Committee hears SB 351, a targeted effort to strengthen enforcement against private equity influence in medical and dental practices

Senator Kimball presented SB 351 as a response to rapid growth in private‑equity and hedge‑fund transactions in health care and dental practices. The bill, as discussed in committee, would strengthen enforcement of existing corporate practice of medicine and dentistry protections by giving the state Attorney General authority to act when commercial arrangements interfere with licensed clinicians’ decision‑making.

Senator Kimball said private‑equity deals in health care have surged in recent years and that transactions for medical and dental practices have become faster and shorter in duration. Proponents said the leveraged buyout model and the growth of dental service organizations (DSOs) can lead to pressure on clinicians to meet production targets, reduce appointment time, or pursue higher‑margin procedures — practices that, they said, can compromise clinical integrity and patient care. Shereen Gaddusi of the California Medical Association and Dr. Leticia Edwards, chair of the California Dental Association Governmental Affairs Council, gave testimony about private‑equity‑related pressures and urged the committee to protect clinical lanes.

Speakers for organized labor, emergency medicine and specialty physician groups supported the bill as targeted accountability to preserve the independence of clinical decisions.

Opposition testimony came from providers and organizations that rely on private capital to expand access and deliver services to underserved patients. John Steinbrun of Children’s Choice Dental Care and representatives of Dental Support Organizations argued the bill, as drafted, would single out private equity based on ownership structure rather than behavior, risk limiting capital that helps create clinics and expand access to Medi‑Cal populations. The Association of Dental Support Organizations urged amendments to clarify definitions and avoid unintended penalties on legitimate back‑office support that allows clinicians to focus on care. Other trade groups and private lenders urged the author to narrow language and align enforcement tools.

Senator Kimball said he did not intend to ban private equity investment but to ensure accountability and preserve clinical autonomy. He said the bill mirrors Medical Board guidance and is intended to give regulators better tools to address bad actors. The author indicated willingness to continue negotiating with opponents on tailored amendments.