California may be one of only five states that still prohibits the direct hiring of physicians by hospitals, but that could change if a State Senate Bill becomes law.

Senate Bill 726 would allow qualifying health care districts to directly hire physicians, replacing a 20-physician limit that currently applies in California.

At present, to be able to hire up to 20 physicians, a hospital must operate in a county of 750,000 or less population; have had a reported net operating losses in fiscal year 2000-01; and, have a patient base of at least 50% combined Medi-Cal, Medicare, and uninsured patients.

This program was created in 2003 and expires at the end of the year.

Under the current bill, the qualifications are revised to include that the hospital must be operated by the health care district itself, and not by another entity and be located within a medically underserved population or medically underserved area. This program would last until January 1, 2018.

According to a 2006 study undertaken by the Central Valley Health Policy Institute, there are 173 doctors per 100,000 residents in the Central Valley, which is the lowest of any region in the state.

In the Fresno Bee, leaders of a network of clinics who oppose the bill said they could lose their staff if hospitals could hire physicians.

The California Medical Association also opposes the Senate Bill on the grounds that it might effect patient care decisions.

Those in favor of the bill disagree, of course.

"The law is very clear that only doctors can comment on [a] doctor's practice behaviors," said Tom Peterson, a lobbyist for the Association of California Health Care Districts, in the Bee. His organization is one of the cosponsors of the Bill.

CMA’s solution is more multifaceted. They recommend improving Medi-Cal reimbursement rates, building new medical schools in underserved areas, and repaying the medical school loans of doctors who move to rural areas.

According to a legislative analysis of the bill cited by the Bee, the concept of hospitals not directly hiring physicians evolved from concerns in the early 20th century that doctors hired by mining companies would face conflicts between corporate and patient needs.