June 3, 2010

A state Senate bill that would allow hospitals in medically underserved areas of California to hire physicians is being negotiated with the California Medical Association (CMA).

“We’re working with CMA to reach a compromise. Hopefully we can do so over the next one to two weeks, said Andrew LaFlamme, Capital Director for Senator Roy Ashburn (R-Bakersfield). On Feb. 27, 2009 Ashburn introduced SB 726 which would expand a pilot project ending on Jan. 1, 2011 allowing qualified district hospitals to employ a physician and surgeon under certain conditions. Two assembly bills are proposing similar legislation.

California is one of about five states that still prohibit corporations or other legal entities from hiring physicians and surgeons. But there’s a long list of proponents for hospital districts hiring physicians, including the Medical Board of California, the California Association of Rural Clinics, the American Association of Retired Persons, the California State Association of Counties and many more. Those opposing the bill include CMA, the Central Valley Health District and the Santa Clara County Medical Association Alliance.

Proponents of the three bills say that rural or impoverished areas are not getting the medical care they need because there is not enough potential revenue in those areas to cover physicians’ costs.  But if doctors could share certain expenses for things like facilities, insurance premiums, billing and other necessities, it would make it more realistic for doctors to locate in those areas.

Opponents, such as the California Medical Association (CMA), say there’s an inherent conflict of interest when doctors become employees of hospitals.

“It’s not a good idea, it sounds attractive because it helps to get more doctors in rural areas. It sounds like apple pie and motherhood,” said Luther Cobb, a thoracic surgeon in Eureka and the Vice Speaker of the House of Delegates for CMA. “But you end up having two masters and the interest of the patient isn’t necessarily in the interest of the hospital,” he said.

Rural healthcare districts have lobbied hard for this bill, LaMar said. And while there is definitely a shortage of physicians in rural areas, this is not the answer, he contends. He said CMA has pushed through legislation to provide money to forgive loans for medical students and for loans to medical students who agree to practice in underserved areas.

Last year CMA actually supported a version of SB 726 which allowed for less physicians to be hired and more monitoring. But that bill got amended in the assembly. Now CMA and legislators are back to negotiations.

LaFlamme of Ashburn’s office countered Cobb’s argument that being employed by a hospital would change physicians’ medical care. “They’re saying there’s some undue influence, we say that already exists, probably more so if it’s your own practice.  I think the reality is they’re worried about their piece of the pie, they get paid a large amount of money to be on call [for the hospital,” LaFlamme said. Furthermore, he said, doctors already take the Hippocratic Oath. “We trust in that, and that’s what protects patients as it is.”

Two other bills, which also would allow for hospitals hiring doctors in medically underserved areas, are awaiting action in the Assembly. AB 648 is sponsored by Assemblymember Wesley Chesbro (D-North Coast) and supported by the California Hospital Association. Discussions about AB 648 are on going, said Jan Emerson spokeswoman for the California Hospital Association, but she declined to comment on those.

AB 646 by Assemblymember Sandre Swanson (D-Alameda) is a two-year bill and is in the Senate Business and Professions Committee.

Both Chesbro and Swanson are principal co-authors of Ashburn’s SB 726. That bill would expand the pilot project which currently allows each qualified district hospital to employ up to two physicians and surgeons with contracts that last no more than four years. The total number of physicians and surgeons that can be hired is 20 and the program expires January 1, 2011.

SB 726 sponsors contend that this existing pilot project is too narrow and does not provide enough data. SB 726 would expand that pilot allowing qualified hospitals to hire up to two physicians and surgeons and three additional ones if the district can demonstrate clear need following a public hearing. The expanded pilot project would last until Jan. 1, 2018 and would require the California Medical Board to report to the legislature on the project in 2013 and 2016. Hospitals would qualify for hiring if they are located in a medically underserved area and can show proof that they have had a vacancy for more than 12 months.