California voters will decide whether nonprofit community clinics must spend 90% of revenue on patient care
Proposition 44 on the Nov. 3 ballot would set a spending floor for private nonprofit safety net clinics and make those that fall short pay the gap to the state. The Legislative Analyst's Office puts enforcement at low tens of millions of dollars a year, paid by fees on the clinics.
Sacramento. California voters will decide on Nov. 3 whether private nonprofit community clinics that serve mainly low-income patients must spend at least 90% of their revenue each year on health care. Proposition 44 is not new: it qualified for the ballot earlier, and this is a look at what it would do as the election nears.
There are about 2,000 safety net clinics in California, most of them private nonprofits and the rest run by public bodies such as counties, according to the Legislative Analyst's Office, the Legislature's nonpartisan fiscal adviser. In their reports to federal and state governments, the private nonprofit clinics spend an average of about 80% of revenue on health care services, the office says, though the share varies.
What the measure would do
The measure would cap spending on everything else, such as administration, at 10% of revenue. The state attorney general would define which expenses count as health care, starting from the clinics' existing federal reports, and clinics could ask the state for a temporary waiver in some cases. The ballot label describes the covered clinics as nonprofit Federally Qualified Health Centers and the required spending as program services advancing their charitable purpose.
A clinic that falls short would pay the state a penalty equal to the gap. It would get the money back if it complied within five years; otherwise the state would keep it and spend it on clinic workforce programs.
The analyst's office estimates state enforcement costs in the low tens of millions of dollars a year, to be covered by fees on the clinics. It says other costs are uncertain: clinics spending more on care could raise state costs because some patients are in Medi-Cal, and some clinics that could not meet the minimum might close.
Who is for and against it
The health workers union SEIU-UHW put the measure on the ballot after a similar bill failed last year, CalMatters reported, and clinics lost a lawsuit earlier this year that sought to keep it off. Supporters argue that clinics should spend more on patient care and less on executive pay and overhead, and say federal cuts under H.R. 1 make that more pressing.
Opponents, including the California Primary Care Association, the California Medical Association, Planned Parenthood Affiliates of California, the California Hospital Association and the California Democratic Party, say clinics are already heavily regulated. They estimate the measure would cost clinics more than $1.7 billion in penalties in the first year and force them to cut services or close.
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