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In an effort to curb the chronic lack of health care in rural areas like Humboldt County, the state Assemblyman Jim Wood-led Health Committee passed a bill that would give small-town hospitals more freedom to hire doctors.

The bill is a response to the difficulties rural areas have attracting and retaining medical providers (as the Journal has written about here and here).

“We are experiencing a healthcare crisis,” Wood said in a press release. “Rural California has 1 physician for every 3,500 people, and the average age of that one physician is 60. It is crucial that we find ways to convince physicians to practice in our small towns.”

Wood’s office cited a survey that indicates 92 percent of graduating medical students want a salaried position rather than an independent practice.

That’s difficult to accomplish in California, where it’s illegal for physicians to be employed by hospitals in order to prevent doctors from protecting hospitals’ business interests. In response, the bill would ease that restriction for 28 rural hospitals — including Garberville’s Jerold Phelps Community Hospital and Redwood Memorial Hospital in Fortuna — in the hopes that doctors fresh out of med school will be lured by stable salaried positions at remote hospitals.

The bill now moves to the Assembly Appropriations Committee.

Read Wood’s press release here:

AB 2024, passed the Assembly Health Committee. The bill would give rural hospitals special privileges to hire doctors in an effort to lure more healthcare providers to California’s rural communities.

Assemblyman Wood said, “We are experiencing a healthcare crisis. Rural California has 1 physician for every 3,500 people, and the average age of that one physician is 60. It is crucial that we find ways to convince physicians to practice in our small towns.”

A 2015 survey indicated that 92% of final year medical residents would prefer employment with a salary versus working independently[1]. However, California has a statewide prohibition of the “Corporate Practice of Medicine” (CPM). This policy means that physicians cannot be employed by hospitals; they must act as independent contractors. The idea is to shield healthcare providers’ decision making from the business interests of the hospital.

“Unfortunately in our rural communities it can be extremely challenging for physicians to make it,” said Wood. “It is a daunting task for young physicians, who are often tens of thousands of dollars in debt, to move to a small town and build a practice from the ground up.”

AB 2024 would exempt 28 rural health clinics and critical access hospitals from the statewide prohibition of CPM and allow these rural hospitals to employ physicians.
AB 2024 will be heard next in Assembly Appropriations Committee.