On October 7, 2025, Governor Gavin Newsom signed Senate Bill 351 into law, a measure sponsored by the California Medical Association (CMA) aimed at addressing the influence of private equity and hedge funds in health care delivery.
The bill, authored by Senator Christopher Cabaldon, enhances California’s ban on the corporate practice of medicine. It gives the Attorney General new authority to act against corporate entities that interfere with medical practice. The intent is to ensure that decisions about patient care remain between 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 legislation was created in response to concerns that private equity involvement in health care has led to increased costs, lower quality of care, and reduced access for patients across the country.
“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 approval in the Assembly with 80 votes and passed the Senate with 32 votes, reflecting bipartisan support for safeguarding medical decision-making from corporate interference.
The bill was included as part of CMA’s legislative package for 2025.
