Proposition 44 Would Add New Financial Risk to Clinics Already Struggling

Last month, SAC Health, one of the Inland Empire’s largest safety-net clinic systems, laid off 49 administrative and support staff and closed two of its San Bernardino clinics as it worked to close a $10 million operating gap—part of a broader financial strain facing health systems nationwide as federal Medicaid cuts squeeze safety-net funding. Clinic closures aren’t a hypothetical risk. They are already happening here. And Proposition 44, a statewide measure on November’s ballot, would add new financial strain on top of pressures like these. We recommend a no vote.

Proposition 44 would require nonprofit clinics to spend at least 90% of their revenue on program services, penalizing them financially for anything less. While this may sound reasonable, currently the majority of nonprofit community clinics do not meet this threshold. According to the state’s nonpartisan Legislative Analyst’s Office (LAO), these clinics, which are required to report on their finances to the state and federal government, spend an average of 80% of their revenue on patient services, with the rest going to administrative and operational costs necessary to keep a clinic running. This gap means that clinics will either be fined or need to divert costs away from services that may not count towards the 90% threshold.

This uncertainty has real consequences for patients. Services like interpretation for patients who speak limited English, transportation assistance for those without reliable rides to appointments, case management that helps people navigate insurance and follow-up care, and the administrative leadership needed to keep a clinic running day to day—all of these could fall outside a narrow definition of program services even though none of it is optional for the patients who depend on it.

The main concern is that the measure doesn’t clearly state what services will and won’t count. Instead it lets the state Attorney General make the determination about what qualifies as a justifiable program service. The LAO’s own analysis states plainly that clinics unable to meet the new requirement might close instead.

For a clinic already absorbing a $10 million shortfall, the risk is significant. Fines for falling short of the 90% threshold could deepen budget gaps and cost people their jobs. Clinics could try to recover those fines by proving compliance within five years, a costly and uncertain process that pulls staff time and resources away from patients.

The nonprofit community clinic model has a foundation for delivering accountability to patients. Federal rules require that patients make up the majority of a clinic’s governing board, a structure that gives the people who rely on care a say in how a clinic operates. Proposition 44 does not mention or improve that existing safeguard. It simply layers a new financial penalty system on top of a structure that already serves patients directly.

A wide range of organizations oppose this measure, spanning health care, education, and service providers. This broad opposition coalition includes the San Bernardino County Medical Society, the Riverside County Medical Association, Community Health Association Inland Southern Region, Inland Behavioral Health Services, the California Medical Association, the California Teachers Association, and Planned Parenthood Affiliates of California.

What the Inland Empire’s clinics need right now is stability, not another financial threat stacked on top of a crisis already unfolding. Vote No on Proposition 44.