On October 7, 2025, the California Medical Association (CMA) announced that Governor Gavin Newsom has signed Senate Bill 351, a measure aimed at limiting the influence of private equity and hedge funds in health care delivery in California.
Senate Bill 351, authored by Senator Christopher Cabaldon and sponsored by CMA, is designed to reinforce the state’s existing prohibition on the corporate practice of medicine. The law gives the Attorney General new authority to take action against corporate entities that interfere with medical practice. The goal is to ensure that medical decisions are made by physicians and patients rather than being influenced by 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.”
The bill was created in response to concerns about private equity’s role in health care. Studies have linked increased private equity investment with higher costs, lower quality of care, and reduced access for patients across the United States.
“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.”
The legislation received unanimous support in both chambers of the state legislature: 80 yes votes in the Assembly and 32 yes votes in the Senate. This broad bipartisan backing reflects a consensus on protecting medical decision-making from corporate interference.
SB 351 was included as part of CMA’s legislative agenda for 2025.
