementation figures in front of me.

Anybody?

We'll have to look into that and get back to you.

Matt Aguilera, Department of Finance. Yeah, just to add to what my colleague said, the Department is looking within their base resources to see what they can do in terms of maintaining this system. So, we're still working through that aspect of this proposal.

Okay. Assemblymember Dr. Wood.

Thank you, Dr. Weber. I just have a question, maybe from the Department of Public Health. The standup of CalConnect didn't happen instantly. So if the funding for CalConnect goes away, and I don't know, honestly how long it took to stand it up, but it was an instant, and it was expensive, and it was in the middle of the COVID pandemic.

I remember being on calls with Department of Public Health, the Department of Healthcare Services, asking about data when CalConnect was being developed.

So it would be nice to know what it costs to stand it up, how long that took. And when you talk about disease and the rapid spread that we experience with COVID, we don't know what the next potential pandemic is. We don't know what we heard earlier, Dr. Aragon, talking about the uptick in Syphilis. We're seeing that all over the place in the state and a variety of things.

Once again, CalConnect can be used to help trace those outbreaks and hopefully minimize them through education, which I heard very clearly was one of the best ways to do so. I'd like to know how much it costs to stand it up, how long it took.

Because if we disband this and have to stand it up again, how much does that cost our health care system? How many lives are potentially affected or lost because we decided to go backwards...decided to go backwards. Thank you.

And we're more than happy to report back on that.

Yes, if both the Department and the Department of Finance can give us that information. And I could not agree more with Assemblymember Dr. Wood. It seems like this proposal would be a huge step backwards. We know how devastating and expensive COVID was and continues to be. It's not like it's over. It's not like people still aren't getting notifications that they have been around someone that recently tested positive.

But as was stated, we're seeing uptick in other infections that could be treated preventatively or if you get in contact with people and let them know that they may not even get it at all. So I'm a little confused as to the rationale to not continue to fund this program. We will continue to have conversations around this and see where we can possibly land.

But I think it would be a huge mistake from the state and not necessarily looking out for the overall best interest of our residents to dismantle this program, which really is life saving and at the end of the day, also cost savings to our overall health care system. So thank you for that. The other thing on the agenda I did not hear someone talk about is the fifth proposal.

So, I'll cover that: Syndromic Surveillance Trailer Bill Language. California currently does not have a comprehensive, statewide, near real-time capability to identify and analyze emerging public health threats.

California is currently behind other states in adopting syndromic surveillance. 24% of hospitals with emergency departments in California submit data to Biosense through local arrangements, compared to 78% of hospitals with emergency departments across the country. Our proposed plan is to stand up a statewide syndromic surveillance program in California to enhance real time, widespread monitoring of public health.

This translates to more informed, rapid, and targeted public health action for disease controlled prevention and heightened situational awareness to facilitate more effective, prepared, and responsive public health strategies and policy development. CDPH will stand up a statewide syndromic surveillance and become the California statewide administrator for the Biosense platform.

The Biosense platform is a free, cloud-based computing environment hosted by CDC's National Syndromic Surveillance program. The system collects, analyzes, and shares electronic patient encounter data received from emergency departments within 24 hours of a patient's initial encounter.

The TBO gives CDPH the explicit authority to collect syndromic surveillance data and to require hospitals with emergency departments to submit data to the syndromic surveillance system. If there are any questions, I'd be happy to answer those.

Thank you so much for that presentation. Now, my understanding is that the funding for this is already in place.

Correct. It was part of the future of Public Health funding.

Okay, so my question is, why would this go in the budget and not through Policy Committee?

Yeah, so I think we were drawing back to the correlation to the funding received through futures of public health and wanted it to follow the same approval of chain and provide material implementation updates to those who were in the review channel for the futures of public health funding.

Yeah, so this, to me as I was looking through it, is definitely a necessary thing that we should have. However, it seems like it's something that should probably go through Policy Committee, ensure that we're not missing anything, that we're not making any mishaps in its rollout and implementation going through Policy Committee, making sure that we're not overstepping our bounds. And so we'll continue to have conversations but that is definitely something that jumped out to me since this isn't asking for money because you have the money.

It's just about creating this program, which is more policy and should maybe be a legislative bill instead of going into the budget. So thank you for presenting that. At this point, I will open it up for public comment. Each individual will have 1 minute. Thank you.

Thank you. Kat DeBurgh with the Health Officers Association of California in support of the CalConnect program. Nothing to add to the excellent comments of my colleague, Ms. Givens, you, Dr. Weber and Dr. Wood. Thank you so much.

Thank you.

Dr. Weber, Bruce Palmer with the California Association of Public Health Lab Directors, in line with CHEAC, the County Health Execs, and HOAC, the Health Officers Association in strong support of CalConnect. Speed of response is everything with this, and CalConnect allows us to respond quickly, and that makes all the difference in terms of the level of morbidity and mortality. Thank you so much.

Thank you.

Good afternoon, Dr. Weber. I just wanted to confirm, are we doing public comment on only I.T systems?

We're doing public comment on all of issue number three.

Okay, so seven is not yet. I'll wait. Thank you.

Nope, not yet. Okay. Seeing no further public comments, I want to thank everyone for your participation, and we will move to our next panel, which is issue number four.

Our fourth issue covers two proposals and two oversight issues that fall under the Center for Healthy Communities. Our first speaker is Maria Ochoa, Assistant Deputy Director, the Center for Healthy Communities. And after Maria, we will have Joan, I'm going to have you pronounce your last name. I apologize. He's a patient advocate, but we will have you begin. Thank you.

Hear me? Good afternoon, Madam Chair. My name is Maria Ochoa, one of the Assistant Deputy Director over operations in the Center for Healthy Communities. And the first item that I will talk about is the clinical dental rotations fund shift and Trailer Bill.

So the Budget Act of 2022 appropriated 10 million in a one time investment for the Office of Oral Health in consultation with the California Dental Association, California Dental schools, and other stakeholders to support the establishment of a community-based clinical education rotation for dental students in their final year, or dental residents.

The 2024-25 Governor's budget proposes to shift 9.7 million of this investment from the general fund to the Proposition 56 state dental program account to address the budget shortfall.

The 2022 Budget Act included programmatic and provisional language that once stated that funds were available for encumbrance or expenditure until June 30, 2027, provided a public contract code exemption established program eligibility criteria and specified reporting requirements.

Because Prop. 56 is not subject to an appropriation in the Budget Act, statutory changes to the health and safety code are added to maintain the programmatic requirements that were established in the provisional language and the 2022 Budget Act. The proposed changes will allow the department to continue program implementation.

CDPH will be required to provide a legislative report on July 1, 2027, on specified outcomes, including the number of underserved children and adults served by students and residents, the number of student and resident trainees, and the proportion of participating students and residents who express interest in working in a designated dental health professional shortage area.

Thank you. And did you have any other comments on any of the other proposals?

I'm providing all the updates on the proposals.

Okay. Oh, you can go?

Okay.

Yeah, just go ahead and go through all the proposals before we switch over.

All right. The second item is the State Dental Program Proposition 56 funding. So the Governor's Budget reflects a decrease of 7.54 million in state dental program account, including a decrease of 1.84 in state operations and a decrease of 5.72 in local assistance as a result of the updated Proposition 56 revenue projections.

The funds are used for the state dental program for the purpose and goal of educating about preventing and treating dental diseases, including dental diseases caused by the use of cigarettes and other tobacco products.

And then there was a question. Did you want me to address the question now? So there was a question that the Governor's Budget fails to meet the statutory requirement of 30 million in flat funding for the state dental program and asked that CDPH confirm and clarify the budget for the dental program. And so CDPH can confirm that the state dental program will have 30 million available for fiscal year 24-25.

So we will be in compliance?

Yes.

Okay, thank you.

And then the next item is the California Cancer Registry Oversight funding updates. So CDPH has experienced a decline in California Cancer Registry funding over the past decade, and originally anticipated a deficit of 1.9 million in fiscal year 24/25 including Prop 99 reduction of 239,000. CDPH will be shifting 481,000 and Prop. 99 dollars to the Cancer Registry that was previously provided to our Environmental Health Investigations Branch and used to fund approximately 1.5 FTE.

So our Environmental Health Investigations Branch has been planning to shift the funding from Prop 99 to General Fund through solutions such as salary savings, reduced training, supplies. So this shift will bring the deficit to just over 1.4 million. As a result of reduced funding from Prop 99 and Breast Cancer Research Account, the CCR has used several short-term solutions to minimize funding reductions in recent years, including onetime increases from state funds, CDC carry forward and future of health one-time funding. CDPH has not identified a source to absorb the anticipated 1.4 million in 24/25, so should additional funding not be made available, the CCR will lose approximately six contract staff, with about half of those at the central registry and half at the regional registries. Losses will result in reduced data quality, particularly data on underserved populations and those experiencing disparities, and result in a failure to meet federal data quality requirements.

In addition to the research funding noted above, this threatens up to approximately 18.5 million in federal cancer funding as part or all of the funds can be withdrawn based on a combination of a) regional inability to meet federal matching requirements, and b) not meeting our federal grant requirements. CDPH has developed a proposal to split the deficit should we not find additional resources.

This may be modified based on an ongoing impact assessment the state is performing to ensure funding reductions result in minimal failure to meet federal performance requirements. CDPH has been pursuing additional efficiencies and has engaged our Lean Transformation Office in collaboration looking for additional efficiencies. CDPH is collaborating with implementation partners to identify nonessential processes and cost.

CDPH is looking to convert to a contract agreement mechanism with partners when the new contract cycle starts in fiscal year 25/26, and this can allow CDPH to require detailed information on registry processes to identify nonessential processes. In the new contract cycle, CDPH will also negotiate lower indirect cost agreements with contractors, resulting in cost savings. And then the last item is the sickle cell.

So, as provided in the Budget Act of 2019, CDPH received a one-time 15 million allocation to establish a network of sickle cell disease centers in the local health jurisdictions of Alameda, Fresno, Kern, Los Angeles, Sacramento, San Bernardino and San Diego to provide access to specialty care and improve quality of care for adults with sickle cell disease, support workforce expansion for coordinated health services, conduct surveillance to monitor disease incidents, prevalence and other metrics, create a public awareness campaign and provide fiscal oversight of the resources.

Of these funds,14,000,340 in local assistance was paid by direct allocation to the Center for Comprehensive Care and Diagnosis of Inherited Blood Disorders, 600,000 to the Public Health Institute, and CDPH received 60,000 for administrative activities to allocate funds to the Public Health Institute in support of sickle cell disease surveillance and monitoring activities through public health institutes tracking California to Networking California for Sickle Cell Care. By September 2022, the Center for Inherited Blood Disorders was required to submit an annual progress report to CDPH with a final summary report which was completed in October 2023. After three years, the impact of the work totaled 12 clinics and over 1000 patients enrolled in comprehensive, teen-centered clinics.

Currently Networking California for Sickle Cell Care is trying to find a sustainable model now with DHCS or Population Health in order to fit in with the new CalAIM vision, since funding will be depleted in June. Thank you.

Thank you. We're ready when you are.

Hello. I'm Joan Venticinque, a patient advocate, and I'm here to speak in support of the California Cancer Registry, a vital resource for research to treat, cure, and prevent cancer, that is under threat due to funding cuts. I was 40 when I was first diagnosed with breast cancer. It was caught very early and easily treatable. Five years later, I was diagnosed with a second primary breast cancer.

This was much more serious, and after six surgeries and a year of active treatment, I had to live with the knowledge that this cancer could come back. I have no family history of cancer and I had no gene mutations for cancer risk. Yet here I was, and this is a position so many people find themselves in. When I asked my physicians why I got cancer, their answer was, "we don't know."

I'm sure individuals in this room, either personally or with their family and friends, have asked this "why" question and received that same answer, "we don't know." Well, I'll probably never know why I got cancer. What I do know is that the data from my cancer diagnosis in the California Cancer Registry contributes to the research that is looking for those answers and helping to save lives. The California Cancer Registry is mandated by law to track every cancer that occurs in California.

The CCR is exceptional in that it leaves no one out, whatever their age, race, ethnicity, gender, income, education, or other characteristics. Every patient's cancer journey is recorded, so the data in that registry is not merely numbers, but the lived experience of millions of Californians. The CCR serves as an essential backbone that anchors other data sources for cancer research, allowing us to see the scope of the cancer burden, who is getting cancer, and who is at the highest risk.

And the data is also crucial in understanding why cancer rates and outcomes differ by racial, ethnic, and population groups and how we can improve health equity. The CCR is funded through a blend of state and federal resources, with most funding provided through the National Cancer Institute SEER program to our three regional cancer registries. Those federal funds require a 20% match. For decades, California has relied on funding from the Prop. 99 California tobacco tax for that state's share.

Unfortunately, declining tobacco tax revenues means that California will be unable to maintain its share, cost or cost share. The Department of Public Health estimates that the program would need an additional 1.9 million just to maintain flat funding for 2024/25. California risks losing $18.5 million yearly in federal funds. This loss would devastate the CCR and its regional registries. Without a funding support from SEER, the CCR in its current form would come to an end.

So I urge the Assembly Budget Committee to protect this vital resource for California and take decisive action in this year's state budget to protect the CCR and its regional registries. With an investment of $7 million. It's important to give our state's clinicians, scientists the resources they need to advance clinical, epidemiological, and health systems research to continue to save lives, and so that someday none of us has to ask the question of why we got cancer. So I thank you for your time and consideration.

Thank you. Thank you so much for being here and sharing your story. Anything from the Department of Finance?

Good afternoon, Madam Chair. Nick Mills, Department of Finance. On issue two, to echo some of Director Ochoa's comments, the Governor's Budget maintains $30 million for the Office of Oral Health, and this fulfills statutory requirements. On issue three, the Administration will continue to evaluate ongoing costs associated with the Cancer Registry and how to best address future projected declines in revenue.

LAO.

Thank you. So, on the first, second and fourth proposals on the dental programs as well as the sickle cell centers, we have nothing further to add, but are available for questions. Regarding the third proposal touching on the California Cancer Registry, just like to echo our earlier comments on given the state's budget condition, that additional General Fund savings will need to be found in order to fund maybe this, as well as some of the other Legislature's priorities.

That being said, our office has identified one-time and temporary spending as well as additional budget solutions, and are ready to work with the Committee Fund, the priorities that it has. Thank you.

Thank you. I have a couple of questions about the California Cancer Registry. In our report, it says that the collection of data is behind about an average of one and a half to two years. Why is this the case?

I have confirmed with program that this is a standard process. So even if we were fully staffed and we found additional resources to keep the registry whole, that is an additional time frame. I mean, that is the approximate time frame that it does take for them to process the data.

Why?

Mark Damesyn, he's the Chief over the Cancer Registry. He can help with this.

Thank you. And thank you, Chair Weber. The reason for the delay is a long process that happens, the initial reports come from laboratories and doctors' offices. There is a long adjudication and a very strict process of quality control, which is dictated by the feds, the Federal Government, and we must meet those quality metrics in order for our data to be used.

Thank you. And is it true that our registry is one of the largest in the nation?

Thank you. Yes, it is. Of states that is the largest.

Oh, it is the largest. And so if we don't, from a state, continue to find funding, then we'll lose that federal funding as well?

As Ms. Ochoa said, it is at risk. The 18.5 million is at risk if we are not able to meet those, to both meet the federal matching requirements, as well as continue to have the quality of a registry to meet the quality standards.

And what is the outcome of having a quality registry? Like, what does that do to the everyday Californian's life?

I think I want to point to health equity because the more difficult cases to get and the more difficult quality to meet allows us to then is, happening in those harder to reach populations, which tend to be the populations who also have a disparity happening. And so that's the outcome, is we are less able to promote health equity and meet the needs of every Californian.

So, in general terms, if we no longer had this registry, what would be the impact on these communities and our residents?

The impact would be essentially not knowing where the problems are, et cetera. I don't know. Maria, did you want to comment to that?

You're fine, Mark. Go ahead.

Oh, thank you. There's actually many layers of impact because of the ways that the Cancer Registry Data is used. But at its most simple, it's like operating blind on a very, very important killer in this state, and one that impacts many, many lives, even for those who are living with the condition.

There's many programs that are working at all areas of what we call the cancer control continuum, from prevention to diagnosis--of course, when it is as early as possible--to getting into treatment, and then what we call survivorship. Many, many areas where intervention is happening without the Cancer Registry's valuable data and highest quality of data, those efforts are operating without the information they need.

Thank you. Thank you for standing up. I also wanted to ask about your Sickle Cell Centers of Excellence. Understand that you had two reports in September of 2022 and October of 2023. Can you kind of give us a little bit more information on what have been the outcomes of funding these Sickle Cell Centers of Excellence?

So CDPH does not have the program. So we were working with the center, and from what I understand in the final report, they were able to help over 1000 patients. They had 12 different clinics enrolled, and they really, like with the surveillance and data that they provided through Public Health Institute, they were able to look at the availability and accuracy of the data that was available for sickle cell disease.

We just had improved visibility and utility of data that was provided and a lot of data sharing across the industries to support the decisions that were made in the report. But I would have to get more detailed information back for you.

Yes, if you could, please do that, because from my understanding was speaking with some of the advocates for this, that they were actually these centers and their relationships with communities and their ability to go out and educate, actually decrease the number of hospitalizations, decrease the number of sickle cell crises, decrease the number of patients needed to be on expensive medications.

And so if we no longer funded this, it would not only be very devastating and expensive to the community, but it would also impact with community trust. So if you could get that information, that would be very beneficial for our Committee. So just looking at proposals three and four.

From my understanding, and I'm looking forward to the further information that I receive, that these are programs that work, that significantly improve the lives of our residents. They decrease morbidity and mortality, overall decrease the cost of health care. Yet as a state, we are either underfunding them or there is no proposal to continue funding. So I am a little concerned about the inability for us to look at programs that evidence shows is working, evidence shows is saving lives and improving quality of lives.

And so we will continue in our conversations, but I am very concerned about the proposals from number three and four on the agenda. With that, we will turn it over to public comment. If anyone would like to speak, please come and use the microphone. You will have 1 minute. Thank you.

Madam Chair and Members. Autumn Ogden-Smith with the American Cancer Society Cancer Action Network. I wanted to thank the Department and Joan for their amazing presentations today, and I concur with everything that was said. I just wanted to add two things. The first is to your question about the delay, the two year delay. We currently have an unfended mandate, that's the electronic pathology. And if we can keep the CCR funded, then it is something that could help expedite or shorten the delay.

And that brings me to my second point, which is I realize that we have a big deficit this year, but this is a critical program and it needs to maintain its funding. So thank you so much.

Madam Chair Members. Matthew Marsom with Public Health Institute. I also want to add my strong support for the California Cancer Registry and urge that the Legislature secured the funding necessary to protect the program. We're grateful for the questions raised today and deeply appreciative of Joan's testimony, as well as the department's comments around the impact of the program. I also want to address the question that was raised around "what is the impact of this?"

And we know from speaking to researchers who use the data that the Cancer Registry Data is an invaluable resource for researchers, not just here in California, but across the globe, to inform the way in which treatments are working. And it has been used to also directly inform screenings for breast cancer, for example.

And we know that without the registry data, those efforts would be hampered and we would see a further impact upon new treatments that we hope one day will mean that cancer will actually be eliminated. So thank you so much. I want to make a comment about the sickle cell program.

As was mentioned, Public Health Institute has the privilege of administering the program, and we have an offer here, if we can be a resource to bring the program to meet with staff and members to answer questions that you may have about sickle cell program. So I'll make that offer. Thank you.

Madam Chair and Members. Nora Lynn with Children Now. We want to acknowledge the departments of Public Health and Finance saying that $30 million will be in the State Dental Program Account. And we would like to point out that according to the fund condition statements, it looked like the proposed adjusted beginning balance of 18.95 million for 24/25 appears to apply reserves gained from previous fiscal years as if they were revenue which is inconsistent with a continuous appropriation of $30 million mandated by AB 133.

The fund condition statements list 21.62 million for fiscal year 23/24 and 19.88 million proposed for 24/25. In total, this is a little more than 18.49 million short of the $30 million continuous appropriation to the State Dental Program Account. We encourage the Committee to ensure this funding. Thank you.

Thank you.

Good afternoon, Madam Chair. Jessica Moran with the California Dental Association, here to give comment on items number one and number two. Starting with number one, we support the department's trailer bill language to ensure the funding for the CB, clinical-based community education rotations for dental students. We really believe in this program. We have three schools that are contracted with 10 sites that are starting up this summer.

We really believe this is a great way to expose dental students to underserved areas, FQs, to really get them in the practice, the experience that they need, and then they can also return to those practice areas after graduation.

On issue number two, I want to echo the comments that Nora from Children Now made and also just say that we support the continuous funding of the Office of Oral Health and really believe in the initiatives that the Office of Oral Health puts out, and the continuous funding will allow them to continue to implement their state oral health plan. So, looking forward to continue to work in Legislature on both these issues. Thank you so much.

Thank you.

Good afternoon, Madam Chair. Tyler Aguilar, on behalf of the University of Southern California, home of one of the three regional cancer registries, and we're just requesting your full support and funding to maintain the registries. Thank you.

Thank you.

Michelle Gibbons with CHEAC. Just wanted to share a little bit more on the local oral health program. I want to align my comments with those that came before me. I think the challenge is it's a little hard to track. We see that there's about 19.8 million in the fund from Prop. 56. What we can't understand is how much of the General Fund is actually going back to backfill to get to the 30.

I have seen one estimate of only 4 million going in, but obviously to get to 30 million, it would need to be a lot higher. So we hope that we could work with your Committee and then also with the Department of Finance and others within the Administration to understand the exact amount of General Fund Dollars that's being added to get to the 30 million. Thank you.

Thank you. And since we have the Department of Finance here, would you like to address that?

Nick Mills, Department of Finance. The 4.6 million General Fund is in CDPH's General Fund, state operations item. I believe it's Provision 13. It specifies that there's $4.6 million for the Office of Oral Health. So that's where that figure is reflected in the budget.

I guess the question is exactly how much from the General Fund has been used to ensure that you get to that required 30 million.

So for 24/25 there is 25.4 million, Proposition 56, State Dental Program Account to support Office of Oral Health activities. And then when you add $4.6 million to that, that is a total of 30 million in funding.

So you're saying that there's 25.4 from Prop. 56?

That's correct. That is the Proposition 56 allocation for fiscal year 24/25. If you look at the fund condition statement, the total amount is 35.1. So the remainder of that is for the clinical dental rotations fund shift of 9.7 million.

Okay.

Thank you, Madam Chair. I think that's where the confusion comes for many of us. That amount that we're referencing around the 25 million, we see that for fiscal year 22/23. But in fiscal year 24/25 the amount is much smaller coming in from Prop. 56, it's 19.8.

And that's actually what I have in my information as well. 19.88 million for 24/25. So how much of the General Fund will then come in to help us get to that 30 million?

It will be 4.6 million, because in addition to the revenue coming in in 24/25 we are using unspent funds from past years to get to the 30 million.

And, Madam Chair, that would be the reserve amount. But our understanding of how that reads is that it's supposed to be what Prop. 56 allocates and then the General Fund backfills to get to the 30 million, irrespective of what the fund balance is.

Right. Because I think that's supposed to be 30 million every year. Right? So if you have 19, we'll just bump it up to 20, and then you've got 4.6. There's still that gap that's there that couldn't be filled by the reserves because this would be a new year.

You can get back to us on that because I think reading, even for myself, reading through this, was very confusing as to how we're getting 30 million new dollars every year, regardless of how much is left over from before. Okay. So, seeing that there are no more public comments, I want to thank everyone on the panel. Especially thank you for coming to give your story. And we are now going to move to issue number five and panel number five.

This covers the ADAP or ADAP estimate and proposed ADAP Rebate Fund Loan under the Center for Infectious Diseases. First we have Adrian Barraza, aAssistant Deputy Director, Center for Infectious Disease from CDPH. Then we have Chris Unzueta, Section Chief, Eligibility Operations Section for Infectious Disease from CDPH. And we also will have Laura Thomas, Senior Director of HIV and Harm Reduction Policy from San Francisco AIDS Foundation and Representative for the End of Epidemics Coalition. And we will start with Adrian. Thank you.

I'm actually going to defer it over to my colleague Mr. Unzueta to cover the first proposal regarding the ADAP estimate.

Your mic isn't on, so what we just heard from Adrian is that he's going to let Chris start once the mic is working and then we'll go back to Adrian.

All right, we're good now. All right. Good afternoon. My name is Chris Unzueta and I'll be providing you a brief overview of the ADAP estimate. For current year, the 23/24 Budget Act included ADAP local assistance funding of 398,000,000. The revised current year 23/24 budget is 353.9 million, which is a decrease of 44.1 million when compared to the 23/24 Budget Act. The decrease is driven primarily by lower medication expenditures and medical out of pocket expenditures than previously estimated.

For budget year, the proposed ADAP local assistance funding is 366,000,000 with no State General Fund appropriation, which is a decrease of 32.1 when compared to the 23/24 Budget Act. The decrease is also driven by primarily the same factors, lower medication expenditures and medical out of pocket expenditures, than previously estimated. That's all I have.

Thank you.

So, for the next item regarding the ADAP loan, the Governor's Budget, 24/25 budget included a proposed $500 million loan from the AIDS Drug Assistance Program Rebate Fund. The department's priority is ensuring continuity of critical AIDS drug assistance program and pre-exposure prophylaxis assistance program services. CDPH does not anticipate these loans disrupting services to ADAP or PrEP app clients as the budget proposes using funds from available fund reserves and does not cut any authorized expenditures.

Additionally, the AIDS Drug Assistance Program Rebate Fund is projected to have a remaining reserve and the loan monies may be returned to the program if needed. And I see that there are also some questions, and if you want us to go into those now, we're more than happy to.

Yeah, that would be great. Thank you.

Perfect. So your first question asked to please explain the volatility in the ADAP Rebate Fund and the variability in revenue coming into the fund. So the ADAP Rebate Fund balance is highly volatile. ADAP's pharmacy benefits manager, Magellan Rx Management produces quarterly rebate invoices reflecting the rebates due to ADAP and the timing of payments by drug manufacturers are variable.

Meanwhile, expenditures in any given month may include multiple million-dollar medication invoices, payments to hundreds of enrollment sites for enrollment services, thousands more in invoices to cover insurance premiums and medical out of pocket cost and other ancillary services. Were there any other questions on that first item?

Later there will be. Yeah.

Perfect. Moving on to question number two. Do you believe that large ADAP rebate fund loans to the General Fund potentially create some risk to the State of losing some either rebate or federal funding? In short, yes. Federal law requires that any rebates received on drugs purchases with federal Ryan White funds are applied towards statutorily permitted purposes under the Ryan White Part B Program, with the priority that rebate be placed back in ADAP.

Use of these rebates for other purposes could jeopardize ADAP's future federal Ryan White grant amounts. In addition, the AIDS Crisis task Force has historically negotiated on behalf of all US state and territorial ADAPs agreements with various drug manufacturers for reduced drug pricing. These agreements determine the mandatory 340B and supplemental rebate amounts. In addition, the manufacturer provides voluntary supplemental rebates. One of the largest HIV drug manufacturers has also already contacted the department and has voiced concern regarding the proposed rebate loan.

Loans against the ADAP Rebate Fund may undermine the ACTF's efforts to negotiate rebates that ADAPs throughout the United States depend on to serve, treat, and care for people living with HIV and AIDS.

Thank you. We will move on to Laura Thomas.

Yes, I'm Laura Thomas. I'm the Senior Director of HIV and Harm Reduction Policy at the San Francisco AIDS Foundation, and we are a founding member of the Ending the Epidemics Coalition that works to address the intersecting epidemics of HIV, viral hepatitis, sexually transmitted infections, and overdose here in California. And thank you for allowing me to speak here.

I want to echo some of the comments that you just heard and add some background on the AIDS Drug Assistance Program and raise some concerns about potential unintended impacts of taking dollars out of the rebate fund. The rebate fund exists primarily because of leadership from California and has served as a model that has increased access to life-saving HIV medications across the country.

This is one of the many areas where California has been a leader in improving health access, and I hope that we are not a leader in undermining health access for people with HIV because of this. Back in 2002, as you heard, California, along with New York and a few other states, created the ADAP Crisis Task Force and used our position as a significant purchaser of HIV medications to negotiate voluntary rebates with pharmaceutical companies.

And this has effectively addressed the crisis and eliminated waitlists and other restrictions on HIV medication here as well as elsewhere. One of the results is that since 2008, we have not had to spend any State General Fund dollars on our AIDS Drug Assistance Program here in California. Even though California has one out of six ADAP clients nationwide, we've been able to ensure appropriate care for all people living with HIV here in California.

And just to raise some of the concerns about the unintended consequences, the National Association of State and Territorial AIDS Directors has been raising these concerns and sent a letter to Governor Newsom that has been shared with Committee staff. One of the concerns is that taking funds out of this rebate fund will leave the state unable to meet obligations because of the volatility in the Fund. As you just heard, rebates are often delayed by six to 12 months and there are often significantly large purchases of medications.

It is our concern that it is too important to run the risk of reducing what is a working balance of this fund. It is not a reserve that is set aside, it is a working balance. Secondly, we are concerned about a chilling impact on the rebate program across the state and concerned that this will potentially jeopardize this extremely effective negotiations of voluntary rebates with pharmaceutical companies. Because we have been able to use our purchasing power to negotiate these rebates, they've been able to benefit all 56 federal jurisdictions, including territories in the District of Columbia. And this could result in people living with HIV across the country losing access to their medications. And then the third concern is that the federal requirements that we will run afoul of the federal requirements that these dollars be spent on the program. We know that HRSA, as part of the Federal Government, has been very taking an interest in what happens with this.

Their requirement is that any rebate on a federal dollar is used to expand that program. And we are concerned that we may be, again, in jeopardy of losing this. If we lose either the federal dollars or the rebates, it will create enormous budget requirements that General Fund would then be asked to pick up. California, traditionally, our leadership on HIV, as well as other health access has been substantial. It has been historic. We are very concerned. Now is not the time to risk this program.

It may feel like a relatively small issue in the context of our much larger state budget, but medications for people living with HIV across the country are at stake here and we would ask the Committee to please take this potential impact into account. Thank you.

Thank you. Department of Finance.

Yes, Christine Cherdboonmuang, Department of Finance. I'd like to go back to add comments for questions number 1 and 2, just to add a couple layers of context, and then we can answer questions 3 and 4 as well. So regarding number 1, volatility in the ADAP Rebate Fund. So finance would like to note that the ADAP Fund has consistently brought in about $325,000,000 in revenues annually, while the fund averages annual expenditures of about 259,000,000 annually, just looking at these last three years.

So from the perspective of finance, there is not volatility in the Rebate Fund and its revenues, notwithstanding comments from the department, we also recognize that there is a large reserve to absorb the impact of any fund volatility. And we do recognize the 6+ month delay in the receipt of rebate revenues and are working closely with the Department to ensure that the timing of loan fund disbursements and repayment does not just drop program cash flow needs.

Regarding number 2, so ADAP Rebate Fund loans and risk to the state. So Finance would like to note that the loan fund is coming out of a reserve and is not cutting any funds allocated towards any ADAP-funded programs. The state has successfully repaid its first ADAP loan in fiscal year 21/22 and continues to receive federal funding and a rebate rate of 114% over the last six years. For number 3, regarding when the loan will be repaid.

So the state is obligated to repay all of these loans and the repayment dates for all of the loans will be assessed based on program needs, availability of funds, and competing priorities through the annual budget process. Authorized spending revenues and reserves will be taken into consideration. And with number 4, regarding the specific control section language, the loans will be repaid in a future year when the fund or account from which the loan was made has a need for the monies.

So the loan funds will be repaid if the department has a need to fund critical program, or if and when the department has a need to fund critical program activities, under their approved expenditure authority in the ADAP Fund. So it's the same responses as previously. The repayment dates are based on this assessment of program needs and availability of funds and competing priorities.

Thank you. LAO.

Yes, we have nothing further to add on these items, however, we are available for questions.

Thank you. So I have a question for Finance. Even though in the past their revenue has supposedly outweighed their expenses, when you're looking at their current revenue, it is going down. So how do you know that, that you can guarantee the ability for them to be able to maintain their program if you take this $50 million loan?

So, as mentioned previously, we are confident in this fund reserve.

Matt Aguilera, Finance. Yeah. So we'll continue to monitor all these loans through our annual process, and we're taking into consideration program needs, availability of resources through our annual process. In this case, we have a substantial reserve that I think is adequate to meet any program needs in the.

And I'm sorry, what exactly is that reserve number again?

There's still 177 million in the fund as of the end of the budget year.

And I'm sorry, I misspoke. I said 50. I meant 500 million. And is it the stance of the Department of Finance that since you've taken this loan before and it has not impacted the ability to get federal funding or negotiating power, that you are pretty much sure that it's not going to impact federal funding and the negotiation power that we've heard from a couple of speakers already today?

Yeah, I think that any risk in those areas would be fairly low in the Finance's view. And in the event that we did have future program needs, if any of that volatility actually materialized, the loan authority in this case allows us to put dollars back where needed, so we have that flexibility.

Okay, so what you're stating is that if we got word from the federal government that since we're not actually using some of these funds directly to the patients that it was funded for, that we would be able to give them back the loan immediately.

Yeah, we have that ability to consider those types of situations.

Now, the first loan was taken out when?

So the first loan of 100 million was authorized by the 2020 Budget Act and has been fully repaid in fiscal year 21-22.

Okay, great. And that's when we had an excess. So, seeing that we are in a different situation now, and unfortunately, it's projected that we will be in a deficit for the next 2, 3, however many years. Do we have any kind of requirement to pay this back by a certain period of time?

Yeah, there is no specific requirement in the law. It's just that we assess the state's fiscal condition annually through our budget process. So we would have this on the books as an obligation and the loans would be repaid. But we work through the priorities from the whole list of various loans just to provide that which is needed at that given time.

Okay. Thank you. At this point, we will go to public comment. Seeing that there is no one who wants to give public comment, I want to thank everyone from panel number five, and we will now move to issue number six. Panel number six, this covers four proposals that fall under the Center for Family Health. First we will hear from Christine Sullivan, WIC Division Chief, Center for Family Health, CDPH. Next, we will hear from Leslie Gaffney, Acting Deputy Director for the Center of Family Health from CDPH. You may begin whenever you're ready.

Good afternoon. Christine Sullivan from the WIC Division and I've been asked to provide an overview of WIC modernization and participation. I'll start with participation, since that's the shorter update. WIC participation in California and nationally has been increasing slightly. For context, in January of 2020, California WIC served 833,000 individuals. Two years later, in January of 2022, we served 920,000 individuals. And this year, in January of 24, we served 991,000 individuals.

In USDA's latest report on WIC program reach, California served 67% of eligible individuals in 2021, while the national average was 51%. We were the second highest state, and we tend to be the highest state about every other year. We flip flop with Vermont quite regularly. The individuals that we are not serving tend to be toddlers and children, many of which were in the WIC program when they were infants.

We have a very high coverage rate for pregnant and postpartum women and infants, and then children tend to drop off as they get older, and that is a national trend as well. In our latest budget estimate, the current year, we revised estimate is 993,000 individuals, a 0.1% increase over the previous estimate. And this estimate is right in line with the actual number we served in January of 2024. The budget year estimate is just over 1 million participants a month, a 3.8 increase over the previous estimate.

Regarding WIC modernization, it's a federal initiative by the US Department of Agriculture to reach and retain more families, advance equity in the WIC program, and improve program services for families so that they can receive better services, more services, and redeem more of their food benefits. We divide that WIC modernization initiative into two buckets. The first is communication with families, enrollment at local agencies, the nutrition and breastfeeding support that's provided by local agencies, and state support to those local agencies.

And then the second component has to do with WIC food benefits, and the major component of that is online shopping. So addressing the first component, those local services and family support, we are requesting 14 positions in the budget year. And of course, for WIC, we are totally federally funded. So there's not a request for any General Fund, just for position authority. For communication work that our new position would do, we are developing an online application and need to continuously improve that.

The online application would streamline enrollment into the program and save considerable time at the local agency staff as well. We need to continuously update the phone app that WIC families use to check what their food balance is, scan items at the grocery store to see what's allowable, check their appointments, do some nutrition, online education, that sort of thing. And we have what we call our My Family website, which is geared towards WIC families of course, and we need to continuously improve that as well.

For enrollment improvements, we have our case management system that needs to be continuously improved to make it an easier process for enrollment and support local agencies for that. We also need to modernize family education and training of local agency staff with things like e-learning and designing more evidence based education. And this work for this family support local agency support, the reason we're asking for the positions at the state level is so that we can ensure that there is good standardization, that the work is meeting appropriate standards. And in fact, local agencies have asked us to do a lot of this work at the state level because it eases the burden on them.

The second component of WIC modernization is online shopping and we have requested three positions in the budget year and an additional eight positions in the following state fiscal year. Online shopping for WIC will improve access and convenience of the program, reduce the stigma, and promote equity. Families will still have access to brick and mortar stores. Online shopping does not necessarily include delivery. It could include delivery, but that will most likely be an out of pocket expense for families.

We are awaiting the federal regulations coming out, hopefully the beginning of next calendar year for online shopping, and then we would move forward on our state process, and there is a need to adjust some state regulations, which is leading to the request for the trailer bill language for an expedited process there.

Thank you.

And turning to the Genetic Disease Screening Programs estimate, this year, GDSP is adjusting the 23-24 budget downward by just under $20 million to 167.8 million, and their revenues for the current year are being adjusted down a $24 million decrease to $152.2 million. Both of those reductions are attributed to the continued decline in the birth rate, as well as the prenatal screening program's loss of exclusivity following a lawsuit when they transition from biochemical screening to cfDNA.

And so prior to the loss of exclusivity, about 72% of all births were screened by the program, and that's now down at 52%. For the budget year, we are expecting a decrease of $6.1 million compared to 23 budget year. And that is attributed to the ongoing birth rate drop, as well as the loss of exclusivity, in addition to the reduction of that one time funding that was granted last year, $7.4 million for a data migration to a cloud platform.

And those reductions are offset by a $1.2 million increase for contracting increases, as well as a $4.4 million increase for the prenatal testing that, not prenatal, newborn screening testing that will be added this summer. So revenue projections for budget year are $182.4 million. That's an increase of 6.2 million compared to 2023 Budget Act. We will be adding screening for sex chromosome aneuploidies to the prenatal screening program next month. And on July 1, we will be raising the fee $112.

So that will raise the fee for prenatal screening to $344. In addition, this summer, we'll be adding to the newborn screening panel, screening for mucopolysaccharidosis type two and guanidinoacetate methyltransferase deficiency. Those additions will happen in July. And July 1, we will be raising the fee from 211 to 226. That's a $15 increase. The fund balance is about 10% this year, and in the budget year, we projected to be 9%.

Thank you. Department of Finance.

Nick Mills, Department of Finance. We're in support of the staff's recommendation on this issue.

Thank you. LAO.

Yes. Will Owens, LAO. We have raised no concerns with the WIC modernization. We have nothing to further add on the other items.

Thank you. So I just want to, point of clarification. So the decrease in the PNS or the prenatal screening caseload is not a decrease in the number of women getting it. It's just that they are now using their options and not actually entering the program.

That is what we would assume, but we don't have access to the testing numbers for those participating outside of our program.

Okay. Thank you. So at this point, I'm going to open it up to anyone from the public who may have comments. You will have 1 minute each. Thank you.

Good afternoon, Madam Chair. Missy Johnson, here on behalf of Myriad Genetics, a company that develops and commercializes genetic tests that determine the risk of developing disease, assess the risk of disease progression, and help to guide treatment decisions across medical specialties.

Myriad has long supported the department's implementation of cfDNA coverage and applauds their proposal for adding SCAs to the program. And at the appropriate time, we'd ask that the Budget Committee support that. Thank you.

Thank you.

Good afternoon. Linda Nguy with Western Center on Law and Poverty. Regarding the WIC online ordering trailer bill, we support increasing access as long as it doesn't contribute to food desert. Recognizing that the Department is still awaiting federal guidance, we request that protections be in place for WIC recipients who are low income, that they not be charged any fees, delivery or otherwise, as this eats into their food and nutrition benefits. Thank you.

Thank you.

Karen Farley with the California WIC Association. I just want to support everything that Chris has outlined here and just call to your attention the outstanding performance of the local agencies, 84 agencies across the state and the state staff.

They've weathered, not only the COVID crisis, but the infant formula crisis, which for them was even more difficult than for the general public. And also rolled out many, many modernizations and really reorienting the whole program to a new normal with lots of staff training and opportunities for the families to better communicate. As Chris said, the online application will help streamline referrals for providers and families and really trying to simplify and improve access for the families. So we're just really proud to support them and really like to call them out because they're very humble workforce.

Thank you. Thank you so much for your comments. One of the people who spoke from the Western Law of Poverty talked about some suggestions as far as the online ordering trailer bill. This is one of the reasons why if we're not necessarily appropriating something in the budget, understanding this is federal funding and we've got to approve it.

This is one of the reasons why I like things going through Policy Committee, because we're able to have the input from all stakeholders, and you just have more eyes on something so that, like I said earlier, we're not missing something, we're not inadvertently leaving a group out or having, or causing unintended harm. And so if this continues in a trailer bill and we'll see what happens.

I do strongly recommend that you work with the stakeholders to make sure that we get this right and it's not something that we end up having to go back and fix later on. So with that, I want to thank this panel and we are going to move to our final panel, panel number seven. Our final issue covers four proposals under the Center for Health Care Quality. We will have Monica Nelson, Acting Chief, Office of Internal Operations, Center for Healthcare Quality, CDPH to come and speak. And you may begin whenever you're ready.

Good afternoon, Madam Chair. Thank you. I'm Monica Nelson, and I'll go ahead and just get started on the proposal number one, with a budget highlight. For current year 2023, the 2023 Budget Act appropriated 462 million to CHCQ. CHCQ projects current year expenditures to total 481.8 million, an increase of 4.3% compared to the 2023 Budget Act. This increase is due to the baseline adjustments and other projected increased expenditures attributed to title 18 grants. For budget year 2024-25 CHCQ estimates expenditures will total 473.7 million, which is an increase of 11.7 million, or 2.5%, compared to the 2023 Budget Act.

This increase includes a request of 1.1 million for the application and fee processing expansion, as well as a 2.4 million decrease in Federal Trust Fund expenditure authority, as well as various baseline adjustments. Although CHCQ will not be requesting positions through this estimate in 24-25, we do want to point out some programmatic achievements regarding complaint timeliness and completion. As of quarter one of 2023-24, CHCQ completed 93% of long term healthcare facility complaints within 60 days of receipt.

This represents a 30% improvement in the timeliness of long term care complaints since quarter four of 2021-22. CHCQ has completed 97.6% of backlog long term care complaints that existed as of April 1, 2021. And CHCQ has redirected resources to address these open complaints with a goal of eliminating the backlog by the end of fiscal year 2023.

As of quarter one of 2023-24 there are only approximately 645 open long term care complaints remaining. Regarding the, for the next still in the same topic. Regarding the vacancy and recruitment information, as of January 2024, the Center's overall vacancy rate is 13% and 12.9% of health facility evaluator nurses, which is an increase of 9.2 percentage since the beginning of the Covid-19 pandemic in February 2020. Los Angeles County's surveyor vacancy rate is 17%, an increase of 9% since fiscal year 19-20.

This combined increase is due to in part due to the newly authorized positions, but also because of increased retirements and separations. It's also important to note that the surveyor shortage is not limited to California but is also affecting other states across the nation, and it has become increasingly challenging to compete for registered nurses given the exponential increase in demand and salaries in direct healthcare settings.

However, our Center is exploring opportunities to diversify the classification makeup of our field operations surveyors to include professionals who are not registered nurses but can complement nurse skill sets and allow our nurse surveyors to focus on elements of the job that require their clinical expertise. To finalize, the Center has made significant progress towards restoring normal operations as the state continues to recover from the public health emergency.

While staffing challenges are likely to remain given the nationwide nursing shortage, the Center is developing and implementing strategies to adapt and continue delivering critical licensing and certification services. Thank you.

Thank you.

Do you like me to go into proposal two? Of course.

Yeah.

Proposal two, CHCQ application and fee processing expansion budget change proposal. CHCQ is requesting 11.5 positions and 1.1 million in 24-25 and 1.6 million in 2025-26 and ongoing from Fund 3098 to support application and fee processing expansion. The proposal includes adding positions into branches at CHCQ. This is to mainly address the increased workload in the respective areas, such as application processing and payment processing.

For example, our number of healthcare facilities and healthcare agencies that our Center licenses and certifies has increased from 11,000 to 14,000 in the past few years. One of the branches at CHCQ is the centralized applications branch. They process all applications submitted by health facilities for various licensure changes, including change of ownership, location, name, number of beds, and various key personnel such as administrator and medical director.

The same branch has experienced a steadily increasing workload due to an overall increase in the number of facilities, for which CHCQ has oversight. Additionally, recent legislation has made licensure requirements more stringent at certain facility types, particularly hospices and nursing homes. Furthermore, an area of the CHCQ Fiscal Services branch is responsible for processing all licensing payments which are submitted via paper check, including all payments received for reported changes.

Other responsibilities for this branch include processing deposits, annual fee notices, renewal applications, payment notifications, reconciliations of deposits and fees, revocations, and customer service to the entities. I'll stop now. Thank you.

Number three, healthcare facility application fee revisions trailer bill. CDPH is proposing statutory changes to set and adjust fees for applications and written notifications for licensure changes submitted by healthcare facilities, as well as to assess penalties for untimely payment, and to harmonize notification requirements for all licenses.

For context, each year, CHCQ processes over 10,000 submittals from health facilities for various licensure changes, and although processing these changes generates significant workload, current law limits the types of licensure changes for which CDPH may charge a fee. Additionally, some existing fees, such as change of ownership, may exceed workload costs. CDPH recently partnered with the Department of Finance Research and Analysis Unit to review this workload and has developed an updated fee schedule that better aligns fee revenue with workload costs.

This will allow the Department to implement this updated fee schedule, and the proposed amendments will authorize CDPH to charge a fee for all types of licensure changes and adjust them throughout the fee report process that is used to update annual health facility licensing fees. The proposal also authorizes the Department to assess penalties for the late payment of fees for licensure changes and proposes language to standardize notification and fee submission requirements for licensure changes across all facility types.

Adopting these amendments will allow CDPH to implement a fee schedule for licensure changes that aligns for revenue with workload costs. Additionally, it provides a more equitable distribution of costs among facilities. It addresses stakeholder concerns with the change of ownership fee and reduces cost pressures to annual licensing fees. One thing that's important to note is our annual fee report is in the final approval stages and we're estimating to post a net early this week. Moving on to proposal number four, skilled nursing facilities staffing audits fund shift.

The Governor's Budget reflects a onetime shift of 4 million in 2024-25 from the state General Fund 001 to Fund 3098 to alleviate the pressure on Fund 001. Such funds will support the mandated activities related to the monitoring and enforcement skilled nurse facility's minimum staffing requirements. These activities will be consistent with the allowable uses of the Licensing and Certification Fund, and this fund will support these activities for at least one year without increasing health facilities license fees.

For additional context, CHCQ has an interagency agreement with the Department of Healthcare Services to perform this work. The contract used to provide 50% of the funding for the staffing audits program from the DHCS state General Fund appropriation and 50% from a federal match. However, on December 31, 2022 the DHCS's fund sunsetted, and the state appropriation is now with CDPH. Thank you very much. I'll stop for any questions.

Thank you. Department of Finance.

Nick Mills, Department of Finance. Nothing further to add at this time.

Thank you. LAO.

Yes, regarding the budget change proposal and the trailer bill, we have not raised concerns with these. And regarding the fund shift, we find that proposal to be reasonable to address the budget situation.

Thank you. And I want to just thank you all for all of the work that you've done to improve the time that complaints within the nursing facilities are evaluated. That is extremely important, not only for the residents, but also for their families. I will now turn it over and see if we have any public comment for this panel. You will have 1 minute each.

Good afternoon, Dr. Weber, Madam Chair. So I have printed comments that are being submitted right now just because they go into great detail. So I'm here, Kristina Bas Hamilton, representing the California Association for Adult Day Services, in respectful opposition to the proposal from CDPH around licensing fee increases, specifically as they apply to CBAS, which are community based adult services, otherwise known as adult day healthcare.

The unique nature of the CBAS industry, it's very different from other Medi-Cal providers in that CBAS facilities predominantly serve only Medi-Cal recipients. 99% of those centers are only Medi-Cal, which means the providers, the reimbursement rates that they get from their managed care plans do not increase when licensing fees and other costs of going business go up. And in fact, the industry, and so a lot of this is in the letter, and we will submit more information to you, as well.

The industry is on the verge of collapse as it is due to the unsustainability of reimbursement rates that haven't increased in over 15 years, the cost of doing business being so very high. And all of these costs are mandated through state regulation and Medi-Cal Managed Care regulation. The reimbursement rates are set, the state sets the fee for service rate. The plans, they say they negotiate a rate, but they don't really, because they have all the power.

But the point is, these centers are struggling to stay afloat. In fact, we have been proposing a moratorium on licensing fees. They are $10,800 a year for a small mom and pop community based adult services program. Many are in ethnic communities that serve very particularly culturally responsive services. These centers are barely staying afloat, and fees of 10,800, if we can just do a moratorium to save even that little amount of money. We are trying to keep the industry alive, not add more fees.

And so there's a lot of detail in the letter. There's a lot of history of just problem with the licensing in general, and I won't get into that now. But we do want to respectfully oppose that proposal as it relates to CBAS. Thank you.

Thank you. Thank you for coming and providing this handout. We'll follow up. Thank you.

Good afternoon. Richardson Davis, with the California Council of Community Behavioral Health Agencies. Just wanted to acknowledge, representing mental health and substance use clinics. Just wanted to acknowledge the nexus between all of the health things that we talked about today and the link to behavioral health. Just how it relates premature death and hospitalization in the report earlier, and also CHQCs, and also just wanted to thank the Department for their earlier report and then all the good work that was discussed in today's Committee. Thank you.

Thank you. Seeing no more public comment, I would like to thank the Administration, the LAO, all of our panelists, stakeholders, and public, and everyone who participated did in this hearing. We will definitely continue with these conversations and be reaching out to some of you for further information and discussion. But at this point, this hearing is adjourned. Thank you.