AAMC Reporter: December 2004

California Says Yes to Stem Cells, No to Hospital Funding

When Californians voted for president, they also cast ballots on two major initiatives that will affect the future of healthcare in the state. Voters said "yes" to advancing stem cell research and "no" to a measure touted to improve the state's hospital emergency services system.

Bolstered by support from the academic medicine community and Republican Gov. Arnold Schwarzenegger, Californians approved Proposition 71 by a margin of nearly 2 million votes, paving the way for an increase in taxpayer-funded embryonic stem cell research. However, they rejected Proposition 67, a tax increase on in-state telephone calls that would have created a fund for hospitals and emergency services, despite support from area physicians and nurses.

Beginning in 2005, California scientists and researchers will receive roughly $295 million annually in bond money for experiments involving cord blood stem cells and those harvested from in vitro fertilizations and therapeutic cloning. All told, these types of research will receive $3 billion over the next 10 years.

Money will be allocated to universities and other institutions engaged in embryonic stem cell research through the California Institute for Regenerative Medicine. The institute is a self-supporting center that will follow the National Institutes of Health protocol for awarding grants and loans.

According to Philip Pizzo, M.D., dean of Stanford University School of Medicine, enacting Proposition 71 frees California's medical schools from the restrictions of federal funding so they can embark on a path that could lead to treatments for several chronic diseases.

"Therapies eventually developed through stem cell research could lead to treatments for diabetes, Park-inson's diseases, Alzheimer's diseases, multiple sclerosis and other diseases that afflict so many people in California and around the world," Dr. Pizzo said. "The new funds will enable universities and institutions in Cali-fornia to recruit leading investigators, initiate new research efforts and develop the facilities in which to carry out these programs."

However, opponents to the ballot initiative still believe it is a fiscally irresponsible way to conduct research. Vincent Fortanasce, M.D., president of Doctors, Patients and Taxpayers for Fiscal Responsibility, said Californians should expect funding for many productive research efforts to evaporate. The new law will also divert money from research methods with already proven results, he said.

"I'm sad because I see money that could be given to adult stem cell research that would give cures to my Parkinson's patients now being shifted to mbryonic stem cell research," he said. "Two or three years down the line, people are going to be asking where the cures are, and there won't be any."

Additionally, Californians nixed a ballot initiative that would have added a 50-cent tax on in-state calls made from residential telephones and a 3 percent tax on calls made from cell phones. Supporters said the measure could have raised $550 million annually for hospitals, clinics and emergency services.

"Without this legislation, more emergency rooms will close," said Peter Warren, spokesman for Proposition 67 supporters and the California Medical Association. "Trauma patients will now have to drive farther to get emergency services, and we'll be pushing people into already jammed up hospitals."

According to the legislation, which was defeated by more than 4 million votes, hospitals and doctors would have received more than 90 percent of the collected funds for emergency room services and reimbursements. Another 1 percent of revenue, approximately $5 million annually, would have been allocated to 911 services.

Opponents said advertising the initiative as a method to improve 911 services is a gross misrepresentation given that a small percentage would be allocated to the service. It would have been another levy in an already oppressively taxed state, masquerading as a way to bail out the under-funded California healthcare system, they said.

"This ballot initiative would not have added a single bed, there wouldn't have been a single additional patient treated," said Todd Harris, spokesman for Stop the Phone Tax, a group that opposed Proposition 67. "The people behind 67 wanted to fool the voters into thinking that this would help the 911 system."

Instead, California should rely on its Maddy Funds, existing finances designated to support emergency medical care, Harris said. Each year, counties across the state leave millions of unspent dollars on the table that can be used in place of Proposition 67.

Warren disagreed, arguing that even though some counties do not use their yearly Maddy funds, many jurisdictions run out of money far before the year's end, making initiatives such as Proposition 67 necessary, he said.

-Whitney L.J. Howell, whowell@aamc.org

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