Assembly Budget Subcommittee No. 1 on Health

All right. Well, good afternoon and thank you so much for your patience. I'm going to go ahead and call this Committee to order and ask Committee staff to please call the roll.

[Roll Call]

Okay, we are missing one person for quorum. I know a couple people are on their way, so we're going to continue as a subcommittee.

So, want to first and foremost say good afternoon and welcome to the Assembly Budget Subcommittee number one on health and welcome our new Member who has shown up on time and set a good example for the rest of us. So, thank you, Assemblymember Stefani, for being here with us and for being here this session with us.

This hearing is going to start our work to address the California state budget in the face of House Resolution #1. And really what you'll see this session is that much of our work is really in the context of HR 1 or the one big, beautiful bill.

We spent a lot of time last year talking about looming cuts that we saw coming due to potential actions in HR 1, and then those actions are now in place. And so, as Californians, we're trying to figure out our pathway through without having our health care system completely fall apart.

So, we've discussed many of the sweeping impacts, including nearly $911 billion over 10 years in reductions due to federal reductions in federal Medicaid spending.

We're also going to see a number of uninsured Americans to the tune of about 10 million uninsured Americans, with 2 million, close to 2 million here in California, losing Medi Cal coverage, as well as 2 million Californians affected by changes to Covered California, or what's also known as the Affordable Care Act.

We know there's barriers such as work requirements and a variety of increased eligibility determination requirements that are going to place extreme burden on our health systems. And we really are going to have to navigate quite a few changes, both from a policy perspective, but also from a fiscal perspective.

And that includes the uncompensated care, the wave of uncompensated care that we're expecting, reduced payments to providers, and an intensifying strain on our overall health system.

But while all of that is happening and going to continue to happen, and we're going to have to navigate through it, one of the pieces that I have heard for, I would say, two decades in my district on the Central Coast, and I'm hearing it more and more from colleagues in the State Legislature, is the extreme difficulty in just getting to see a doctor when someone needs one.

So, pre-HR 1 impacts, I've heard from people almost daily that they would like to see a doctor, they have insurance, they go to make an appointment, and they simply can't get an appointment because there's just not enough doctors in the system.

And so, California has made a lot of gains on what we would call the health care workforce, the variety of people that work in the healthcare system, but we're not making gains when it comes to physician access. We're actually facing huge losses, and those losses are exacerbated by HR 1.

And so, what we're seeing with HR 1 is that it's restructuring federal student loan programs. Beginning July 1, 2026, there will be less money for student loan programs.

And the expectation around less money on the federal side for student loans for med school is that one, we'll have less doctors coming into the system, but two, that those doctors will start to be primarily upper middle class—upper class people who don't necessarily represent the majority of California's communities are able to pay out of pocket for med school, so come from much higher echelons of wealth or are able to get private loans to help them pay for med school.

So, we're seeing, even prior to HR 1, but exacerbated within HR 1, this situation of just simply not having enough doctors in the system, which causes a whole variety of problems. So, we decided to start today's hearing with this particular subject.

There's going to be a lot of things that we're going to cover over the next number of hearings when we think about California's budget and how we navigate it. But we decided to start with this topic in particular because it is so acute for Californians whether they have insurance or not.

I would also say what I hear time and again is that physicians just can't afford to take insurance, whether that's Medi Cal or other kinds of insurance.

And so, they're leaving to participate more in a concierge system where people are paying out of pocket for medical care, as opposed to being able to use insurance if they do have it. We're facing some pretty drastic problems and we're going to dig into those today in this hearing, one of many.

But I want to thank partners and stakeholders who are going to be joining us today.

The University of California, the Department of Healthcare Access and Information, the Legislative Analyst Office, the Department of Finance, and many physicians and educators who actually have traveled from the Central Coast and other places to really be able to explain what this is like in real life, what's happening, boots on the ground in districts and probably in every single county across California outside of some of the largest counties that are able to draw the most resources.

So, just a couple housekeeping notes. We're going to cover two issues, as listed on the agenda. There's two supplemental handouts that you should have from the Legislative Analyst Office, and I do want to say thank you to the LAO for their partnership.

I asked some questions not too long ago and they were able to turn around a couple of reports very, very quickly, so I want to say thank you for the work that you did to get ready. Also, to the University of California and HCAI, who've been responsive.

We've asked for a lot of data over the course of preparing for this hearing, including what I think is super important or very, very important, which is county level data, so that we can see are California's programs working and if so, for whom are they working?

Because I have the distinct experience that the programs we have in place have yet to work for the breadth of Californians. They do work for some Californians, but not for all Californians. So, we will have time to dig into all of that.

Before I jump in, I'll open it up to either Member who's here if you want to make any opening comments and if not, we'll bring—we'll get started on our panels. Okay, perfect. With that, let's see, the agenda and the LAO handouts are available online on our committee's website and physical copies are available in the hearing room, if anybody needs one.

We've also made the county level data available online. After we conclude a panel presentation on each issue, we will take questions from Members and then comments from the public. The public comments will be taken in person at the end of each of the issues.

So, we'll do panel one, questions from Members, public comments, then go to panel two and repeat that order. If there's a lot of people here, if you could keep your comments to a minute or less.

We look like we have a manageable audience for public comments, so you should be able to say the things that you were hoping to say.

But if you were not able to attend, you can submit your comments via email@[email protected]. So, with that, we will start with issue one, which is HR 1 and impact on medical student loans and the overview of state student loan repayment programs.

And for this panel, we have representatives from the LAO, excuse me, the Department of Health Care Access and Information, the University of California, and the Department of Finance. And we're going to be talking about a broad overview of HR 1, its impact on medical student loans, and then an overview of the state student loan repayment programs that support physicians.

And so, with that, we'll start with the LAO and then move to each of the panelists. The LAO is going to provide an overview of the impact of HR 1 on access to medical school, as well as student debt. And for this segment, LAO has prepared the handout that I mentioned for you in their presentation.

And I'll just ask each of you if you can introduce yourselves as you get started. And we'll go from L AO to HCAI and then an introduction of some of the—of two of the doctors that we have here with us. I'll turn it over to the LAO to get started.

Thank you. Good afternoon, Chair Addis. Florence Bouvet with the LAO. So, in my remarks today, I'll be summarizing the changes that HR 1 is introducing to the federal student loan policy and discuss what that could mean for access to medical school and for student loans in California.

And I'll be referring to the handout, that has been distributed, in my comments. And the main takeaway of my summary will be that those new rules will affect mostly who can afford to enroll in the California medical school more than the actual number of students who end up enrolling.

So, I'm going to start on page one of the handout with some background information to explain why student debt has become an issue. So, on page one, we are reviewing some of the recent data on the cost of attendance to medical school and focusing first on tuition and fees.

Those range from around 40,000 dollars at UC campuses to $75,000 at some of the private institution. But it's important to remember that tuition and fees only account for half of the cost of attendance. And for UC campuses, the total cost of attendance, as you see in the data, usually amount to around $80,000.

And for some of the private institutions, we go all the way up to over $100,000. And so, it's as a result of those high cost of attendance that students have to resolve to different means to finance their education.

So, as we explained on page two of the handout, students typically use a mix of grant or scholarship loans and also use their own financial means to cover the rest of their, of their cost of attendance. So, I'm going to use some of UC data for this part of the presentation because it's a bit more publicly available.

So, among UC students, the vast majority do receive some form of scholarship of grants, 87% of them, and the average award is slightly over $36,000, which means that they have usually to use loans to cover the rest of their expenses.

And in the case of UC, it's more than half of the students who rely on loans. On an annual basis, they tend to borrow around $47,000. And there's different types of loans that they can rely on. Most students are going to use federal direct subsidized loans, probably by the government.

And because those have a cap right now, even before HR 1 new provisions, a subgroup of the students in California will rely on another program that was started in 2006 that's called the Grad Plus Program, that allow the students to cover the entire cost of attendance.

So, again, in the UC, it's 20% of the students who borrow through that additional channel. And currently, private loans are very limited used by students in California. When we're looking at the debt of students by the time they graduate, private loans only account for less than a percent of that debt.

So, the, the issue here is that students, because they rely a lot on borrowing to cover the cost of their education, tend to accumulate substantial amount of debt, which is what we describe on page three of the handout. So, nationally, the average level of education debt for medical students is around $220,000. It's a bit—it's slightly less for UC students.

Right now, the average is around $150,000 and, but we do have that while 2/3 of UC students graduate with some debt, there is a substantial number—it's roughly one out of five medical students at UCS who graduate with more than $200,000.

And it's for that group of students with high level of debt that the new provision introduced by HR 1 will make financing their medical education more challenging. So, if I'm now turning to those provision in HR 1, which we summarize on page four of the handout, as Chair Addis mentioned, they're going to become effective on July 1st, 2026.

And I'll just emphasize three main provisions that will impact more directly the medical students. The first one is new direct loan caps. There's a new annual cap at $50,000 for medical students and other professional programs, and a new program cap for the entire length of their medical education, which will be set at $200,000.

There's also a new lifetime debt cap that will be introduced, and that cap includes both undergraduate and graduate debt. And it's currently set at $257,500. And what's important to note for this cap is that it's not adjusted for inflation.

Which means that over time, as cost of living and the tuitions are rising, those caps are going to become more binding for some group of group of students. And finally, the other critical aspect of the new law that will be, I think, problematic for medical students is the elimination of the Grad Plus Program for new borrowers.

So, if students are already borrowing through the program, they'll be able to access this line of funding until they graduate. But for new students, that options will no longer be available, which means that students are going to have to find a new way of financing the rest of their education.

And so, on page five of the handout, we explained that the impact of those new provisions on students will depend significantly on the extent to which students rely on loans to finance their education, and because earlier research has suggested that the Grad Plus Program had had a significant impact on how much students were relying on private loans, by eliminating the Grad Plus Program, students will have to rely more heavily on the private loan option.

And it could become problematic because first, those private loans tend to have stricter underwriting.

They also, for students who have lower credit score, they could entail much higher interest rates and they provide fewer protections and fewer flexibility when it comes to the repayment. So, those type of private loans right now do not offer the typical, income-driven repayment scheme that we observe with the federal loans.

So, with that in mind and understanding that those provision have not come into effect yet, there's still uncertainty in terms of exactly how those provisions will affect students. But we know that in the long run, they're likely to have some impact on students' behavior.

For example, as I said in my introduction, students who come from low-income households who are—who tend to rely more on loans to finance their education—and who are more likely to not be able to find a cosigner for a loan might have a difficulty using the private loan alternative to cover the cost of their education.

So, it's likely that people from low-income households might be deterred from applying for medical school. Some reports from the Association of American Medical Colleges has also found that when they surveyed the graduates from medical school, a substantial number of the respondent indicated that their education debt had an impact on their specialty choice.

So, it was around 20% of those. And for students who come from low-income household or who have over $250,000 in debt, that percentage who take into account education debt in their specialty choice jumped to 35%.

It's also likely that graduates might change their decision in terms of where they want to practice based on, again, the level of debt they accumulate, and they might decide to move towards higher paying regions.

There's another report from that AMC Association that find that students who have higher debt level are less likely to look into underserved areas as their practice destination. So, to conclude, I want to emphasize that HR 1 is really changing the financing tools that students will rely on to cover their full cost of attendance.

And at this point, our office estimate that the main policy concern may be access to a medical education and the composition of the student population, rather than, you know, a dramatic decrease in the number of medical students that will actually complete the program. Thank you and happy to answer any questions.

We can move on. Move on to HCAI now.

Thank you very much. Good afternoon. My name is Libby Abbott and I am the Deputy Director for Health Workforce Development at HCAI. I will share about 3 of our loan repayment programs that are available to physicians. Loan repayment programs are used by HCAI primarily to attract and retain health workers in specific settings.

By offering loan repayment in exchange for a service obligation in an underserved setting, we can help expand workforce availability in those SETT settings in the short term for the period of the service obligation, and we improve the chances of retaining health workers in those same settings in the long term.

The theory of change for how we do that is threefold. Loan repayment reduces the impact of financial considerations on their job choices, as the LAO just described. It exposes them to the rewards of serving in underserved settings.

And the theory goes that if they haven't already, awardees will put down routes and build local connections that will outlast their service obligations. So I'll start by describing the California State Loan Repayment Program SLRP, which is California's National Health Service Corps Loan Repayment Program.

It aims to increase the number of providers practicing in federally designated health Professions shortage areas, or HPSAs. The program is open to a number of health professions types. For physicians specifically, that includes family medicine physicians, internal medicine physicians, OB GYNs, pediatricians, psychiatrists, and gerontologists.

Core funding for this program includes a $1 million award that we typically receive from the Health Resources and Services Administration or HRSA federal entity, as well as $333,000 allocated from the Song Brown General Fund.

Historically, we have supplemented this amount with other sources such as funding for Geriatric Care workforce programs or the Children and Youth Behavioral Health Initiative cybhi, and in such cases we've modified our scoring criteria accordingly. We have expended all of those special sources.

Grantees may receive up to $50,000 in educational loan repayment grants in exchange for a two year service obligation. The program has historically required a dollar to dollar match by employers. I think it's worth noting that the requirement was suspended under the American Rescue Plan act for fiscal years 22232324 and 2425.

We are resuming the match requirement, or I should say the match requirement is resuming in the next program cycle. I would note that we do not. We do actually have post service retention data for the state loan repayment program from the National Health Service Corps portal.

So it's not our own portal, but we have access to those data, and we were only able to share these with the Committee after the agenda was posted. So I apologize for that, but I'll voice over some of the key findings.

Overall, we have data from 901 alumni from the years 2019 to 2026 and they do show high retention rates of SLRP awardees in underserved settings. So at the end of their service obligations, 100% of awardees are located in a HPSA, which makes sense.

Within 12 months that number reduces to 43%, and by seven years post completion that number is 35%. So 35% in HPSAs specifically.

However, if we broaden the definition of success to include not just HPSAs but any safety net setting, the data are more encouraging, suggesting that the mechanism is successful in supporting awardees to build connection and commitment to working with underserved communities.

So one year after service completion, 74% are retained in either a HPSA or a safety net setting, and by seven years that number is still high at 72%. By seven years post completion, 84% are still in California.+

I also note that we do have plans for more robust evaluation of both our loan repayment and graduate medical education programs, which I'd be happy to share more about subsequently. For now, though, I'll continue describing the programs.

The Stephen M. Thompson Physician Corps Loan Repayment Program, or stlrp, aims to increase the number of physicians and surgeons serving in medically underserved areas in California. The program is funded through a $25 surcharge from renewal and licensure fees collected by the Department of Consumer affairs for allopathic physicians in California.

Although our core funding for this program is indicated in the budget at roughly $1 million per year, we have in the past supplemented with additional funds from licensure fees as well as other sources such as geriatric care, workforce programs, cybhi, and others. As I described for the state loan repayment program.

As is the case with state loan repayment, when we use those special funds we will earmark the specific funds and award scoring and selection are then modified to meet the policy intent of that particular source.

This program is open to family medicine physicians, obstetricians and gynecologists, pediatricians, internal medicine physicians, emergency medicine physicians, psychiatrists, gerontologists, and surgeons, 80% of the program funds must be used for primary care providers, so that's family medicine, OB, GYN, internal medicine, and pediatrics, whereas the remaining 20% can be used for the other specialties that I listed.

Eligible physicians may receive an award up to $105,000 in exchange for a three year service agreement.

To be eligible, physicians must provide at least 32 hours of direct patient care per week in one of a list of qualifying facility types that includes it's a long list federally qualified health centers, rural health clinics, primary care or mental health profession shortage areas and others.

All eligible sites must serve at least 50% Medi Cal and uninsured populations. Finally, I'll describe the County Medical Services Program Loan Repayment Program the County Medical Services Program is a collaborative of 35 counties providing health services for uninsured indigent adults that are not otherwise eligible for other publicly funded health care programs like Medi Cal.

The CMSP Loan Repayment Program assists with the repayment of qualified educational loans for healthcare professionals who provide primary care or dental services at an approved site located in one of the 35 CMSP counties for physicians. This program is open to family Medicine, Internal Medicine, ob, GYN and pediatrics.

Per our revised agreement executed between CMSP and HCAI in 2025, we receive an annual amount up to 1.71 million from CMSP to fund this program. Grantees may receive up to $50,000 in educational loan repayment in exchange for a two year service obligation.

We have learned that the CMSP Governing Board recently approved completing the current scholarship and loan repayment rounds with hcai but not funding further rounds.

Finally, I will I'll just note that we do currently have a fourth and time limited loan repayment program that is open to psychiatrists, Addiction Medicine physicians through BH Connect, the Medicaid waiver from CMS negotiated through dhcs. If you're interested, I'd be happy to share more about that program and its current status as well.

Thank you so much. I will have a couple questions when we finish up just about some of the figures that that you mentioned, but now we're going to get some additional perspectives both from and I apologize, I'm probably going to butcher both of your names.

Dr. Sunita Mutha, Director of the Health Force Center at UCSF and Dr. Grant Hartzog from the University of California, Santa Cruz. We'll start with you Dr. Mutha and then go to Dr. Hartzog about just what this is looking like in your day to day work work and the programs you're working on.

Great. Thank you. Pleasure to be here. I'm Sunita Mutha. I am a practicing primary care physician trained in internal medicine. So part of my work currently involves working with trainees with residents as well as delivering primary care.

I represent the University of California I'm a professor of medicine at UC San Francisco and Director for Health Force center, which is very committed to the set of issues we're talking about here. I will say this is a massive issue.

It comes up in every part of conversation whether it is the decision to go to medical school and we are in California, I think we all know we have fewer medical students per population than we do in other states. We have 23 medical students per 100,000 versus nationally 41. So we already start out with a smaller population.

And for when they go on to training, that differential continues. What we can say is the issues around the affordability of education is primary. Even in state supported public schools, the decision about how to pay, which family member, if any, can support the ability to pay.

There is absolute differential based on socioeconomic status, race, ethnicity, other characteristics that change what the capital is, if you will, that a family has to be able to use to pay for medical school. And for our residents, they're extremely sensitive to cost.

In San Francisco, we live in a high cost region because what we're talking about is not just educational debt. We are talking about the cost of living and the other indirect expenses that come with education, with medical education training. And they are very sensitive to location of where they will go for training purposes as well as the.

I work with internal medicine trainees who have the potential to go into primary care, as I did, but most won't because some of that is really determined by cost and affordability and the ability to pay back on educational debt.

I will say the other things I think to call out is there are some high points in our state that we should be proud of, that when we do produce trainees, when we produce medical students, we produce residents, they stay more California medical students stay in our state than they do in other states.

And if you have gone to your, your if you completed medical school in California and completed residency in California, the likelihood that you will stay in the state is over 80%. So the investment really does yield a value, but it is a long investment. I'm going to see the floor to you for other questions.

Thank you so much, Dr. Herzog.

Thank you. Chair Addison Members, I'm Grant Hartzog. I'm a professor of molecular biology at UC Santa Cruz and I'm the regional Director of our new Prime Central coast program, which I'll explain to you in a moment. So I think you're all well aware that California's rural and agricultural regions in particular suffer a shortage of health care providers.

On the Central coast, we're about 20% below the statewide average of healthcare providers relative to the population. Furthermore, we know that about 25% of California physicians are 65 years or older. So we're facing a retirement crisis. Finally, in these agricultural regions, which are heavily Hispanic, we have few Hispanic physicians.

And we know the cultural concordance plays a big role in health care outcomes. So about 8% of active licensed physicians in California, or a little less than that, are Hispanic, whereas 39% of our state population is Hispanic. Despite our rural setting, the Central coast is one of the most expensive housing markets in the nation.

Physician salaries on the Central coast are actually lower than they are in Silicon Valley or the Bay Area or Los Angeles Angeles.

So a typical scenario that we see on the Central coast is that a physician will come, they'll practice for a couple of years and then they'll leave for a higher salary job in Silicon Valley or elsewhere. So we have a tough time holding on to practitioners on the Central Coast.

And on a personal note, after the third pediatrician in a row left Santa Cruz, I put my son into a concierge medical practice for exactly the reason she stood.

So to address these problems, in collaboration with UC Davis, UC Santa Cruz is setting up a Prime program program in medical education to really focus on producing providers for the Central Coast. We're seeking to identify and support and recruit kids who come from the Central Coast.

They would spend two years at the UC Davis School of Medicine and then return to the Central coast for their clinical training in their third and fourth year.

And our idea here is that we're going to introduce those students to the healthcare needs and challenges of the Central coast, to the local medical community, to our two local family practice residency programs in the regions, and, and to really support them and hopefully retain them in the region.

This grow your own approach is being used elsewhere in the state in the nation. So for example, UC Davis has its Tribal Health prime program in the north state. UCSF is working in Merced, in Fresno for their San Joaquin Valley prime program as well.

I want to come back to one point that Dr. Mutha made is that a significant fraction of Californians who go to medical school go out of state because there aren't enough slots in California. Those people who are going out of state are going to be primarily going to private institutions and paying more.

So they are going to be particularly affected by the impacts of HR. 1. The people that we're trying to recruit into the prime Central Coast, into the Tribal Health prime, into the San Joaquin Valley prime programs, those are all people who tend to be first generation people who are coming from poor families.

So these are the people who are going to be affected by the impacts of HR1.

And it's the Legislative Analyst Office has pointed out, and as you pointed out, Chair Addis, the likely outcome of H R1 is that we're going to have a bunch of rich people who want to go back to San Francisco, who want to go back to Los Angeles, in the underserved regions of the state, will only become more so.

Thank you.

Thank you so much for making the track from Bay Area and Santa Cruz area and sharing our experiences with us. We're going to move to questions from Members on the dais.

I have a number of questions and then I'll open it up to excuse me, to Members of the Committee, But I think Dr. Mutha, you mentioned there's 23 med students per 100,000 population compared to in the 40s nationwide, 41 nationwide. Do we have a sense of why that is?

Is it about the cost that you just explained or other factors?

There are multiple factors. I think that it has to do with how few schools we've had. It's been a large portion of it. We've had a big increase in recent years with the opening of several new medical schools.

But relative to our population, we just don't have the kind of capacity that a New York state or other institution does to be able to take all of those who are interested in that profession and give them the opportunity to do it.

And I've heard, and this is for anybody on the panel, really, I've heard that where a doctor does their residency is potentially the single biggest factor of if they will stay in the community and practice medicine, as that kind of the general sense of it is.

And the color I would add to that is the more rural exposure you have, the greater your chances that you'll actually stay in a rural setting for practice. So it's not just geography, it's the kind of experience that you have during that training. So that residency experience, please.

Jason Concenturos, LAO, I would offer a bit more of a nuanced perspective to add on to the points here, which is that I'm not as familiar with. Perhaps there is data on where residents end up in terms of communities and regions. I'm not aware of that data.

We do have better data for folks statewide, and we know that as sort of indicated, over 80% of California residents stay in the state. And there is a bit of a question about where how do you best get people to stay in a community. And you have a couple of different approaches which you're hearing in this hearing.

There's the, you talked about loan repayments that sort of focuses on the back end and it's very directly related to going to a specific region because their commitment is tied to that. On the front end is recruitment. And that's really what the UC prime program really tries to get at.

That's a different theory of change that focuses on getting people from those regions into the pipeline on the basis that they might return back and be more likely. And then there's residency programs too, which are sort of in the middle. And it's really hard to gauge which of those are the most effective.

They have different sort of arguments why some might be more effective in terms of getting at the regional issue. But there hasn't been a lot of sort of system wide analysis on the effects of all of these different strategies. So it is a bit hard to know what the biggest factor is among those three.

That's helpful. And not to put you on the spot, but I'd love to see that report in the future. When you said there hasn't been a system wide analysis, I'd love to. I'd love to get my hands on such a system wide analysis in the future.

I did want to note that the California Health Care Foundation did do kind of a literature review on this a while back. So there is, I may be overstated when I said there were no resources, but it is hard to. Yeah, it is hard to.

It's really hard to sort of assess all the data and sort of figure out what's the most effective strategy.

No, it makes sense what you're saying. I did want to ask, I think it was hci. You mentioned a handful of numbers and I was going to ask if you could repeat some of the numbers that you said. I'm trying to find them in my notes. Just around percentages that stay in California.

Absolutely. I'm happy to share the state loan repayment retention data. Maybe that's what you're thinking of. I think that's what it was. Great.

So we have a number of different outcomes from that state loan repayment program, including how many stay in California, but also how many stay in health profession shortage areas and how many stay in safety net settings. So looking specifically at health profession shortage areas, some of the data points.

And we'd be happy to share this as a follow up too. So you can have it in front of me. Sure.

And you may have shared it in a handout, but it's helpful for those that are listening and watching and for me to just hear it one more time. Of course.

So looking at the outcome of how many stay in a health profession shortage area, within 12 months, we have 43% of folks remaining in a health profession shortage area by seven years post completion, that number is 35%. So there's a drop off, but not huge.

However, if we change the outcome we're looking at, and we're looking at how many stay not just in a hpsa, a health profession shortage area, but how many stay in a HPSA or a safety net setting, then the numbers look pretty good.

So one year after service completion, 74% are in either a HPSA or a safety net setting. And by seven years, that number is 72%. So pretty much sticks.

That would suggest I talked about sort of the theory of change of what makes a loan repayment work, that the piece about establishing that connection and commitment to working with underserved populations and in underserved settings seems to be working. And then finally, seven years post completion, 84% of those folks were in California.

So it sounds like the loan, the requirements of the loan repayment, to the LAO's point, are a piece of what's creating success in terms of getting and keeping doctors here locally. Last question, and I'm going to open it up to the dais for colleagues that may not be aware, the public may not be aware.

And Dr. Herzog, I know you know about concierge programs, but if any of you could just give a little contour to what is a concierge program, because a lot of people are used to, I have health insurance. I go to that doctor, they take my health insurance.

But on the Central Coast in particular, we've had this huge proliferation of concierge and doctors leaving the system, which is really creating depletion within our ranks of people who will take insurance.

I'm happy to give an overview of how they typically work. There are different levers of why people do it, but typically a concierge physician, when they do that, charges a fee to join that practice. That's an annual fee, can range in the amount and in that and oftentimes they do not Bill insurance. So you're paying separately.

You can choose to submit it as a patient if you would like to. But the what that allows the concierge practice to do is they severely limit the number of patients they see.

So a typical concierge practice would be 300 patients for primary care type of work, a more typical number that's used for primary care for a panel size is closer to 2000.

So you can see that the drop, the advantage that the patient gets is someone to really what we would all want someone to walk them through every aspect of that health care journey. Specialty conversations, appropriate referrals, the follow through interpretation of results which are otherwise more difficult to do. And there's definitely been a growth.

What it allows the clinician to do is it allows work life to be much more balanced.

You can limit the number of patients you are available at all times to that panel, but the data, I think enable people to make a decision about whether it's feasible to do, to have a panel of 300 that you can manage even with 247 availability. So it's much more doable. But that's an overview.

And to tie it back to our General topic around med school loans and how uplais in are you seeing any correlation around who's going in, who ends up going into concierge and being pulled out of.

I don't have a direct correlation of that information. A typical concierge practice, someone who goes into concierge practice has been practicing for a few years. So they are not brand new trainees who have left. They are often people who've been working 510 or more years and are looking for a more sustainable career option.

That's it. I'll turn to Assemblymember Patterson and then if any other Members have questions and then we'll go to public comment.

Great, thank you. You know, just pick off on the last line of questioning regarding concierge because that's where it ended and just easier to start there. But is there any kind of tracking or anything like that on who's leaving maybe, you know, medical group or something like that to go to concierge service?

Anecdotally, it's people who are burning out and getting fed up with dealing with panels of 2,000 patients and with all of the bureaucratic work that goes on in their practices. That's the people I know who are doing it.

Yeah, it seems to be consistent with, you know, what I'm hearing as well, you know, from the, from my friends who are doctors as well as, you know, people that I meet with in my district.

So these issues in terms of people moving to that which I think concierge care is great and I do see a lot of hospital systems sort of trying to sort of break into that a little bit, you know, which, which will be interesting.

But so these, this seems like somewhat of, of a systemic issue that's been going on for a while. Okay. And in terms of, you know, the impact on, on students or the medical schools and people going into the profession in the first place. And how does California's cost of medical school compared to, you know, maybe other states?

Go ahead and start.

Yeah, the UC system is one of the best deals out there, for sure. So for public education, the UC system delivers high value for an amazing price. The private schools are more expensive. Some of those schools have large endowments where they can provide a lot of support, like Stanford. Others not so much.

And then we have our osteopathic schools of medicine, which also tend to be fairly expensive. And those numbers are in the LAO document as well.

Great. Well, perfect transition of me asking the LAO in terms of, you know, the medical school, the UC systems, which I do routinely hear, you know, on so many levels. I mean, whether it's, you know, become a, becoming a lawyer, you know, what. Not just the value in terms of obviously what you get, heavily subsidized by taxpayers.

Might I add an investment that I think, you know, we're making into that. But just. Do we generally know how many out of state students are part of our medical schools and how many are in state? Do we generally know that?

I don't think.

Or would the number be available somewhere?

Yeah, we don't have that information. It would be available. The only tricky thing is for US Citizens who are non residents, they typically gain residency after the first year of study. So that resident count includes people who maybe came from out of state initially and then gained residency just from living in the state.

Okay, so like one year medical school basically, and then maybe become a resident or once you're a residency.

And there is a lot. There is. Again, it's, as we sort of noted previously, it is a little difficult to track because a lot of, a lot of medical students, a lot of students who. I guess we're talking about medical school. Yeah, sorry, I was getting ahead of myself. But yeah, that data is available.

We could, we could circle back with you on the, on the breakout. Okay.

Yeah. And then the cost is more expensive, I assume, for out of state at UCs or than it is in state tuition. Although as mentioned, it might change after a year of school or residency. Yes, please.

So if I'm, you know, looking at some of the UC campuses and I'm looking at the total cost of attendance, the difference is usually around $13,000 for non resident students.

Does the UC or the state somehow track the number of out of state students who actually stay in the state after medical school. If you don't know, that's fine, I can ask.

You know, I think we know the percentage that stay for residency training and I know we'll talk about that next, but it is, I think it's about half stay in state. I'll have to confirm those numbers with you afterwards. Stay to continue their training. But I think your specific question is like, what percentage of those graduates are.

Well, yeah, you know, I mean, you know, just as a public policy.

I mean, my guess is I'm just, you know, maybe nobody agrees with me in this building, which is very common here and at home is, is, you know, we bring in students from out of state, we're investing in them, taxpayers are, and then they leave, you know, go back maybe to their home or something.

And so that's just an interesting. Would be interesting to know. I guess, you know, we may not have the answers for that right this second. And I don't know if that's a good or bad thing at this point. I just sort of would be interested in that information, you know, in the age of very limited dollars.

But, you know, I guess, you know, it seems like the crux of the issue that we're talking about here, which is HR1. I have a feeling we'll have a few more conversations surrounding the impact of HR1, the inability.

So you had mentioned that, that it may not impact the number of students, but maybe where the students are coming from. Correct. Is. Am I accurately.

Yes.

Paraphrasing. Okay. Are there things the state could do maybe to. Because, you know, I'm kind of forward thinking here to help incentivize the types of students we'd like to see and where we would like them to practice at if possible. Because we don't want, you know, holes of where there are no doctors. Right.

Are there things maybe, or maybe in the future the LAO could think about maybe some policies we could look at to help incentivize students to stick around.

So the reason why, you know, our initial estimate is that it's not going to impact the number of students who will attend the medical schools because the admission rates are so low right now that they'll be able to find enough students to enroll in the school.

But it will probably have a stronger deterrent impact on students who come from low income families because they might not be able to find a viable alternative to the grad plus loan programs.

So it's, you know, finding a way to, to bridge the financing gap for those students who, you know, might not be able to use a private loan as a substitute. That's, you know, potentially one area in policy that the state could consider if they, you know, we want to really preserve the diversity in the student population.

Yeah. And I think just, you know, also just where people are practicing. Right.

Because, I mean, I think all of us may, or a lot of us with how big some of the districts are, especially too, can represent areas where, you know, if you go in the Central Valley or, you know, I represent parts of the foothills where maybe we have two hospitals. Right. One in South Lake Tahoe.

I don't represent that particular location, but Marshall Medical center, you know, up in Placerville, you know, and we want to make sure, you know, obviously we have doctors as well, you know, for that population. That's the only emergency room on that side of the hills. So it's pretty important to my district and the people that live there.

But, you know, I was reading before this hearing and not to like, you know, we have HR1, and I know that that's going to be a big topic of whatever happens in the Capitol this year, and I understand that, and I understand why.

In fact, I've supported a lot of the resolutions asking for, you know, funding in certain areas to be brought back. But, you know, the. It's still. At the end of the day, we have a systemic issue with recruiting and training doctors in California.

You know, I have here, you know, 2017 report from California Medical association about the same exact issue nearly a decade ago. So, you know, this is. This is. I bring this up as we have some systemic issues. Burnouts, my friends who are. I know very few doctors, and they receive a lot of text messages from me.

I have four kids, so just put them on rotation. Who's getting the text that day? But, you know, we. All of them. I think every doctor who I've ever met, you know, I mean, they're hardworking. I think there's a general feeling of kind of, you know, burnout.

I mean, they went into that because they, you know, they care for people, they want to help them and things like that, you know, but they also have families. They also, you know, have things that they need to do as well.

And so I think we have this systemic issue of not just attracting and retaining doctors and where they need to be, but this way predates HR1. And I'm not dismissing the impact of what HR1 might have.

We could have all of these students with very low rates of admission, and then we put people through medical school and we would still not solve the problem if we come up with programs to find doctors where we want them to be and from communities where we want them to come from, we still don't solve the systemic issue here in California.

So I think maybe concurrently as we're looking to address HR1 issues, we have to keep our eye on the ball for the issues that we talked about before HR1 was even a piece of legislation, you know, before it was a twinkle glimmer in my eye.

You know, we've, we've had these issues and we've talked about them for quite some long time. And so let's not forget about those. Anyways, thank you, Madam Chair.

Thank you, Assemblymember. Assemblymember Bonta.

Yeah, I fundamentally agree with Assemblymember Patterson on this kind of the pre existing systemic issues that were that we've been faced with.

I think we, I think we had a hearing last year about the gap around the number of physicians that we needed to be able to provide culturally concordant care, kind of the profile of those physicians compared to the people who are seeking health care. And certainly there has been a big issue.

I wanted to focus on the one statement that you made around the low admissions rates. So I think one of the concerns is that we have not enough people being able to go through our UC, especially our higher education programs here in the state of California.

Part of that seems to be that we've made a determination around how many students we can actually support in our systems from just looking at a systemic issue. Wouldn't there be a simple solution of increasing the number of people who are educated in the medical profession in the state of California by increasing those admissions rates?

What would you need to be able to do that?

Sure, I'll start and then Dr. Mutha will pitch in. 60% of Californians who go to medical school have to go out of state to go to medical school. For too long, the state of California has relied on the fact that this is a nice place to live to recruit its physicians.

So we haven't done our fair share of training physicians. And as it's become a more expensive place to live, we're starting to run up against problems. The addition of visa restrictions on recruiting foreign trained physicians is only going to, to make that work.

So personally, I would absolutely agree with you that California does need to expand the number of slots in medical schools and in residency programs. The UC system is trying to do this through the formation of branch campuses like at Merced, like on the Central coast as well.

The challenge we face is that it takes a minimum of seven years to train a physician. So there's not a quick fix there. And one thing we haven't mentioned is that HR1 also restricts the loans going to other medical professions.

And in particular the limits set for PA programs and NP programs are half what they are for medical school or dental school. And you can produce a PA or an NP a lot faster than you can produce a physician and

Dr. Muta and then the Lao sorry, yeah, I think that the.

So I think that point is an important one, is that we have plenty of people who would like to go to school here.

We don't have capacity, and capacity is hard to turn on quickly, partly because of duration of training, but you also need faculty to be able to do the training and you need clinical sites for people to be able to do training.

So I think there's a cascading effect that it takes quite a bit of planning to be able to increase.

And what we've been seeing, partly because of affordability, which is part of our topic here, is that there are students who will take themselves out of the equation because it's just not an affordable option, even with the value that UC offers relative to.

Because even our educational deb, which is at 150k for our students, and you compare that to the median debt for us for across the nation, which is 200, we have a great value, we have a great product. It's just not enough. I think the other piece we haven't talked about, there are societal trends that are increasing demand.

We have an aging population with more complex chronic illnesses, emergency room care that has gone up. And then you add onto it the other consequences that we expect to see with HR1 and other changes that are occurring. And the demand is not going down.

So our demand is up, complexity is up, and it takes more of a workforce as a result.

Assemblymember Stefanie oh, I'm sorry, the LAO. I know you have important information.

My fault. I just wanted to again throw some more nuance into the discussion.

So don't mean to complicate your policy thinking on this, but you know, the question you raise really gets at one of the fundamental policy questions about how to address the physician workforce, because the education and training pipeline is multifaceted, has several steps to it, and where you spend your time focusing on can have different sort of effects.

And your next issue is really going to focus on the sort of residency side. Right now you're focused on the medical school side and it's tough to know where to target resources. So as you as you say it is the case that California has per capita relatively low number of medical school slots compared to most states.

We tend to be a bit more, if my memory is correct, a bit more on the average when it comes to resident slots per capita. And as it turns out, our residence slots are pretty high demand, too. We are generally able to fill most residency slots in California.

And as you've heard, most residents in California tend to stay in California. So, you know, does building more medical schools necessarily get you more physicians? It's, it's not, it's not, it's not clear that that's, that's more effective than, say, adding more residency slots. So that's, this is, again, where to think about how to target limited resources.

It just makes it complicated because there's multiple places you could point to and they could have potentially different effects.

Understood. Thank you.

Assemblymember STEPHANIE thank you.

Chair Addison thank you for this information. I am too curious around the lack of medical students spots we have in the state of California. When you look at the fact that we need, what, 10,500 primary care providers by 2030.

And I am lucky that I'm from San Francisco, so I get the benefit of UCSF if I or anyone in my family needs medical care there. I also grew up in Merced, California. So I am very excited to see the investments that have been made in Merced with UC Merced.

And I know that UCSF has partnered, as you said, with UC Merced. And I just would like to know more information.

I don't have to have it now, but going forward, why aren't we investing more in a possible medical school at UC Merced is in the rural area where we need access to better medical care, where people don't have residencies? It just seems to me that we have invested so much in this UC campus.

We know that this is a problem in terms of creating more space to train our future doctors here in California. So they stay.

Is there a report or something you could point to that I could read up on as to the partnership that UCSF has with Merced and the Fresno campus, as well as to better understand how we may be how what we should be doing as the California State Legislature to invest in that resource?

Yes, we'd be happy to get you information afterwards. But you're right, there's a pretty robust relationship with ucsf, with Fresno that UCSF has had and an increased focus on the San Joaquin region.

Also with the with the notion of again, grow your own because they will then be more likely to be distributed in the areas that we need. But we can get you that information as a follow up.

Any other Member questions?

Oh yeah, please. To that point, I know that there's also an effort in the Stockton area to be able to really take advantage of some of the higher education institutions we have there. And we have a champion in Assembly Member ransom around that particular effort.

So I think that that should be a part of what I'm thinking about. I just wanted to kind of state for the record around the question that you raised around medical students and kind of where we put our resources.

If it's the case that California has 23 medical students per 100,000 population and the national average is 41 per 100,000 nationally, it seems that it's a pretty critical part of the pipeline to get us at least somewhere near the national average, given the fact that we are one of the largest states providing medical care in the country.

Just, I think, something for us all to reckon with.

I'll just make one final comment before we go to public comment, which is, you know, this hearing came together and maybe for Members on the dais as well, to put this in context for all of us as well as for the public who's watching. This hearing really came together because of two things.

One, my own living on the Central coast, not being able to get a doctor. Many of my friends and families who can't see a doctor. Dr. Hartzog just talked about finally going concierge for your pediatrician because you, you can't get a doctor who stays.

And story after story of I had a doctor, they left, I got another one, they left 234 doctors in. You can't find someone. And I would say that's ubiquitous from Santa Cruz, certainly Santa Cruz, to San Luis Obispo. But also we did an informal survey. All of you, I think, filled it out among Members.

And the number one thing Members of the Legislature said in terms of importance in healthcare was being able to see a doctor when I need one.

And I would say that's representative of their constituents, their 40 million constituents across the state of California who are bringing these issues up, whether it's, I have insurance and I can't get a doctor, I've lost insurance and I can't get a doctor. My status is I'm undocumented, I'm not going to be able to have medical anymore.

There's a whole host of things. But if we boil it down, it's how are we going to be able to see a doctor if we need one? California has done some work in this area.

And in terms of expansion, Dr. Hartzog is part of bringing that expansion to one of our UCs, to UC Santa Cruz via UC Davis. So there are programs that are in process right now that continue. But I think there's really two ways that we can support getting more doctors in.

One is how do we pay for med school? Help those kids or those young people not self select out because of affordability. Help them self select in because they know there's going to be a pathway.

And so that's been the topic of this hearing is what do we do on the med school loan face of it, And I think the LAO summed it up really well, saying there's the med school loan piece, there's where the programs are and then there's the residencies. So this sort of three prong approach.

So we're just now going to take public comment on this piece which is focused on med school loans, and then we're going to talk in a robust way around residencies and the importance of how we maneuver our residencies in California to be able to support bringing more physicians and all of us being able to see a doctor when we need one.

With that, I'll open up to public comment on this item. If there's anyone in the audience with public comment, it.

Good afternoon, Madam Chair. Just a comment I heard in the presentation talking about loans. I believe 80% of the loans are more focused on primary care and then there's 20% that could go to other specialties. And I guess part of there is a problem. Of course, I come from a rural community, so I recognize.

So family physicians, internal medicine people, pediatricians, obstetricians, gynecologists, emergency medicine folks, all have complicated patients that sometimes need surgery because I heard surgeons in that as a piece of that too. What I didn't hear was anesthesiologists. So I'm representing the California Society of Anesthesiology here. There is an acute shortage of anesthesiologists in California and nationwide.

As a matter of fact, there's like 3,800 applicants last year for 2,300 slots. And so the idea that people, we want to attract people to California here, if there aren't slots and there isn't the resources to help train and help people here, how are we going to do that?

So I guess my plea is if you start thinking about loan programs and things, start thinking about Anesthesia as well, because that is integral to providing health care, especially in rural communities. Thank you.

I usually don't respond to public comment, but I want to welcome Dr. Wood back to the green carpet and wonderful to see you.

Good afternoon, chair and Members. Omar altamimi here with CPEN the California Pan Ethnic Health Network. HR1 policy changes will likely result in an even less diverse physician workforce as the impact of reducing loan repayment funding will fall disproportionately on communities of color.

We encourage the Legislature to ensure that state programs modify their priorities to fill the specific graphic, to fill the specific GAPs created by HR1 and to provide targeted support to trainees who will help to fill the cultural and linguistic gaps in the workforce.

We must increase the use of and support the development of primary care teams that include physician and non physician providers, including community health workers, promotoras and community health representatives. Recognizing that millions may lose medical state programs also need to support future providers and safety net programs that serve Californians who are underinsured or uninsured. Thank you.

Thank you for convening this hearing focused on workforce as it truly is one of the biggest challenges that is impacting access to care. My name is Katie Layton. I'm testifying on behalf of the Children's specialty Care Coalition to speak specifically, specifically about the growing workforce crisis within the pediatric specialty physician network.

Nationally, a number of pediatric specialty fellowship slots are either at or below 50% filled, and those trends are mirrored here In California. Pediatric specialists undergo years of additional training and often incur substantial student loan debt, yet they earn markedly less than their adult counterparts due to the high volume of Medi.

California pediatric specialists are not necessarily eligible for some of the programs discussed here today. However, loan repayment under Prop 56 and graduate medical education dollars under Calmed Force plus have both served as a lifeline to support this pipeline of physicians.

Unfortunately, the funding for the Prop 56 loan repayment program has dried up and the GME plus funding will terminate come the end of the current MCO tax in 2026. And certainly the addition of loan caps under HR1 will make it more difficult to choose to go into pediatric subspecialty.

So really just want to commend this Committee for exploring ways to support these programs in the face of federal uncertainty and urge you to continue looking at ways to leverage these solutions which will ultimately result in better access for patients, including children and youth with medical complexity. Thanks.

Hello Committee, I'm Patricia Eatum, Vice President for Southern California and Coachella Valley with Health Career Connection and also here representing Inland Empire Health Plan Leadership Network. And I just first want to say for the loans please consider new strands to have public service loans so that factored into the loan repayment also are the HPSAs.

I think it's really so crucial and for so many other practices in addition to MD primary care. But do PAs nurse practitioners really important? Our organization works with many health pathway programs including the UCSF Fresno, but UCR School of Medicine, the California Medicine Scholars Program, UCLA prime and Prep, all the UCLA programs and Charles Drew.

They have great pathways and that sort of leads to the pipeline.

So as you are also considering just the loan component, please do keep in mind that these pathways are so essential for building the confidence of underrepresented individuals to believe they can make it because they get the mentoring they need and the strategy they need on how to succeed and truly enter medical school.

We work so much in pathways and I think that perhaps for maybe the short term for some of the medical slots that need opening, consider consortia. I know that there are consortia like with different states and so you could have rotations and consortia spots that might help as you're building out other medical schools.

But I really want to thank the Committee and HR1 is going to be tough in so many ways. But please with bonds, I mean like literally please think bonds and think out of the box to make it possible for our young talent and the talent talent is Here. It's here in California.

And look forward to having our whole coalitions work with you all to help solve the problem. Thank you.

Good evening. Chair and Members of the Committee Sosin Madinat here today on behalf of the California Nurse Midwives association, we attend 1200 Pardon me representing the 1200 CNMs in the state who attend 13% of the state's births, many who are working in maternity care deserts and fill in provider gaps.

I just want to say thank you to the chair and Members for convening this important hearing today. Understanding that we're focused on physicians today and have future hearings on the broader impacts of HR1, we wanted to highlight the important role midwives play in the face of these physician workforce challenges.

We often work in partner but in many cases fill the OBGYN provider gaps in more rural communities. And even before the passage of HR1, given that there was a severe maternity crisis with L and D units closing and maternity wards closing in the state, nurse midwives really do step up and fill in those gaps.

And we're really concerned about HR1 further accelerating these challenges and these student loan caps significantly affect nurses in the profession.

As to thank Members of this Committee, Assembly Member Banta, Assembly Member Stephanie and others who signed on to the legislator sign on letter that we actually submitted to the Department of Ed on this specific issue and we consider the threats to physician as we consider the threats to the physician workforce, we want to urge legislators to take a diversified approach on addressing the issues to provide care to communities in the state.

And I will say last year CNMA sponsored AB 836 with Assemblymember Stephanie to study the barriers to establishing and sustaining midwifery education programs in the state and SB 520 with Senator Caballero to create a grant program on midwifery workforce education programs and really just want to say that a sound workforce strategy requires simultaneous coordinated investment across workforces.

So we really appreciate your time and attention to this and the partnership of our physicians. Thank you.

My name is Dennis Mazur. I have only one question and one message from Ukraine. I'm a tourist visit Sacramento only three days and now we have a black man's history in all the world 100 years ago. My country 100 years ago too have a culture revolution in the world.

I from a small town in Ukraine where Mykula Leontovich write music and text Carol of the Bells and these songs traveling around the world 100 years ago and help be people happy in the world 100 years and now every year and small 20 with 5 second message from Ukraine. No,

But I. But we do want to thank you. Yeah, yeah. No, we want to thank you. No, that's amazing. We appreciate you coming to visit California and our hearts are absolutely with the people in Ukraine, all of us. And we're going to.

We're in the middle of a health care hearing, but wanted to hear what you have to say because you've traveled a great distance and just really appreciate everything that you're doing. And welcome to California State Legislature.

Thank you.

Thank you. We're going to close that first portion of our hearing on medical school loans in the face of HR1 and how we're going to navigate that. And we're going to move on to the second panel, which is really focused on residency and invite.

Say thank you to our panelists and thank you to those who traveled to come here to be able to present. Excuse me. And move on to our second panel and panelists. I'm sifting through my notes here to see if I've got us off track. Here we go.

So our issue two is oversight of a program called Calmed Force as well as the Song Brown program. Both of these are residency programs. And we have at the table with us the, the University of California, the Legislative Analyst Office, the California Academy of Family Physicians, Department of Healthcare Access and Information, and Department of Finance.

Although it looks like we're missing somebody because I named five people and there's four up here at the moment. But what we'd like to do is start with an overview and update on calmedforce and then welcome back Dr. Muntah from UCSF. Then we'll move on to a presentation from HCAI with an overview and update on Song Brown.

And then we will move to the Lao. And then Dr. Robert Acebey Esebey. Thank you. Who's going to talk about additional perspectives on the state's GME investments. And just as a reminder, we looked at this hearing through two parts. What can we do to help kids pay students pay for medical school?

And then what can we do to increase residencies? And how is that affecting physician access across California? So please, let's go ahead and start with the update on CalmedForce and Dr. Muntaha.

A couple things that I will highlight, and I think many of you know this, so I won't belabor some of it. I think it's worth calling out that CalMed Force has different funding streams that support it. There's CalMed Force and CalMed Force Plus. So, CalMed Force has been in inception since 2018 with prop 56.

It supported a net increase of about 514 residency slots. These are new and expanding slots in the state and CalMed Force Pplus is newer. It is—the difference in the designation is simply the plus, but the intention is quite different and I'll describe that in a moment. That is funded by Prop 35.

That is the one that we've already said is at risk with HR 1. It prioritizes—the advantage of CalMed Force Plus was that it prioritizes funding for new in expanded residency positions. And one of the things that will probably become very clear in this conversation is that residency training program takes a lot of resources.

It is—not only is it a multiyear experience, from three to seven years for the trainee, it requires a planning period before that for the institution to develop the capacity to get the appropriate educators in place, sites in place, all of the training that is required to meet accreditation requirements.

So, it's quite extensive, takes multiple years, hence the need to not only invest in expanding new ones, but to think about—sorry, not only expanding existing residency training programs but new ones. So, in the inaugural cycle, CalMed Force Plus awarded 127 new residency slots across high need medical specialties.

And we will hear a little bit more about the differentiation, the criteria that are used. I will suffice it to say sort of at a high level, I think they're detailed in the other materials that the intention has been to look at places of highest need, first by profession, by the type of residency training we're talking about.

You've heard that we are focused primarily on primary care. It talked about broadly—so, it includes emergency medicine in that and also pediatrics. And that was the original investment with CalMed Force. With CalMed Force Plus, it's expanded a little bit further.

And what we'll—and what we try to do with both of these is that we are very intentional, not only about are the resources going to places of higher need and of the professions that have been identified as being higher need, but are they also going to geographic regions where the need is?

And so, you'll see that in some of the data, and we can talk more about that. The—in terms of commitment and how far these resources go, they sadly don't cover the full cost of training. That's probably the most important thing to take away. They cover about 50% of what it takes to train an individual resident clinician.

And that is going really—and those are sort of really parsed out. There are other resources that have traditionally come to support graduate medical education from Medicare, from HRSA in some cases, but those are limited. And there has been—the other thing I think to take away now is that there is a great deal of volatility in this funding support.

So, for the funding that came from Prop 56, what you saw in the materials, if you've had a chance to look at those, is this declining revenue, which should be proud of that, which means that people are healthier, but it means that there's declining revenue and there is not the capacity for the state to backfill, which it did originally to try to meet the initial intent.

And with the 75,000—75 million—that HCAI mentioned earlier in their comments, that have been identified for Prop 30—oh my gosh, 35, thank you—those are, we can count on two years and that's it.

So, we're talking about having launched, we're talking about trying to really put training programs in places of highest need and to be resourced to some degree to be able to actually fully meet their obligation for training residents so that our communities have highly trained, highly skilled clinicians available to them across the spectrum of things.

And the last call out I will say is one of the big advantages, and we don't track this fully from residence trainee to health benefit, but we have great data nationally that show us that an investment in primary care actually leads to longer lifespans. I'll stop there.

Thank you, and we'll move on to a presentation from...on Song Brown.

Absolutely. Thank you very much. I'll give just a very brief overview and then of course, happy to answer any questions. Established in 1973, the Song Brown Program aims to expand and support primary care residency training in California, with the ultimate aim of increasing the workforce that serves underserved populations.

Programs in family medicine, internal medicine, pediatrics, and obstetrics and gynecology are eligible for funding and are scored on a number of criteria, including how much of their training takes place in shortage areas or in Medi-Cal settings, and whether their graduates continue practicing in primary care and in underserved settings.

The Song Brown Program receives $33 million in General Fund annually, and the program funds four types of awards, each with fixed appropriations. So, of that 33 million, 31 million is for program and that breaks down to 18.7 million for existing primary care slots, 5.7 million for existing slots in teaching health centers specifically, 3.3 million for new slots in existing programs.

We call that our expansion track. And then 3.3 million for new programs, starting from scratch. And the numbers are important, but I also just thought to share a nice bright spot in our recent round of awards.

We did fund, under that new residency program track, a new family medicine program in Del Norte County. So, nice to share that we are reaching rural communities. Over the last five program years, Song Brown has funded 1,150 existing slots and 412 new or expansion slots.

And just noting, again, that our ability to fund new or expansion is prescribed in appropriation.

Thank you. And we'll move on now to LAO for an assessment of both programs.

Great. Thank you. Jason Constantouros, LAO, and we're speaking from this handout here, which may be in your materials. And just for context, this handout is the culmination of work we did over the summer to dig more into the Song Brown and CalMed Force Programs.

And we did this to help better answer questions we have gotten from Members over the years about these programs. The handout has a number of—a fair amount of background and findings. Staff asked us to kind of skip ahead to our assessment just for the sake of time. So, I'm going to go ahead and do that.

And you can actually find our assessment starting on page 15 of the handout where it says issues for legislative consideration. And in our view, there really are three key questions before the Legislature around Song Brown and CalMed Force.

And the first issue is really a topic you covered in issue one to some extent, which is should supporting residency programs be a high budget priority, particularly in light of the fiscal constraints facing the state?

And, you know, as we summarize here on page 15, there have been a number of studies that have documented certain workforce concerns, particularly in some cases statewide, supply and demand issues, also regional disparities. And also, HCAI is currently in the process of further revamping its workforce analyses.

The state may have even more detailed workforce analysis and projections around the medical workforce, specifically in the coming years. So, that might help the state even further understand kind of the specific needs. So, you know, the question is, well, if you support residency programs, will that help the state with its physician supply issue?

And you know, as I said, as I said in the last issue, it really is difficult to gauge. The physician pipeline has multiple stages to it. And then there's medical school and then there's residency.

There is data that show that, you know, most residents in the state stay here after completing the residency. We're not aware of as much data on whether or not those positions, you know, how many residents stay in their local communities after completing.

As we noted, there are other strategies the state has been pursuing, like loan repayments and more recruitment in medical school. And so, these would be strategies to weigh as you're thinking about your priorities.

But assuming that residency programs are a high priority for the Legislature, the next question is, are these particular programs, Song Brown and CalMed Force, the best way to support residency slots? And we start that—we start our assessment on that on page 16 of your handout.

And we try to get at this, looking at a number of things. The first question we try to answer is have these programs actually resulted in the state having more residency slots? And to do that, that's really what that figure on the bottom of page 16 is trying to get at.

And it's a little bit of a complicated figure, but to explain it, it shows the percent change each year in residency slots for different medical areas. I apologize for the small font too. And it's that dark brown, that dark line, is really the national trend, and the light line is the California trend.

And then, that vertical line there marks the 2017 year. That's when the state began expanding funding for Song Brown and CalMed Force. And so, the question is, starting at that point, do we change in trend in the state relative to the national trend?

And generally what you see in the graph is there isn't that much of a difference across most areas. The one notable difference is obstetrics and gynecology, where you do see a relatively large increase, but other than that, they seem to more aligned with national trends.

That isn't terribly surprising if you consider that the grant programs mostly focus on existing slots, particularly Song Brown. And also, as noted, the programs—the grants—are not funding the entire cost of a slot. And so, programs do have to find other sources to support the slots. That said, this is an initial analysis. It's not definitive.

One thing we can't rule out in this kind of analysis is that the grants didn't result in—didn't prevent like notable declines in residency slots. So, there's still some uncertainty on the overall effect. Turning to page 17, the other question we asked as well is having a competitive grant process generally the best way to support residency slots?

And in concept, competition makes some sense because you're taking limited resources and targeting them to the highest sort of beneficiaries. But we found two things that sort of question whether a competitive process really was the most effective strategy, and that is that most of the applicants tend to get an award.

And also, of those who get an award, most get it in more than one year. And so, for a lot of residency programs, these grants end up looking like operating funds that they're relying on for multiple years.

And if this really is more of an operating, ongoing fund source, perhaps there are other strategies the state could consider than competitive grants. For example, expanding funding in the Medi Cal program. That's easy to say. There's a lot involved in thinking about changes to Medi Cal, particularly in light of HR 1.

But these are strategies the state could explore. Then, kind of the third issue is, okay, if you say that—if the Legislature were to decide that residency slots are a high priority and it wants to support these programs, are these programs designed in the best way?

We found two potential issues with the design of these programs that we think the Legislature could consider. The first is that these programs have somewhat rigid structures in place. They focus on some medical areas, but not others, even though in some medical areas, like psychiatry, there have been documented workforce issues.

And then, also, in the case of Song Brown, as noted, it's even more rigid because the budget bill Language really specifies how much funding has to go each year for new slots versus existing slots. And this is an arrangement that was worked out several years ago.

But with such a rigid structure in place, it might not be as adaptable to sort of changing state workforce needs. So, the Legislature could explore ways to add more flexibility to the programs. If it were to do that, it could also look at the advisory councils that help oversee these programs and ensure that they're somewhat independent and are able to provide a good analysis to help guide the programs.

And then finally, we also noted that there are some coordination issues with these programs. And this is something we've said in the past.

These programs are very similar. There's a lot of overlap. We have a figure on page 12 that really shows how much overlap there is between the grant recipients between each program, but it's a fair amount. Fundamentally, when you have two programs doing similar things, there's some inefficiency there because you're paying for more administrative cost.

It also raises the possibility that there could be some coordination issues, and we did hear some when we met with residency programs. For example, one of the things we've heard from some residency programs is they use the Song Brown and the CalMed Force grants somewhat differently.

The Song Brown grants are more for sort of direct costs, like resident stipends. CalMed Force grants tend to be used more for kind of the more indirect costs like sort of wellness programs and outreach and other activities like that. And it didn't appear that there was a strong sort of strategic basis for these differences.

And so, we think if the Legislature wanted to continue with these programs, it could consider ways to either consolidate or coordinate them or to differentiate them or a mix of that. So, for example, could the programs have a single advisory board that really advises across both programs?

Or alternatively, could the state lean more into the sort of CalMed Force Plus approach of having one program focus more on primary care, another focused on specialty care? These would be things to explore as you're thinking about your budget priorities. Thank you.

And I understand, DOF, we didn't ask you to present, but you're here for questions afterwards in case anyone has finance questions. So, we'll move on to Dr. Robert Acibe from the association, excuse me, from the Academy of Family Physicians.

Thank you. Good afternoon, Chair and Members. Thank you for the opportunity to speak today. My name is Dr. Rob Acibe and I'm a Board-Certified Family Medicine Physician and currently serve as an urgent care physician and home-based care physician providing care to our elderly population who are unable to make it to the clinics due to various reasons and not concierge medicine. And I'm also, additionally, a Board Member of the California Academy of Family Physicians.

So, additionally, as a former Associate Program Director, residency program, I spent years training residents and students and I'm here today to discuss a critical role that the state needs to play in supporting physician graduate medical education programs. So, primary care is the foundation of a functional healthcare system. Family medicine is uniquely positioned within the primary care setting.

Family physicians are trained to provide comprehensive, continuous care across the lifespan, from delivering babies to caring for seniors. Unlike other primary care specialties that focus on specific age group, family medicine physicians care for patients of all ages, often treating multiple complex comorbid conditions within generations of the same family.

We manage chronic diseases, provide preventative services, coordinate specialty care, and serve as a first point of contact for many patients, making family medicine especially vital in rural and underserved communities. Like has been stated earlier, research consistently shows that communities with more primary care physicians have better health outcomes and lower health care costs and reduce healthcare disparities.

Unfortunately, we know California faces a severe primary care physician shortage. The demand for primary care physicians will continue to grow as the population ages, particularly given that the primary care workforce itself is nearing retirement. And while we're graduating a lot of medical students in California, we don't have enough residency slots, as been stated earlier, for training.

So, a lot of them end up in other states. Since physicians do tend to stay where they train, many of these physicians do—do not return to California. Furthermore, systemic problems make expanding primary care workforce especially challenging.

The systems in place incentivizes physicians to specialize, contributing to a shortage of primary care physicians who face lower reimbursement, significant administrative burden, and high rates of burnout. The reason? Federal policy changes and funding cuts to student loan repayment programs and Medicaid are intensifying the existing barriers to primary care physician recruitment, training, and education.

One important step toward increasing the number of primary care physicians is increasing the number of residency slots. Investing in new residency positions in underserved community increases the access to care in the short term while also addressing long term workforce needs, given that a majority of the physicians practice in the same region where they complete their residency.

As stated, Song Brown Program is the only state GME program that directs exclusively to primary care residency programs and is the only GME program that takes into consideration recruiting minority physicians like myself. I'm originally from LA and I'm a direct product of the Song Brown Program.

I trained at a residency program not too far from here in Stockton, California, and stayed on to practice in that community that trained me as a Faculty and Associate Program Director to take care of that community additionally to recruit others, students, to do the same.

And to be quite frank, the Song Brown Program is the reason that program still exists. Approximately half of the graduates supported by Song Brown programs have gone on to practice in the areas of unmet need, so dependable and consistent funding for this program is essential to ensure sustainability and predictable funding for the family medicine training in California.

Additionally, CalMed Force and CalMedForce Plus programs are also important to support GME programs. Public funding for these programs should be strategically invested in the most cost-effective manner possible by prioritizing resident programs in the areas of highest need and specialties facing the most significant shortages, particularly primary care.

Primary care is associated with improved health outcomes as stated earlier, so targeting state funding toward primary care residency expansion is therefore not only responsive to documented workforce shortages but also represents prudent and high value investments in the state's long term health system sustainability.

In the last cycle, 60% of CalMed Force Plus awards went to specialty residency programs including a plastic surgery program. Given the state's limited resources and significant unmet need in primary care, future funding decisions should be determined in a data driven way to more deliberately align with the workforce gaps and statewide access challenges.

There is also uncertainty surrounding the revenue sources funding these programs, creating an unclear picture for the future. In conclusion, primary care is not a luxury; it is the backbone of a high functioning, equitable, and cost-effective health care system.

If we do not act now and strengthen the primary care workforce pipeline, shortages will deepen, access gaps will widen, and communities like mine in the San Joaquin Valley will continue to struggle to meet basic healthcare needs.

The state has both the responsibility and the opportunity to lead by ensuring sustained funding for Song Brown Program, directing CalMed force investments toward primary care and those high need communities, and securing stable, long term support for graduate medical education. Every primary care residency slot is an investment in healthier communities and a stronger, more sustainable health care system.

I respectfully urge you to prioritize funding for primary care residency programs in line with the state's greatest workforce needs. Thank you for your time and I'm happy to answer any additional questions.

Thank you. We're going to go to questions from the dais and public comment. I do have a question. I didn't bring it—excuse me—I didn't bring it up in the first panel, but you know, one of the things that we're facing under HR 1 is an expectation of overloaded emergency rooms.

I'm just wondering if anyone can add some context around what the lack of primary care physicians is doing when it comes to people who still need to go to the doctor. So, again, we've talked in many other hearings around the cliff we're facing around undocumented care, around cuts to Medi Cal, around cuts to Covered California.

But we also have this other problem where people have insurance and they still can't get a primary care doctor. And what is that doing to our emergency room situation that's going to be exacerbated with HR 1?

Happy to speak to it. You're absolutely right. The demand isn't going away. The opportunity for having a place to go is going away. And in some cases, you know, many of our institutions are required and obligated to see whoever comes in for care. So, there are double digit increases already in the volume in emergency departments.

Part of it is seasonal, with the flu season, but not all of it is and we expect it to get worse. That is what has happened historically in the past when insurance and access, as a result of not having insurance, occur. So, expect that it gets worse.

We know it's already a little bit of a release valve for people who need to get care. Urgent care is often not used in the same way that emergency room is.

Some of it is, I think also public education about where people choose to go, where they think they can get care, and how quickly they can get care. So, the increases are already happening, and we expect that they'll continue and worsen.

And our obligation in those settings is to provide care, which has a financial implication then for our institutions.

And are you seeing in areas where there's just not enough family physicians, regardless of the insurance situation, where there's just not enough family physicians or people using the ER as their primary care, or is that?

Yeah, it seems that people are doing both. They're using the ER and they're using the urgent care a lot. Like I said, I also practice in urgent care setting and a lot of patients are coming because they're out of their medications.

Medications have been out, their blood pressures are now extremely elevated, is increasing risk for stroke or other major conditions. And they don't want to go to the ER because they know the ERs are now full and taking 7, 8 hours to be seen. So, now, they're coming to the urgent care.

We used to be less than 30 minutes or an hour to be seen. Now it's taking two hours, two and a half hours, for patients to be seen. And it is creating a significant burden on those patients and even the providers in those urgent care settings.

So, what's happening is it's a bottleneck everywhere and a lot of patients then will just stop going in and then you're going to get a lot more patients coming in extremely sick, where they end up getting hospitalized a lot faster and then increasing in health care dollars.

And I heard, I mean, we've heard the figure on both panels that residencies, 80% of folks who do their residencies end up staying in California.

When I look at the county by county data, I'm seeing 35 counties out of 58 where CalMed Force is helping fund residencies and then 19 counties out of Song Brown, not 19 additional, 19 that overlap, that are helping fund residencies. And so, at a minimum, there's 23 counties that don't have—don't benefit from these programs.

There's residencies not going into these programs that are funded through Song Brown are funded through CalMed Force. And I'm just wondering ideas on addressing that geographic inequity, knowing that we talk a lot about highest need, but I think there's changes in what we might now determine highest need.

I think a lot of us have an impression that highest need equates to lowest income, but I think actually a lot of our counties just don't even have programs that can bring residencies in, which is having an overall effect, and I would sort of suggest those are highest need areas.

But what ideas from anyone at the table to create more geographic equity in terms of how those state dollars are going to support residents?

Do you want to go?

Sure. I'd be happy to share two thoughts from HCAI. So, I think I would just, one, point back to the issue that we are limited by appropriations and how much we can fund new programs. And so, part of, I would say a constraint is that we can only fund where there are already programs.

So, I think what you're asking about is, you know, how can we get funding to the counties that may not have programs or might, you know, face those kind of—kinds—of constraints? We are, we are constrained by appropriations and our ability to do that. To the second way, I would sort of answer that question, how can we think about getting programs where we face the greatest need?

The LAO mentioned this. We are in the process or we're hoping to start some supply and demand modeling for both primary care workforce and maternal health workforce.

So, right now, and a lot of the data that are cited in some of the handouts and even on my answers are around physician to population ratios. That's one way to think about sort of access and equity, but it's not our best way.

And so, we are, at HCAI, planning to develop supply and demand models which will help us see where is that greatest need. So it's not just about distribution, it's about, as Dr. Mutha has mentioned, service demand a number of times. Where do we see the greatest demand compared to the biggest gaps in workforce?

So, we intend to develop models for primary care and for maternal health. Importantly, those will be sort of team-based approaches. So, for primary care, we'll be looking at physicians, but also nurse practitioners and physician assistants. For maternal health, we'll be looking at OB/GYN, but also certified nurse midwives.

And then the intention is to use the outputs of those models to guide our Song Brown funding and other education capacity expansion funding, as well as loan repayment. So, we've done that for our Song Brown nursing program.

We developed a Song Brown—I mean a nursing supply and demand model—last year and integrated that to actually make decisions about where our Song Brown funding goes. That's a promising strategy we intend to follow.

And what's the timing on those models being ready, do you think?

So, we hope to use the funds from Rural Health Transformation, which we're still in budget negotiations with CMS. You're probably familiar with the Rural Health Transformation Program. That's how we're going to fund the development of these models. We hope to have a sort of quick beta version for decision making by mid this year.

We hope to have a robust version by the end of this year or early next.

Any other ideas?

I think there's a few things worth calling out here, this issue of what the statute allows for each of these programs. So, just, we'll call it out. So, for Song Brown, it prioritizes family medicine, as you well know. CalMed Force, by statute, supports primary care and emergency medicine.

And I think you start to see this evolution with CalMed Force Plus, which says, we understand the environment is changing, we understand the specialties that are needed are changing. So, for CalMed Force Plus, it extends to new and expanding because we know there's a cost associated.

A typical program, sort of the cost per resident is about 300,000 and these programs are paying between 40 to 50% of that cost. So, the institution has to find other avenues, whether it's institutional resources, federal resources, philanthropic, whatever they are, in order to do that.

So, with CalMed Force Plus, it expanded to ACGME-approved specialties that are psychiatry, general surgery. You've already heard about that there's shortages there and then other ones. And they're really—the idea is to align the funding with high demand specialties for Medi Cal patients. So, there is an intent to try to do that.

And I think it makes sense long term to be really thinking about population needs and how to align those with those resources. Then one last comment is I think what is hard about graduate medical education, it's not a you build a system and then it continues in those resources, stay there and sort of allow the system to work.

These resources are very much dependent on the humans that are going through the programs, which means that you have recurring costs in addition to capacity and capital cost to build the programs. And those are magnified, I think, in rural and geographic areas.

It takes great expertise to actually design an approved GME program and then the resources to build all of the services and components of that program so that they meet accreditation, because that's what we want and need, and can be sustained over time.

Anything else? No? Please.

Well, I, I was thinking about your question. I think one of the key policy issues with financing residency programs is that the current structure is really focused on programs that have a high intensity of Medicare inpatient services, because that is how Medicare supports residency programs.

And so, a lot of—you know, there have been some efforts to try to, you know, find other ways to support in different settings. And that could be one thing to think about. That's also important to understand the impact of new funding for new programs is it's not just the startup, as sort of was indicated.

It often works best when the program has the ability to draw down more Medicaid dollars over the long run to help support ongoing costs. And actually, there's an advantage to that. Medicare caps generally programs that the slots they were at in the late 1990s. But for new programs, there's actually a grace period before you hit your slot.

So, that, you know, that was sort of the strategy with the new programs. But there are those limitations that sort of need to be thinked about. And so, that that's tended to be kind of the sort of key barriers and issues to sort of address with the, with the new grants.

Got it. Anything else? Okay. Oh, please.

I was going to say one thing just to piggyback on what was just being said in regards to these caps and Medicare. So, my residency program, there's three residency programs there: Internal Medicine, Surgery, and Family Medicine. And the caps were set back in the 90s and there was about 45 residency slots that were set back then.

There are currently 77 residency slots. And the institution has to then subsidize the remaining difference. And what they do is they're going to prioritize the ones that they feel are more high revenue or make them more money. So, Surgery and Internal Medicine receive a majority of our slots.

We had eight residency slots per year and about three of them are funded by our caps. And the remaining was Song Brown and CalMed Force.

Reason why I stated earlier that if wasn't for Song Brown and CalMed Force, our residency program may not be able to serve an underserved community like the Stockton community, where we have 86% of Medi Cal patients and less than 10% of Medicare patients in our institutions. The residency funding is not there.

So, these programs are very vital to that.

Thank you for that. Any questions? Assemblymember Solache hasn't talked—hasn't asked yet.

Thank you.

Turn it to you. And then Assemblymember Bonta. Yeah, exactly.

Thank you, Madam Chair. To your point, every time I come to a hearing, I feel more inspired and excited about the subject matter. In fact, Dr. Acibe, his story, his journey was pretty inspiring and the fact that he's been doing a lot of good work in community space.

It's good to hear those, those, those moments, look at those success stories, so thank you for sharing that. I mean, I want to take one step back to the basic part of this conversation. Obviously, very intriguing to understand the, the, the complicity of how the resident program happened and what happens. You know, the numbers, but thank you for sharing the data.

But I take the one step back of what are we doing as a, as a state, as partners, to encourage students to get into these medical fields. Right?

I know we hear it as in higher education, we're hear it in college centers and high schools, but I wonder what else are we doing? So, I asked that general question. It's a little bit outside of this specific discussion but obviously related to how do we encourage young folks to get into these medical fields.

Obviously, the cost is an obstacle in itself, but I'm just curious to see if there's any data or any information, again, not today, that could be shared today, but just wanted to know there's.

If we could dive into that kind of part of the conversation because I think folks need to understand that this is, you know, it is attainable somehow and that there is possibilities.

Obviously, the data doesn't quite share that once you get into the medical field, but I just wonder if there's any current programs that maybe the state has or anything that, you know, that we have done in the past or are currently doing just for my own understanding and knowledge. But again, thank you for sharing your story.

Yeah, thank you for that question. We do have pipeline and pathway programs. I'd be happy to share some of the details of those. I don't have them in front of me. Funding for those is relatively small. However, we've found some ways to expand that, including in partnership with Covered California.

We recently just added 5 million this year for Pipeline and Pathway Program. We're also in the process of programming our BHSA, Behavioral Health Services Administration, dollars and thinking about how we can use that to fund Pipeline and Pathway for behavioral health services specifically. So, there's different ways that we do that.

And I'd be happy to share a snapshot of those programs.

Well, let's learn more. And again, the foundation part of these, these programs would be essential to, you know, the success of when they actually enter these programs, so, yeah.

Again, I think we'll follow up with you. But there—the factors that influence the decision of a medical student to choose a career are pretty well defined, including, do you have exposure and experience practicing in that setting? Which is, we've sort of, we've, we've touched on that. So, we'll be happy to get you some.

And I'm big on exposure because I took EMT class. And Lord, Lord knows this is not the field for me—clearly why I'm on this side of the aisle and not in the medical, not in a hospital.

And God bless our health care workers because just being in an ER room was very challenging for me, especially being germophobic was really hard. So, just put it into context that it's not for everyone, but for those that do appreciate the field, I want to be supportive, and we should be all, as California, supportive of folks. Right?

So, I just want to share my perspective of, you know, that not every field's for everyone. But thank you for sharing that.

If I might offer one opportunity, which is, I think you raised the question Chair at us about, well, what else could we be doing to help encourage things in the directions we want? And I think part of what you're starting to hear is part of that direction, which is what happens to these trainees? Where do they go?

How well can we track them? And I think we have some data from Song Brown.

We absolutely have data from CalMed Force, and CalMed Force Plus is too early to say, but we can start to look at that information of investments and how does that investment actually benefit community members and how does that match to what the Medi Cal penetration is in those areas, what the community health needs are in those areas.

So, I think there are ways we can design these things to align our incentives and our priorities. And we see that a little bit already with the Calmed Force Plus, it is a chance to say what we knew and what the priority was, which was primary care is critical.

And we all, I think, agree on the value of that. And there are other areas of need, psychiatry being a great example of one, that we are much more well versed, I think, in what the demand is and how it is completely outstrips capacity.

I appreciate that. And just to build on that, Assembly Member, it's really the primary question of why I wanted to do this hearing is one piece is how do we get students interested in medicine and for those that become interested, how do we make them see that this is viable?

Because it's the financing that often is the biggest hurdle. But Assemblymember Bonta, you had a question?

A couple questions. One is around the kind of LAO report on—I don't have my glasses. I think that's page four. Thank you for the graph. Actually, that looked like my last heart check.

But on page four, I think one of the points of information that is curious to me is that we actually don't have a lot of information about the extent to which private insurance is involved in funding and supporting residency programs.

Do you all have any visibility into how we might be able to get more accurate information about the extent to which private insurers are contributing to building our healthcare workforce and our residency programs?

An area of opportunity for us.

Yeah, I think this is a key question that, you know, it's been difficult to answer. I will say, anecdotally, we heard from residency programs that they were, in some cases, you know, not all. Some residency programs are like consortia that partner with hospitals to support the programs.

And what they typically said is they get some institutional support from the hospitals, and that it sounded like a lot of that was sort of net patient revenue coming from different sources. And it wasn't one pay or the other. It was just sort of, you know, just general institutional revenue.

And that might be how it looks like at some hospitals where it's just sort of operating funding that's going to that end. But it's hard to know. There isn't... Part of the challenge is a lot of the private, a lot of private insurance, there's sort of confidential agreements. So it's hard to, it's hard to have a lot of visibility.

Seems like an area of potential inquiry. I also just wanted to ask about the structure of these. It's actually three separate programs. And just given the fact that they will be around, although they are both attached to declining revenue sources, is there a sensibility around how those were structured in the first place?

Was there any coherence around the development of these different programs? And what should we be looking at in the Legislature around continuing to figure out how to create more of a streamlined approach, given the fact that there are, according to the LAO's report, significant administrative inefficiencies with these programs?

Yeah, I don't know that I can speak to that latter part, but I think I will talk about sort of what the effort has been to do, the coordination. So some of it is very much structural. So Dr. Deena McRae, who is not here today to represent UC, has a... We have...

There is a very strong working relationship between HCAI and also CalMedForce. And part of that is that Dr. McRae sits on the HCAI Healthcare Workforce Education and Training Council, which helps to coordinate a lot of these health workforce initiatives.

You heard earlier that by statute they are designed to sort of address different kinds of needs, whether it's new programs or expanding slots. And I think the one thing, probably the most important takeaway is I don't think that we have... I think the most important takeaway is really that we have insufficient funding and not...

I'm less concerned about duplication of service because of the distribution, what the statute, what room there is to make other changes. But we have such high need. If you look at the numbers of people who apply for this funding, it far outstrips the funding that is available just based on demand alone.

And then we could say, can you parse that a little bit more about what is duplicate? What are existing programs that are coming back to ask for additional funding? Part of that makes sense to me because these are ongoing needs to provide support for a program. But I think that the sheer number of applicants that we have seen for these programs is probably our best marker for what's the demand.

I'll certainly stipulate for sure that there is insufficient funding, given the prior panel and what we know to be true. I do think that one of the objectives that we need to be focused on this year is making sure that the funding that we are providing from the state is efficiently administered.

And to the extent that we need to make sure that we are engaged in cost savings and maximizing our efficiencies for the different kind of programming that we do offer, I think is one of the things that I certainly will be focused on in this capacity and I know is a prerogative and of deep concern to our Chair as well.

So I would love to kind of understand that a little bit more. And then my last question is to HCAI. Very intrigued and excited about this kind of market assessment that you are doing.

Was there, do you have a kind of a pipeline of different other analyses that you are looking at? Particularly around healthcare providers who support our pediatric focus, as well as health care providers that support our elders, given the fact that we have such a growing number of people who are our Silver Tsunami.

Yeah, it's a great question. I can share what is in the pipeline now. So we have conducted supply and demand analyses for the nursing workforce, irrespective of practice area, and then behavioral health. As I mentioned, primary care and maternal health workforce are next. We're actually in the process of completing and we're about to release oral health.

We do not have specific plans for the workforce that serves older adults, for example, or pediatrics. We are somewhat limited to what we can pursue based on sort of what we have funding for, which is why with the Rural Health Transformation money, we're looking at primary care and maternal health. Certainly open to feedback and further discussion. It's absolutely an area of need.

Just a statement on that. I think it's also important to recognize that, when we talk about these funds going toward primary care and specifically family physicians, we do serve pediatric patients, maternal patients and obstetrics, additionally geriatric patients.

So I think it's important that when we have these conversations about pediatric patients and who is serving pediatric patients, we do include family physicians in that conversations because that is one of the things that we do.

And I think that's one of the things that has helped me in my practice, especially even in the urgent care setting, being able to take care of babies. Additionally the geriatric patients.

A highly leveraged dollar. Thank you.

Any other questions? I guess I have one. One last financial question. I mean we've talked about volatility in funding streams, but what does that really mean in terms of the state and the future of these programs? We know 56 is declining. 35 is highly problematic under HR 1.

I don't think there's been very many allocations in the state budget. Certainly the program hasn't grown. You know, the allocations haven't grown. So I mean do we even, I guess just to be blunt, do we see the program surviving? And what, you know, like how dire is the situation in real life?

I think if you tie this... It's a great question. I think if you tie this to the question you had earlier about distribution of programs and where they are, I think it's very dire because there is no other funding source to pay for launching programs in geographic areas of need where they don't currently exist.

And expanding capacity in the programs we do have is one thing, but we already know from that distribution kind of they are heavily urban and heavily focused on sort of more specialized care. So I don't think there is any other funding source to make up for a gap like that I'm aware of.

Oh, go ahead please.

Well I can just share that for Song-Brown our funding is ongoing, 33 million per year, and we have received one time augmentations in the past that allowed us to expand our scale. So the numbers you see and some of the data we shared reflect those augmentations. So our ongoing 33 million would be at a slightly lower scale.

And from the finance folk, either LAO or DOF, anything to add in terms of how we can address these gaps?

Well, so you know, I guess I would say, you know, the programs really are different financing wise. Song-Brown, that really is dependent on General Fund appropriation. So that's really sort of the issue in terms of thinking about volatility. When it comes to CalMedForce, I believe the current funding level is just over 20 million a year from Prop 56. But it has been declining over time.

So in the long run you could expect the program to make have to make greater decisions around how many programs to provide an award for and also what's the size of the award. That that's typically the program's two key ways of sort of managing its funding levels. You know, again, you know, if it's just a straight funding issue, you're going to hear from us a lot on this this year.

But you know, the state does have sort of fiscal constraints and so it is going to fall a bit on your priorities. There were some years too where the, there was a period of time where the, where the Song-Brown program was, the Legislature ceased providing General Fund support. That was in the early 2000s.

And there were some years where they, where the program was able to rely on some other fund sources. We have a, we have a data fund that was a few million dollars. There were some private donations from the California Endowment.

So it also is the case that perhaps the programs might try to be a bit entrepreneurial and find other fund sources. But that's very uncertain and difficult to predict. So it is a bit uncertain, but the primary mechanisms in place are to adjust how many programs get an award and or what's the size of the award. And that's, those are really the key levers sort of in place.

Yeah. Joseph Donaldson, Department of Finance. So at this time the Governor's budget is not, does not include, you know, new significant kind of spending proposals. Is more focused on continuing the implementation of previous investments in the health care workforce.

Noting that kind of the budget situation we're in that, you know, where we're at right now, we're coming after three past budgets of dealing with difficult decisions of balancing the budget. You know, that being said though, the budget still maintains kind of past investments that have been focused in the realm of healthcare workforce.

Noting that since 2019 the state has invested over 1.9 billion in various healthcare workforce investments, whether it be at HCAI, Department of Public Health, or Department of Healthcare Services. And then statewide, the the state has invested nearly 3.6 billion related to workforce investments across a myriad of departments.

As my colleague from HCAI noted, there is funding to tune of 1.9 billion related to BH-CONNECT. And then there's also the one time award from the federal government related to the Rural Health Transformation Grant. That will be something the department is pursuing for these activities. So I just wanted to re highlight those investments.

I appreciate that. And we're about to move to public comment. I guess I would just close my comments by saying that I hope, as we are moving towards May Revise, that it's apparent that we did this as the first hearing for a reason.

And that the dollar amounts that we're talking about, 33 million, is actually relatively minuscule in comparison to our state budget. And that the bang for the buck that you get in terms of investing in residencies sounds pretty high. And I'll just name that figure again. If 80% of people who do their residencies in California stay in California, that's an incredibly high level of success.

So I just would urge us as we go through the budget conversations and we've talked a lot about having transparency as we move towards May Revise and wanting to have a lot of conversation there, that this is one of those pieces that I think I'm hearing from folks on the dais and Assembly Member Patterson, who had to step away, is incredibly important and number one on people's minds.

I'll just say it again. If you ask people what do you want to fix in health care, they will say, I want to be able to see a doctor when I need one. I don't want to have to go to the emergency room. I don't want to have to go to Med Stop.

I just want to go see my doctor when I'm sick. And I think we may have a clear pathway to be able to make some movement there. So I want to thank you. I'll open it up to public comment, if you could. Welcome to stay on the dais during public comment or stay at the table.

Hi. Good evening. Beth Malinowski with SEIU California. As folks are aware, we proudly represent residents and physicians in training through SEIU CIR, Committee of Interns and Residents. Really appreciate the conversation today, the framing. I just want to second in some ways your concluding remarks there.

SEIU has long been supportive of residency funding this state, especially programs like Song-Brown. The track record is clear from the remarks you've heard from everyone today. Just I appreciate your framing today around HR 1.

And wanted to take that one step further to say HR 1 is a reflection of a GOP Congress and a White House that is not committed to the health of Americans, not committed to the health of Californians. And the challenges that were reflected earlier around just federal policy on GMA that's not going to be changing anytime soon. Right.

So we really do have to rely on ourselves, the experiences we have here, the data that shows what works on making smart choices about those investments because sadly not going to be seeing anyone else come to our rescue to support these really critical programs. So thank you.

Good afternoon. Angela Hill with the California Medical Association. Thank you, Madam Chair and Committee, for having this conversation today. As we heard today, investments in these programs are highly successful. So thank you so much for having this conversation. We strongly support as we can expanding supporting residency and fellowship programs, particularly in underserved areas.

We do think that's going to strengthen California's ability to close regional gaps, improve access to care, and build a more diverse physician workforce that represents the communities that are being served. Giving our aging physician population and the shortage of medical students and residents.

We do think that California needs to continue making more investments to ensure that patients have access to quality care for themselves and their communities because they deserve it, regardless of where they live in California. We look forward to partnering with the Legislature and the committee on these issues to bolster our investments in this space. Thank you.

Good afternoon. Brian Aguilar with the Physicians for a Healthy California, the philanthropic arm of the California Medical Association. Thank you for your time on this very, very important issue for sure. I come here as one of the proud administrators of the GME workforce program, CalMedForce and CalMedForce Plus.

And we'd love to share more data with the committee and with panelists as well and the LAO around the specifics, the outcomes of our program, as well as the way in which we happen to run a very data driven, a very a stakeholder, GME stakeholder influenced and fiscally prudent organization. I just want to take the time to offer the committee two points of clarification on some of the data that was provided today as well.

CalMedForce is prohibited from from using funds, or programs are prohibited using CalMedForce funds for indirect costs. 75% of them go to benefits and salaries. And statutory funds must be used for GME costs as in accordance with the stat, with the the rules and with the criteria put forth by UC Health as well.

And then yes, CalMedForce did, CalMedForce Plus did happen to award a cycle recently funding for over 200 slots. New and expanding programs across 88 different specialties to 180 different programs, including one that was indeed a plastic surgery program. This program serves over 60% Medi-Cal indigent dual eligible and uninsured patients as well.

Because I'm sure, as everyone here can agree, Medi-Cal recipients who've been, who've had the experience of cancer, of burns, of physical trauma, or even congenital issues deserve to have treatment as well. So thank you again for the time here, and we'd love to see a graduate of the St. Joseph's Program as well and the CalMedForce program as well. Thank you.

Good afternoon, Chair and Members. Omar Altamimi here with CPEHN, the California Pan-Ethnic Health Network. Just wanted to touch very briefly on something that was already mentioned in the hearing on the volatility of existing funding. The impacts of HR 1 on California's health care funding streams are incredibly significant.

Additionally, for years, Proposition 56 has experienced waning returns that support health care costs for our most vulnerable populations. These considerations, in addition to changes to the MCO tax as a result of HR 1, are devastating to Californians. And for that reason, legislators must look to raise new revenues this year in order to stabilize our health care system in the future. Thank you.

Good afternoon, Chair and Members. Jorge Cruz on behalf of the California Behavioral Health Association. We represent community based behavioral health organizations and federally qualified health centers across the state. And our members contract with psychiatrists and other physician specialists every day. And the shortage is acute.

Communities are waiting months for appointments, and providers are competing across counties and systems for a limited pool of clinicians. And too often, integrated care teams are being built without the psychiatric capacity necessary to make them fully effective.

So we're urging the Legislature to expand the psychiatric residency slots, including child and adolescent psychiatry, incentives for residency placements in community based and FQHC settings, and funding structures that align with integrated behavioral and physical health teams models and a long term sustainability beyond one year. Thank you.

Thank you. And with that, we're going to go to public comment for any items not covered on the agenda. I know we had one earlier from the Ukraine. There's... Yeah, you're here. I love it. I love it.

I speak English only, only two weeks in my life. I visit mama. She lives in Staten Island four years. And these two weeks I speak in English. I work doctor in Ukraine. I help, you speak today about medicine is good. And I help soldier in Ukraine too. And I said, our peoples, our soldier, our women, our children. Today crazy, today strong, today happy. And we stop this war. Maybe with grizzly energy from Sacramento too. Thank you.

Well, thank you so much, and congratulations. We're just honored to have you here as a doctor from the Ukraine and appreciate you sitting through this hearing. Thank you. And with that, we will... I don't see any other public comment for items not on the agenda, so we will adjourn this hearing.