Should health care providers benefitting from a federal drug discount program be required to spend most of the profits on patient care?
Proposition 34 would require certain health care organizations participating in the Medi-Cal prescription drug program to allocate at least 98% of their revenues toward patient care.
The stated goal is to prevent excessive profit-taking and prioritize funding for patient care, potentially leading to improved health care outcomes and affordability within Medi-Cal, the state’s Medicaid program.
However, the ballot measure stems from a battle over rent control efforts.
Proposition 34 only applies to “health care providers that spent over $100 million in any 10-year period on anything other than direct patient care and operated multifamily housing with over 500 high-severity health and safety violation.” As a result, it is specifically targeted at the Los Angeles-based nonprofit AIDS Healthcare Foundation run by Michael Weinstein.
Support for the initiative comes from the organization Protect Patients Now, which is sponsored by the California Apartment Association and has raised over $11.7 million to promote the initiative. The CAA represents owners, investors, developers, and managers of rental housing across the state.
CAA has a bone to pick with Weinstein, who has used a significant amount of profits from the AHF to promote ballot measures that seek to expand rent control — including the Justice for Renters Initiative which is also on the November ballot.
Protect Patients Now said the initiative “will force the worst abusers of the drug discount program, like Weinstein’s (AHF), back to the program’s original mission to provide health care to low-income patients.”
If the ballot measure passes, AHF will have to redirect 98% of its profits toward patient care or risk losing its non-profit status.
AHF and its associated advocacy organization, Housing is a Human Right, are opposed to the initiative, which they say unfairly targets AHF in order to block its efforts to expand rent control.
“CAA, which does not represent patients, has shown they are willing to deceive voters in their quest for unbridled profits for the billionaire landlord class they represent, while patients and low-income renters suffer,” said Susie Shannon, policy director for Housing is a Human Right.
