Senate passes Cabaldon bill to put patients before hedge fund profits

SACRAMENTO (May 28, 2025) Legislation by Sen. Christopher Cabaldon (D-Yolo) to prevent private equity investors from steering health care decisions by medical and dental practices to maximize profit passed the state Senate Wednesday and heads to the Assembly.  

Sponsored by the California Medical Association and the California Dental Association, SB 351 would strengthen California’s existing ban on the corporate practice of medicine by empowering the Attorney General’s office to investigate and bring action against private equity groups or hedge funds that interfere with or exert control over the practice of medicine or dental care.

Sen. Cabaldon introduced SB 351 in response to growing concerns about the rapid pace at which private equity firms are acquiring control of medical and dental practices in California – a trend that has led to staffing shortages, higher costs for patients and health care plans, and less patient time with doctors. 

“The growth in private equity in health care has quintupled over the last decade,” Sen. Cabaldon said, noting that these investors typically hold their medical investments in California for less than two years. 

“This means the traditional regulatory oversight mechanisms and reputational mechanisms don’t function effectively,” he said. “SB 351 is a common sense measure to make sure patients are protected.”