California Proposition 44, which would require community clinics to spend at least 90% of their annual revenue on patient care and related services, has put health care organizations and immigrant-serving groups at odds with a major health care union.

The measure, which will appear on the Nov. 3 ballot, would apply to nonprofit Federally Qualified Health Centers, or FQHCs.

Spending requirements would include compensation for medical staff, and on “program services” tied to their charitable mission, such as medical equipment and medications. Clinics that fail to meet the 90% threshold would be required to pay the state an amount equal to the shortfall.

The California Primary Care Association, the California Medical Association and community clinic groups oppose Proposition 44, warning that it harms an essential health care safety net for vulnerable populations, including children, seniors and patients with limited English proficiency.

Opponents also argue that FQHCs are already subject to strict federal oversight, and that Proposition 44 would add another layer of administrative red tape.

The measure is backed by SEIU-United Healthcare Workers West, which argues that nonprofit clinics receiving substantial public funding should reduce excessive executive compensation and nonmedical spending and direct more money toward services that benefit patients.

“Proposition 44 is not intended to cut clinic funding or force clinics to close,” Renée Saldaña, press secretary for SEIU-UHW, said in a phone interview with American Community Media. “It is about making sure existing funds are prioritized for patient care and the core mission of these organizations.”

An added strain

The No on Prop 44 Coalition, however, says the 90% requirement could strain clinic finances and force cuts not only to medical care, but also to support services relied on by low-income patients and immigrant communities.

Opponents say expenses for nurse managers, patient enrollment navigators, interpreters, transportation services, X-ray equipment and mammography machines could be treated as administrative costs, potentially putting programs for low-income and immigrant patients at risk.

An analysis by Berkeley Research Group cited by opponents found that 183 of 202 organizations studied would not currently meet the 90% spending requirement. The group estimated that the clinics could collectively face about $1.7 billion in payments to the state during the first year of implementation. BRG projected that 88% of the organizations in the study could operate at a loss after making those payments.

According to the California Legislative Analyst’s Office, clinics covered by the measure currently spend an average of about 80% of their revenue on health care services.

The Legislative Analyst’s Office has also said some clinics that fail to meet the spending requirement could face financial pressure severe enough to close. It cautioned, however, that the overall effect remains uncertain and would depend in part on which expenses the state attorney general ultimately determines qualify as health care spending and how individual clinics respond.

“If that amount of money is taken out of clinic operations immediately, some clinics may have to reduce services or close altogether,” Molly Weeden, a spokesperson for the No on Prop 44 Coalition, said in an interview. “The people who would be hurt the most are those who rely most heavily on the health care safety net, including children, low-income families, veterans and members of the LGBTQ+ community.”

Immigrant groups join opposition

About 200 health care organizations, physician and nursing groups, social service agencies and community organizations are opposing Proposition 44.

Kheir Clinic, which serves large numbers of immigrant patients in Los Angeles’ Koreatown, is also campaigning against the measure.

Kheir said Proposition 44 could affect its Patient Resources Department, which handles about 30,000 counseling and application cases each year. The clinic serves approximately 23,000 patients annually and provides assistance in Korean, English, Spanish, Thai and Bengali with enrollment in Medi-Cal, Medicare and CalFresh.

“In the end, it could worsen the health care environment for vulnerable patients, including children, seniors and immigrants with limited English proficiency,” said Dr. Eric Schluederberg, Kheir’s medical director.

Little Tokyo Service Center has also joined the opposition coalition.

“Community clinics play an especially important role in ensuring that seniors and people with low incomes have access to comprehensive care,” LTSC Co-Executive Director Peter Gee said in an email. “Proposition 44 could put that system at risk by penalizing clinics for providing essential patient services, and the potential loss of services is simply too great.”

Gee added that LTSC works closely with community clinics to help residents and clients gain access to the resources they need to remain safe and healthy.

The Community Clinic Association of Los Angeles County (CCALAC ) also issued a statement opposing the measure on Sept. 2.

CCALAC warned that if clinics are forced to cut essential services or close, patients with limited access to care could increasingly turn to hospital emergency rooms for routine treatment. That, the organization said, could worsen overcrowding, increase wait times and drive up health care costs.

Accountability

SEIU-UHW counters that the more immediate threat to community clinics is not Proposition 44, but reductions in federal health care funding.

Saldaña said changes under H.R. 1 could cost California as much as $30 billion a year in health care funding.

“When resources are shrinking, it becomes even more important to make sure the money that remains is spent on patients first,” she said.

SEIU-UHW also argues that some clinics devote too little of their revenue to program services.

The union said its analysis of IRS Form 990 filings from 2023 and 2024 found that some organizations spent less than half of their total revenue on program services.

Saldaña pointed to AltaMed, a major Southern California health care organization, saying its chief executive receives nearly $2 million a year in compensation and that the organization has also spent substantial amounts on expenses related to overseas artwork.

“This is not about punishing clinics that are struggling financially,” she said. “It is about holding accountable organizations that spend money on things that are far removed from patient care.”

With the election about 40 days away, SEIU-UHW plans to step up phone banking, text outreach and community campaigning led by health care workers.

*Correction: An earlier version of this story misspelled the name of Dr. Eric Schluederberg.

NICOLE CHANG

Nicole Chang is a media veteran with 25+ years in journalism and community service, including at The Korea Daily, where she led coverage on public issues and managed content across platforms. She regularly covers immigration and the Korean American community for ACoM.