Assembly OKs Direct Hiring of Doctors

California law prohibits hospitals from hiring physicians directly. Instead, health institutions hire physician groups; it’s a law designed to keep a layer of bureaucratic insulation between doctors and hospitals.

But that prohibition may be lifted, in some cases. The Assembly voted this week in favor of SB 726 by Roy Ashburn (R-Bakersfield). The bill has already passed the Senate, and now heads back to the Senate for concurrence.

Concurrence approval by the Senate is not a rubber stamp, however. The bill passed the Senate a year ago last June, and it was different in many ways from the bill passed this week in the Assembly. (The California Medical Association, for example, supported SB 726 a year ago, but does not support this version of the bill.)

Also this week, the Senate’s Business, Professions and Economic Development Committee voted down AB 646  by Sandre Swanson (D-Alameda), which is similar to SB 726. Another bill that plumbs the same territory, AB 648 by Wesley Chesbro (D-Santa Rosa), is still waiting to be heard by that same Senate committee.

The vote in the Assembly was extremely close. It failed by a few votes two weeks ago when it first hit the Assembly floor — including one Assembly voter at the time who switched a yes vote to a no. The bill was granted reconsideration and this time it passed by two votes.

Advocates hope the bill help deal with a dearth of primary care physicians in rural and underserved areas. “This is intended to head off an impending health care crisis,” Peter Gamby of the Association of California Healthcare Districts said.

Direct hiring, Gamby said, would allow underserved districts and rural hospitals to better recruit primary care doctors. Even when physicians want to work in rural or underserved areas, they can’t afford to do it, he said, and this pilot program could help health districts and hospitals offer a more attractive salary package.

“All of us want the very best health care for our families and our communities, and the passage of SB 726 from the Assembly will help expand access to quality healthcare by increasing the number of doctors and nurses in underserved areas of the state,” bill author Ashburn said. “Current law is too restrictive and has contributed to the lack of quality healthcare options for residents in our rural and inner-city regions.”

The pilot program would run till the start of 2018. It would allow qualifying hospitals and health districts to directly employ up to five physicians and surgeons at a time, for a maximum 10-year term.

The differences between the version of SB 726 that passed the Senate a year ago and the one that passed the Assembly this week are troubling to Andrew LaMar, spokesman for the California Medical Association.

“We supported the bill that passed the Senate a year ago,” LaMar said. “It’s a substantially different bill now.”

For instance, he said, the first version contains a requirement to treat a high percentage of the underserved population. That stipulation has been deleted, LaMar said, so that some urban hospitals can qualify for direct hiring.

“All along, our bottom line has been protecting the independence of physicians and maintaining patient protection,” LaMar said. “We want to make sure there’s no conflict of interest to discourage or encourage patient decisions by doctors. Physicians don’t want to be in that position.”

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