Prop. 44: Requiring clinics to spend more revenue on patient care

GET READY TO VOTE

• What’s at stake?
• Why now?
• What supporters say
• What opponents say
• Potential financial impact
• Follow the money

Proposition 44 would require community clinics that serve low-income people to spend at least 90% of their total annual revenue on providing healthcare services to patients. It would direct the state attorney generall to define which clinic expenses would qualify as providing healthcare services.

What’s at stake?

Community health clinics throughout the state serve low-income and uninsured people with low-cost or free services. According to the Legislative Analyst’s Office, the state’s roughly 2,000 so-called "safety net” clinics currently report spending “an average of about 80 percent of their revenue on providing health care services,” though that number varies across individual clinics. Other expenses include administrative costs and executive pay.

Supporters of the measure, including the health workers union SEIU-UHW, claim that clinics have strayed from their mandate to serve the most vulnerable by spending too many taxpayer dollars on executive salaries and administrative costs.

Opponents of Prop 44, including the California Medical Association, contend that it has major “legal flaws” that could penalize safety net clinics for investing in things like telemedicine and transportation services.

Why now?

Supporters of the measure say safety net clinics need to make sure they prioritize patient care, especially since planned federal cuts under H.R.1, aka the One Big Beautiful Bill Act, could leave more Californians uninsured. They also say some executive salaries have become too bloated.

What supporters say

• Led by the health workers union SEIU-UHW, supporters claim that clinics have strayed from their mandate to serve the most vulnerable by spending too many taxpayer dollars on executive salaries and administrative costs. 
  
• Notable supporters: SEIU-UHW, a health workers union 

What opponents say

• Opponents contend that safety net community health clinics are already sufficiently regulated by state and federal governments. They say research shows the measure could cut “$1.7 billion from community health clinics in the first year and billions thereafter” by forcing them to pay noncompliance fees. 
  
• Notable opposition: California Primary Care Association, California Medical Association, Planned Parenthood Affiliates of California, California Hospital Association, California Democratic Party

Potential financial impact

According to the Legislative Analyst’s Office, Prop. 44 could create new costs for the state to enforce these requirements, estimated to be in the “low tens of millions of dollars per year.”

The LAO notes other unclear costs too. For example, if some clinics spend more on direct healthcare services for patients on Medi-Cal, that could increase state costs. If some clinics close due to the requirements, that could also indirectly cost the state money.

Follow the money