Governor Gavin Newsom has signed Senate Bill 351, a California Medical Association (CMA)-sponsored measure designed to curb the growing influence of private equity and hedge funds in health care delivery.

Authored by Senator Christopher Cabaldon, SB 351 strengthens California’s long-standing ban on the corporate practice of medicine, ensuring that medical decisions remain in the hands of physicians and patients, not investors. The law grants the Attorney General new authority to investigate and act against corporations that unlawfully interfere with clinical judgment or patient care.

“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 comes amid growing national concern over private equity’s expanding role in medicine, which has been linked to rising costs, diminished quality, and reduced access for patients.

“Private equity investment in health care practices has quintupled over the past decade,” noted Senator Cabaldon. “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 passed with overwhelming bipartisan support, receiving 80 votes in the Assembly and 32 in the Senate, reflecting a broad consensus that medical decision-making must be protected from corporate interference.

Part of CMA’s 2025 legislative package, SB 351 underscores the association’s commitment to advancing policies that safeguard physician independence and uphold the highest standards of patient care.