Contact: Molly Weedn | molly@weednpa.com
Analysis by Berkeley Research Group and State’s Former Legislative Analyst Finds Measure Will Divert $1.7 billion annually from clinics and two-thirds of community health centers and clinics in the state and put them at risk of closing
Sacramento, CA – A reckless statewide ballot proposition aiming for the November 2026 General Election would threaten millions of California patients who rely on community health centers and clinics for their care, according to a new study from the Berkeley Research Group (BRG). The study highlights the existing challenging financial situation faced by Federally Qualified Health Centers (FQHCs) and Look-Alike clinics, which will worsen if this measure passes.
The measure would divert $1.7 billion away from patient care into new state bureaucracy in the first year alone, forcing community health centers and clinics to drastically reduce patient services and even close. The initiative would also cost the state more than $1 billion in additional health care spending and would limit expansions and upgrades of health centers and clinics across the state.
“Our analysis shows that this initiative would result in 88% of the clinics evaluated operating at a loss, putting those clinics at risk of closure,” said Bill Hamm, former state Legislative Analyst and partner at BRG. “By our estimate, that could jeopardize care for up to 11.7 million patient visits each year.”
Findings from the report include:
- Most of the clinic organizations (91% or 183 of 202) analyzed do not meet the initiative’s arbitrary 90% spend ratio requirement.
- Those organizations could pay $1.7 billion in total penalties in the first year alone – money from the clinics that would be redirected from patient and mission related expenses into a state penalty fund. Clinics would face similarly crippling penalties every year.
- Many of the organizations (64% or 117 out of 183) will have a resulting total negative margin if they are required to pay the penalty – putting clinics at risk of closure.
- Organizations at risk of closing were associated with between 1.3 million and 11.7 million patient encounters in 2023 – including up to 7.7 million encounters from Medi-Cal patients.
- The strict 90% ratio would not allow clinics to keep funding in reserves for major capital investments, such as opening new clinics, purchasing new equipment or technologies, investments into value-based care, and preparing for potential public health or other emergencies.
- The initiative will increase State General Fund costs by more than $1 billion, primarily because displaced patients will be forced to receive care in more costly settings, such as hospital emergency rooms.
“Community health centers and clinics provide essential care for millions of Californians, all of which is at risk with this reckless ballot measure,” said Francisco Silva, President & CEO of the California Primary Care Association, representing more than 2,300 health center and clinic sites statewide. “This initiative would not only strip care from the most vulnerable among us, but it would also result in rising health care costs for everyone and threaten vital care services that keep communities across the state healthy.
“Clinic closures would also impact other Californians who may not use them directly,” the BRG report states. “When patients covered under government healthcare services and insurance become more expensive or their services are not reimbursed, the resulting increased costs are shifted to commercial and other patients within the state by medical providers.”
A broad and diverse coalition of more than 1,000 community health centers and clinic sites have united in opposition to the initiative.
For more information, visit protectpatientsca.com