The California Medical Association (CMA) announced today that Governor Gavin Newsom signed a CMA-sponsored bill, Senate Bill 351, a critical piece of legislation that addresses the growing influence of private equity and hedge funds in health care delivery.

Authored by Senator Christopher Cabaldon, SB 351 strengthens California's existing ban on the corporate practice of medicine by empowering the Attorney General to take action against corporate entities that interfere with the practice of medicine – ensuring that care decisions are determined by physicians and patients, not financial interests.  

"The signing of SB 351 is a victory for patient-centered care," said CMA President Shannon Udovic-Constant, M.D. "This new law further protects the integrity of the physician-patient relationship against the expanding influence of private equity in health care. CMA is incredibly grateful to Senator Cabaldon for his leadership and to Governor Newsom for signing this vital legislation into law."

SB 351 was drafted in response to growing concerns about the negative effects of private equity in health care, which has been linked to higher costs, lower quality of care, and reduced access for patients nationwide.

“I am grateful for the Governor’s signature to ensure that patients are receiving medical care prescribed by their doctors, not from private equity investors,” said Senator Cabaldon. “Private equity investment in health care practices has quintupled over the past decade. That kind of growth demands modern enforcement tools, not to restrict investment, but to make sure it doesn’t hurt patient outcomes or drive up the cost of care.”

In the state legislature, SB 351 passed unanimously in the Assembly with 80 yes votes and received 32 yes votes in the Senate – a broad, bipartisan show of support that underscores the widespread recognition that medical decision-making must be safeguarded from corporate interference.  

SB 351 was part of CMA’s sponsored bill package for the 2025 legislative session.