On October 7, 2025, the California Medical Association (CMA) announced that Governor Gavin Newsom has signed Senate Bill 351, a bill sponsored by the CMA and authored by Senator Christopher Cabaldon. The legislation is intended to address concerns about the increasing role of private equity and hedge funds in health care delivery across California.
Senate Bill 351 aims to reinforce California’s existing prohibition on the corporate practice of medicine. The bill grants the state Attorney General expanded authority to take action against corporate entities that interfere with medical practice, ensuring that health care decisions remain in the hands of physicians and patients rather than financial stakeholders.
“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.”
The bill was introduced in response to concerns that private equity involvement in health care has led to increased costs, diminished quality of care, and reduced patient access 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.”
SB 351 received unanimous support in the Assembly with 80 votes and passed the Senate with 32 votes, reflecting bipartisan agreement on protecting medical decision-making from corporate influence.
The legislation was included as part of CMA’s sponsored bill package for the 2025 legislative session.
