Prop 44: Requires Health Clinics to Spend More on Patient Care

Ericka Cruz Guevarra: There are about 2,000 community clinics providing health care here in California.

Olivia Allen-Price: These clinics typically serve patients who don’t have any other options. Low-income people or those who are under-insured often go to these clinics for things like vaccines, mental health, and social services.

Ericka Cruz Guevarra: They’re also funded in part by our tax dollars. But one union says these clinics aren’t spending enough of their money on patients. And that’s where Proposition 44 comes in.

Olivia Allen-Price: Prop 44 would force community health clinics to spend 90% of their revenue on health care services or face penalties from the state.

Ericka Cruz Guevarra: Will Prop 44 help make healthcare dollars go where they belong? Or could it lead these clinics to cut services or even shut down entirely?

Olivia Allen-Price: That’s for you to decide.

Ericka Cruz Guevarra: I’m Ericka Cruz Guevarra, host of The Bay.

Olivia Allen-Price: And I’m Olivia Allen-Price, host of Bay Curious.

Ericka Cruz Guevarra: And welcome back to Prop Fest, a collaboration between The Bay and Bay Curious. Today, we’re walking you through Proposition 44. Here’s how it reads on your ballot.

Speaker: Prop 44 requires community health clinics spend 90% of revenue on program services.

Ericka Cruz Guevarra: Here to help us break this all down is KQED health correspondent, Lesley McClurg. Hey there, Lesley!

Lesley McClurg: Hello.

Ericka Cruz Guevarra: What exactly would Prop 44 change for these clinics?

Lesley McClurg: The clinics would have to prove that they are spending 90% of their revenue, so they are tax-funded clinics, so they would have to prove they’re spending 90 percent of that money on health care services, so basically medical offerings for their patients. At the end of the day, the attorney general would decide on exactly what qualifies within that 90%. If the clinics don’t comply, they would face fines. Although the penalties that they would have to pay could be returned to them if they were able to hit that 90% quota spending target basically within five years.

Ericka Cruz Guevarra: Lesley, who put Proposition 44 on the ballot, and what is the problem that they say they’re trying to solve with Prop 44?

Lesley McClurg: The proponents of Prop 44 are SEIU, United Health Care Workers West, which is the union that represents health care workers.

Renee Saldana: I’d like to remind folks that community clinics were started with the mission of serving some of the folks in California that need these services the most.

Lesley McClurg: I spoke with Renee Saldana, the press secretary for the union, and she said the union is really trying to ensure that clinics are investing their money correctly.

Renee Saldana: It’s essentially anything that would help patients receive care or the direct care itself. So this includes medical visits, lab tests and x-rays, preventative care, of course, like vaccines and screenings, mammograms, things like outreach, transportation, language interpretation…

Lesley McClurg: They have found that some clinics are using their revenue poorly, maybe even wasting it on anything that the union says could be, say, unnecessary administrative costs. So they’re spending too much on running the clinic rather than putting that money towards patients. Maybe spending too much on fundraising. But the main thing that they’re pointing out is potentially executive compensation, so over bloated salaries for the top, for the people who are running these clinics.

Renee Saldana: So I think a lot of Californians really understand how important these clinics are to our healthcare system and they wanna make sure that they are prioritizing patients by spending our public dollars where the dollars are needed most, which is directly on patient care and other mission-related services.

Lesley McClurg: The California Legislative Analyst’s Office, which is a nonpartisan fiscal advisor, notes that these clinics currently spend, on average, about 80% of their revenue on healthcare services, although it does vary and depend on each individual clinic. But the yes on 44 or the union believes that that really should be 90% across the board.

Ericka Cruz Guevarra: And do they also mention, I mean, these cuts that we’ve seen to health care at the federal level as a reason also to pass this?

Lesley McClurg: Absolutely. So you’ve got this H.R.1, which is the federal bill, it’s also been called, you know, the big, beautiful bill. But basically, the Trump administration is heavily cutting federal funding for medical care. And so these clinics are going to be hurting and working on a much tighter budget. And so the union is arguing that they need to ensure that these clinics are using their budgets as well as possible so that best care can reach patients. Since it’s a really hard time to ensure that everybody has the medical care that they need under these federal cuts.

Renee Saldana: Again, all we want is that these clinics are able to stay open when these health care cuts from H.R.1 really hit California next year.

Ericka Cruz Guevarra: So you have SEIU, the union that represents many healthcare workers in favor of Prop 44. Any other groups in favor of this measure?

Lesley McClurg: The only group that I’m aware of is the California Labor Federation is also in favor.

Ericka Cruz Guevarra: We’ll have more on Prop 44 right after this. By the way, did you know that KQED is funded almost entirely by listeners just like you? Join the thousands of everyday listeners who help make this work happen. Just go to donate.kqed.org/podcasts. We’ll be right back. And we’re back talking about Prop 44 with KQED health correspondent, Lesley McClurg. Lesley, this measure has a long list of opponents actually, tell me a little bit more about who’s against Prop 44 and what their argument is?

Lesley McClurg: So it’s made up mostly of medical groups, although there are other groups in addition to the medical groups. But you’ve got the California Primary Care Association, the California Medical Association. You’ve got Planned Parenthood Affiliates of California. You’ve got the the California Hospital Association. And they are all worried that at the end of the day the clinics would fail to meet the spending threshold and that the non-compliance fees that these clinics would ultimately be forced to pay would end up leading to either significantly reduced services at these clinics or even force some of these clinics to close.

Mark Shotwell: Health centers do a great job of managing those funds, getting high quality healthcare outcomes and this ballot measure would really erode our ability to do that.

Lesley McClurg: I spoke specifically with Mark Shotwell. He’s the CEO of Ritter Center. This is a nonprofit who serves a largely unhoused population in San Rafael. And he says about 30% of their costs under his… and this is his opinion, would not qualify as quote health care services.

Mark Shotwell: Things like telehealth services, patient navigation, transportation to ensure that people get to their necessary medical appointments or translation services.

Lesley McClurg: He said these are wraparound services like education, housing, home health care. These are all services that he worries would not qualify as direct medical care, you know, offerings and that they would end up, the clinic, Ritter Clinic would end paying kind of precious dollars on penalties when they’re already operating on a really tight budget.

Mark Shotwell: They’ve decided to focus on CEO or executive salaries and that somehow that’s a problem that we’re not having money go to the patients. It also doesn’t include things like human resources or accounting or IT. So these are all necessary services to run a health clinic. And we have the oversight of family members, boards, the state of California, the federal government. These are highly regulated environments to ensure that patients are getting the very best services, so it’s also unnecessary.

Ericka Cruz Guevarra: So then, Lesley, if Prop 44 actually passes, then 90% of the revenue at these clinics must be spent on healthcare services, as you said. But it seems like the yes and the no sides aren’t really on the same page about what exactly falls under the umbrella of healthcare services. You have Renee on the yes side who’s saying it covers anything related to patient care, but then you have Mark on the no side who says, that this would threaten really essential services at his clinic, so what exactly am I supposed to make of this as a voter?

Lesley McClurg: Yeah, it’s not clear. The yes and no sides are telling me very different things about how this 90% would be defined. The LAO says that the state attorney general would be able to define in more detail which kinds of expenses would qualify. The proposition is not quite as simple as it looks on the ballot. You also have a background that I think is important to know about, which is that there has been pressure to unionize these clinics and some of these clinics have said no to that pressure. There’s an argument from the opponents that this bill is a push or kind of like a political pressure to be like, okay, we’re going to put this thing on the ballot, that’s not going to, that’s going to be really hard for you to meet, if you don’t unionize. Now the union denies that that is part of their agenda, but the opponents arguing that that could potentially be at play here and there has been a past, there’s a history here of SEIU, has filed ballot measures in the past for organizations that have resisted unionization. This includes a series of recent measures that would have placed new regulations on dialysis clinics. So that there is a history there of SEIU doing this. And again, they’re denying it in this moment, but potentially that’s also at play.

Ericka Cruz Guevarra: What’s going on with campaign spending on Prop 44 on both the yes and the no sides?

Lesley McClurg: According to CalMatters, who has been reporting on this, they note that SEIU has raised $16.9 million, and the opponents, all those different medical groups, et cetera, have raised about $37.5 million. So more than twice as much has been raised by the opponents.

Ericka Cruz Guevarra: Well Lesley, I appreciate you for breaking this one down for us. Thank you so much.

Lesley McClurg: Thank you.

Ericka Cruz Guevarra: In a nutshell, a yes vote on this measure means certain private non-profit health care clinics would have to spend at least 90% of their revenue each year on providing health care services or face a fine. A no vote on the measure means this new requirement on health care clinic spending would not go into effect.

Olivia Allen-Price: That’s it for our latest episode of PropFest, a collaboration between The Bay and Bay Curious. You’re almost to the finish line.

Ericka Cruz Guevarra: KQED.org/propfest is the place to return for all these PropFest breakdowns, and if this series is helping you, do us a favor and tell one friend about it.

Olivia Allen-Price: Word of mouth really helps our shows grow. PropFest is made possible thanks to Katrina Schwartz, Pauline Bartolone, Anna Casalme, Olivia Allen-Price:, Gabriela Glueck. Christopher Beale, Alan Montecillo.

Ericka Cruz Guevarra: And me, Ericka Cruz Guevarra. We get extra support from Maha Sanad, Katie Springer, Jen Chien, Ethan Toven-Lindsey and everyone on Team KQED.

Ericka Cruz Guevarra: Our show is made in San Francisco at member-supported KQED. Support for The Bay is provided in part by the Osher Production Fund. Some members of the KQED podcast team are represented by the Screen Actors Guild, American Federation of Television and Radio Artists, San Francisco, Northern California Local.

Ericka Cruz Guevarra: I’m Ericka Cruz Guevarra.

Olivia Allen-Price: And I’m Olivia Allen-Price:. Thanks for listening.

Some members of the KQED podcast team are represented by The Screen Actors Guild, American Federation of Television and Radio Artists, San Francisco-Northern California Local.