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CA's Critical Access Hospitals Get Green Light to Employ Physicians

By HealthLeaders Media News  
   October 11, 2016

A new California law lifts a century-old ban on direct physician employment, and aims to end a 'doctor desert' among the smallest and most remote hospitals.

Gov. Jerry Brown has signed a bill that will allow critical access hospitals in the state to employ physicians starting in 2017. Brown signed off on a number of patient protection bills in September.

Assembly Bill 2024 authored by assembly member Jim Wood (D-Healdsburg) will allow the state's smallest and most remote hospitals to directly employ physicians rather than hire them as independent contractors.

Hospitals in the state are banned from directly employing physicians under a corporate medicine law designed to prevent hospital administrators from influencing the decisions of physicians.

Employed, Self-Employed Physicians Equally (Dis)Satisfied

"Nearly the entire North Coast is a doctor desert," said Wood. "We have to find ways to recruit providers in our rural communities. 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 will apply only to critical access hospitals, small hospitals with 25 or fewer beds typically located in remote areas of the state, and will go into effect on January 1, 2017. AB 2024 calls for an eight-year pilot program due to sunset in 2024.

Bills similar to AB 2024 have been considered in the past but most of those bills applied to rural hospitals, which make up a much larger group than critical access hospitals.

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