March 13, 2017

The Honorable Tony Thurmond

Chair Assembly Committee on Labor and Employment
State Capitol, Room 4005
Sacramento, CA 95814

SUBJECT: AB 387 (Thurmond) OPPOSE

Dear Assemblymember Thurmond:

The California Hospital Association (CHA), representing nearly 400 hospitals and
health systems, is writing today in opposition of AB 387, which would require health
care entities to pay allied health students, as defined, minimum wage for time spent
in clinical or experiential training that is required for state licensure.

Many allied health professions require students to participate in clinical or

experiential training at a hospital to obtain a degree and/or be qualified for the
licensure or certification examination. These occupations include radiologic
technologists, clinical laboratory scientists, respiratory therapists, physical
therapists, occupational therapists and speech therapists, among others, all of
which are in high demand and pay good wages. Hospitals are critical partners in the
education and training of health professionals as they are uniquely structured to
provide clinical experience. CHA estimates that hospitals statewide train more than
40,000 allied health students each year.

CHA opposes AB 387 because it would result in a significant decrease in the

capacity to train the allied health workforce needed to provide care for Californias
patients now and in the future. We estimate that the cost of this proposed
requirement to be hundreds of millions of dollars annually. Therefore, if passed, AB
387 would cause many clinical training slots for these critical professionals to be
eliminated, which, in turn, would put allied health educational programs at risk of
closure. The programs, many of which are offered by Californias Community
Colleges, would not be able to offer program enrollment without enough clinical
training placements for students at hospitals. The effects of this significant decrease
in capacity within the current training system would exacerbate existing allied
health care workforce shortages, put the development of a strong pipeline of future
health care givers in jeopardy which in turn would have a detrimental effect on
access to care.

Currently, the clinical training component of allied health educational programs are
funded exclusively by hospitals and other employers costs are not reimbursed by
Medi-Cal, private insurance or other sources. Hospitals invest hundreds of millions
The Honorable Tony Thurmond Page 2
March 13, 2017

of dollars each year in these programs for supervisors and mentors who train
students, loaning licensed staff to serve as faculty at educational institutions, and
providing training facilities and special equipment. Hospitals take these actions
because they know the importance of investing in the states future health care
workforce and because teaching is part of the culture of many hospitals and closely
linked to their mission.

AB 387 fails to recognize that for patient care-related training programs, various
state and federal laws prohibit students from providing unsupervised care. For
example, students in radiologic technologist programs can only perform procedures
if a qualified licensed individual is physically present to observe, verify and correct
as needed the students use of the equipment. Therefore, these students are in
learning mode and not lawfully allowed to deliver care except within strict laws
governing supervision requirements. The students are obtaining the necessary
education and experience to become a licensed or certified professional.

The sponsors cite the need for additional diversity within the student population of
health professions programs. Many training slots within hospitals are filled with
allied health students from Californias Community College programs, which serve
the most diverse students in the state. Recent data from the California Community
Colleges Chancellors Office reveals that allied health programs are incredibly
diverse, with 64 percent of students representing non-white ethnicities, which is
consistent with Californias patient population.

Sponsors of this bill also cite the need to remove barriers for low-income students
who want to go into allied health professions and they assert that these low-income
students do not currently aspire to these professions because of clinical hour
requirements. This assertion is unsubstantiated. In fact, currently within the
California Community Colleges 49.3% of students pay little or no tuition because
they are eligible for Board of Governor fee waivers, making it possible for students
of all income levels to enroll in allied health professions programs provided there is
sufficient enrollment space. Unfortunately, many programs have waiting lists for
high demand programs in areas such as radiological technology, sonography,
medical laboratory technology, and others. If AB 387 passes, these waiting lists will
grow longer as capacity will decrease with the constriction of corresponding clinical
slots. Furthermore, to refute the claim that low-income students are crowded out of
these professions, it should be noted that students facing challenges with paying for
school and training are often eligible for financial aid and grants that do not have to
be paid back through state and federal programs, such as Cal-Grant B. In addition,
when students complete their training and become licensed in these high wage
occupations, they often become employees of their training program sponsor (the
hospital), many of which offer loan forgiveness and tuition reimbursement.

Further, AB 387 will have a negative impact on the educational market place. If
California Community College health professions programs that serve the most
diverse students, and for which half of students pay little or no tuition, are limited in
capacity by the number of clinical placements they can secure, students will have
limited choices in California for education and training. Recognizing that neither
hospitals, nor colleges, will have the resources to support the minimum wage
The Honorable Tony Thurmond Page 3
March 13, 2017

requirements for clinical hours at todays capacity, this will open the market up to
out-of-state and proprietary schools. This would be a tremendous disservice to
California students seeking access an affordable public education from an
accredited, local source, such as their local community college. AB 387 has the
potential to drive students out of state for education and training, which presents
the risk that they will not return after licensure, thus depriving California of valuable
health care workers. This emerging market could leave students saddled with debt
that is unnecessary under the current system.

Rural communities and training programs would be disproportionately impacted by

this bill. Grow-your-own strategies are utilized in rural communities as a way of
investing in the local economy and developing a local healthcare workforce that
leads to good paying jobs for its residents. If AB 387 is signed into law, these
programs would be in jeopardy because the cost would be substantially more than
small rural hospitals and other healthcare entities could absorb. This would result in
students having to gain their clinical experience elsewhere, with no guarantee that
they will be able to return and serve their community, leaving the rural communities
in an even more dire healthcare workforce shortage.

In recent years, industry and education partners have convened to ensure that
California leaders understand the importance of developing a workforce with the
skills needed to fill high demand, good paying jobs. The Board of Governors (BOG)
of the California Community Colleges Strong Workforce Taskforce was one of the
most successful efforts resulting in 25 recommendations for the California
Community College Chancellors Office and campuses to improve and increase
career technical education in the state, which includes the healthcare sector. Not
only did the BOG adopt all 25 recommendations put forth by the taskforce to ensure
a trained workforce ready to fill good jobs in Californians high demand, high wage
sectors, but the Governor also included $200M for implementing the
recommendations in his 2016-17 budget. The health sector makes up a large
percentage of CTE in California, but if AB 387 passes, it would undermine the goal of
the Strong Workforce Taskforce, which includes increased access to CTE for
California Community College students.

Students are not employees. They are engaged in classroom and clinical activities
to become qualified for licensure, certification and employment. AB 387 will
increase health care costs without any improvements in quality, value or diversity of
the workforce. Further, AB 387 will have the adverse consequence of reducing
students opportunities to benefit from hospital-provided training and clinical
experience, thus exacerbating workforce shortages.

For the above reasons, CHA respectfully asks for your NO vote on AB 387.

Sincerely,
The Honorable Tony Thurmond Page 4
March 13, 2017

Kathryn Scott
Legislative Advocate

KAS:dlv

cc: The Honorable Members of Assembly Labor and Employment Committee

, consultant, Assembly Labor and Employment Committee
Julia King, consultant, Assembly Republican Caucus