Read an in-depth article on the background and potential impact of the proposition.
Behind the Scenes
- Introduction
- Introduction
- The Impact on Taxpayers
- Changes from Previous Efforts
- Why Are Children’s Hospitals Seeking More Money?
- Financial Backing
- A Constitutional Amendment
- The Role of Children’s Hospitals
- Campaign Strategies
- Campaign Outlook
- Parental Involvement Laws
- Opponents and Major Endorsements
- Credits
- Conclusion
- Credits
Prop. 4 is a revised version of Prop. 85, which California voters rejected by an 8% margin in the 2006 general election. Prop. 85 was itself a revised version of Prop. 73, which was defeated by a 6% plurality in the special election of 2005.
Passage of Proposition 3 would make grant funding available to eight private, nonprofit children’s hospitals and five children’s hospitals affiliated with the University of California for new construction and equipment, remodeling, and other infrastructure needs. The ballot initiative comes amid heavy pressures on these specialty-care hospitals -- declining state reimbursements, increasing costs, and strong growth in demand for pediatric services.
“Recent polling shows that California voters want to help children’s hospitals meet the needs of the state’s most seriously ill and injured children, notwithstanding the failure to enact health care reform and the current state budget deficit,” says Diana Dooley, president and CEO of the California Children’s Hospital Association (CCHA), which proposed the measure.
The taxpayers association believes that the state’s debt ratio is already too high, says Executive Director Kris Vosburgh. “That means all of our bonds are costing more, which means that taxpayers end up paying more,” he says.
Other opponents of the measure argue that administrators and employees at children’s hospitals will benefit personally and monetarily from its passage, that it circumvents the Legislature, and that the initiative is flawed. According to these opponents, 80 percent of Prop. 3 funds would be available to any acute care hospitals that treat children. They also maintain that the initiative is a “back door way” to reimburse hospitals for treating illegal immigrants and indigents, and that Prop. 3’s definition of capital improvements is so vague, the funds could be used to finance any number of projects. Proponents, they believe, are tugging at voters’ heart strings as way to garner more funding at a time of great economic uncertainty and as California struggles to balance its books.
Including principal and interest, Prop. 3 would cost about $2 billion over 30 years. At a joint hearing of the California Senate and Assembly health committees in early July regarding Prop. 3, the state Legislative Analyst’s Office (LAO) reported that because California “has a very low credit rating at this time -- pretty close to the bottom of the pack compared to other states,” it must pay a higher interest rate on the bonds it issues. The state currently services $53 billion in bonds. An additional $68 billion in authorized but unsold bonds are in the pipeline, according to David Vasche, the LAO’s director of economics, revenues, and taxation.
Prop. 3’s interest-related expenses are troubling for the Service Employees International Union, some of whose members work at children’s hospitals. “We have a serious question as to whether these hospitals deserve to be first in line for what is the most extravagant way of getting dollars to them,” Beth Capell, SEIU’s Sacramento lobbyist, told the Senate and Assembly health committees.
Proponents of parental notification were convinced the most damaging argument against the 2006 initiative had been encapsulated in a Planned Parenthood-sponsored commercial aired toward the end of the campaign. “Think outside your bubble,” it urged voters. “Some girls do not enjoy the relationship with their parents that you may have. Prop. 85 would force girls to notify an abusive or violent parent that they are pregnant. And this puts them in real danger.” The ad did not acknowledge that the measure did offer a judicial bypass option. But, comments Grace Dulaney, a spokeswoman for the Yes on Prop. 4 campaign, “it is not unreasonable to be concerned about the effect of parental notification requirements on girls from abusive homes.”
Attorney Catherine Short of Ojai, legal director of the Napa-based Life Legal Defense Foundation and a co-author of Prop. 73, drafted the new measure to blunt the opposition’s “main argument.” It includes a clause permitting a minor to substitute a “grandparent, stepparent, foster parent, aunt, uncle, sibling, half-sibling, or first cousin” to receive the advance notification, as long as that person was over the age of 21. “If that’s the problem, now we’ve addressed it head on,” Short says. “Notifying another adult family member achieves our goal. Someone in the family knows what’s going on. It’s no longer a secret abortion.”
Several other changes were made to the proposed amendment. The civil penalty has been doubled -- to $2,000 under Prop. 4 -- for anyone who lies in order to help a girl under 18 obtain an abortion without notifying a parent. There is also a new liability timeframe, specifying that a parent wrongfully denied notification has up to four years after the daughter turns 18 or four years after learning about the provider’s negligence to file a civil lawsuit.
The advocates of parental notification personalized Prop. 4 by calling it the Child and Teen Safety and Stop Predators Act: Sarah’s Law. “Sarah” is the pseudonym given to a Texas teenager who died of complications following a legal abortion in 1994. “The abstract notion of parents’ rights didn’t move people,” Short explains in reference to earlier defeats. “We had to make it clear that real lives are at stake.” Adds Prop. 4 spokesman Albin Rhomberg, “Anecdotal information helps people understand what the issue is.”
In early August, opponents of Prop. 4 led by Planned Parenthood Affiliates of California sought a court order to exclude the title reference and description of “Sarah” provided by proponents in their ballot pamphlet arguments. Texas court records indicate the girl was married (and the mother of a child born the previous year), opponents noted. She would therefore, they pointed out, have been exempt from the law bearing her fictitious name even were it in effect. Sacramento Superior Court Judge Michael P. Kenny observed that he was “troubled” by proponents’ “artful characterization” of the case. Nevertheless, he ruled, “the courts have recognized that in ballot arguments proponents are allowed to engage in hyperbole.” Statements challenged by opponents were allowed to remain in the pamphlet distributed to California’s 16 million voters.
A primary reason, according to the hospitals, is the continuing squeeze on Medi-Cal reimbursements, which means they have little or no operating margins to apply toward infrastructure. The reimbursement situation could deteriorate in coming months. In a replay of previous state budget battles, a feature of this year’s impasse in Sacramento is a much-debated 10% cut in Medi-Cal spending, the second-largest general-fund expenditure.
A second reason children’s hospitals are seeking more grant funds is that planning, state approvals for, and construction of facilities take years to complete; the hospitals are projecting their budget needs well into the future. They expect to spend all of the $750 million, the availability of which expires in 2014.
Third, the hospitals say that passage of Prop. 3 is critical because, as a RAND study (Seismic Safety: Will California’s Hospitals Be Ready for the Next Big Quake? California HealthCare Foundation: January 2007) in 2007 revealed, the cost of building new hospital facilities has soared to about $1,000 per square foot in recent years. It has doubled since 2001 and is now more than three times the cost for new office structures. Expansion of the pediatric intensive care unit at UC Davis Children’s Hospital, funded in part by Prop. 61 funds, exemplifies this inflationary spiral. The new unit had an initial price tag of $19 million but will cost about $30 million by the time it is completed, according to Anthony Philipps, M.D., chair of the department of pediatrics at UC Davis Medical Center.
Testifying at the state hearing in July, Philipps also noted that children’s hospitals must modernize their facilities and purchase state-of-the-art patient care equipment to attract pediatric subspecialists from around the country and to train incoming doctors. Subspecialists are in “exceedingly high demand,” he said.
Finally, there is mounting pressure on hospital capacity as California’s pediatric population grows. The California Department of Finance estimates that the number of children will increase by 35% in the next two decades.
“We’ve had to delay -- sometimes for months -- elective surgery for some patients because there just wasn’t a bed to put them in after the surgery was over,” says Barbara Ryan, vice president for government affairs at 248-bed Rady Children’s Hospital in San Diego. Half of the nearly 143,000 sick or injured children treated there last year were on Medi-Cal. The hospital expects to spend about $66 million of the Prop. 61 funds on completing a 260,000-square-foot acute care wing, remodeling a patient care building that dates to 1954, refurbishing a hematology-oncology clinic, upgrading a helicopter pad for emergency airlifts, and purchasing diagnostic equipment. Gifts and commercial loans are providing additional funds for the new $260 million wing.
“When you are 50% Medi-Cal and the reimbursement is not adequate to cover costs, there’s absolutely no way you can put aside the money necessary to take care of infrastructure needs of all kinds -- and certainly not enough to be able to build a building that costs $260 million,” Ryan says.
But when private polling found a 73% favorable reaction to the revamped measure, with its family-member notification alternative, Holman decided to try a ballot initiative again. “The initiative process is a very effective and worthwhile way to effect change,” he says. “And this, family notification, is an issue most reasonable pro-lifers and pro-choicers can agree on. This is easily an issue for the common good.”
Holman notes that the measure has drawn criticism from some conservatives as well as from traditional foes on the left. The former, he says, object that “This just enshrines abortion in the state constitution.” But, he counters, “you have to pick your battles. [Prop. 4] is a reasonable position for a pro-lifer to take. It can save a lot of lives.” When the forces behind the two earlier initiatives reorganized last year as “Friends of Sarah” and set out to collect the 694,354 valid voter signatures they’d need to qualify the amendment for a third try, Holman contributed approximately $1.4 million. He also encouraged two Southern California family trusts built on real estate fortunes -- the Lenawee Trust, of Irvine, and the Caster Family Trust, of San Diego -- to donate $100,000 each. Don Sebastiani, Sonoma winery owner and former California assemblymember, has once again stepped forward -- this time with $530,000.
Proponents of Prop. 4 note that the opposition heavily outspent them in both their two previous campaigns. According to the California Secretary of State’s tally, expenditures by the pro-73 and pro-85 forces totaled $5.7 million for the two elections, while opponents, led by Planned Parenthood, put $12.4 million into counter-efforts. The pattern is expected to be repeated in this election cycle.
In the early stages, the supporters of Prop. 4 held the financial advantage, largely because they had to raise funds in 2007 to pay for polling and signature collection to put the measure on this November’s ballot. As of July 31, the Yes side reported contributions of almost $2.4 million. But, as in previous campaigns, Planned Parenthood’s nine local California chapters and other opponents quickly pooled some $4.4 million to defeat the measure, surpassing the $4 million they amassed to counter Prop. 85. Most of that paid for the TV “bubble” ads proponents believe determined the outcome. Backers did no television advertising of their own and they do not expect to go that route for Prop. 4 either, says Rhomberg. Instead they will rely mainly on grassroots media like bumper stickers, yard signs, fliers, church bulletin inserts, community events, and presentations before local groups.
“We all want teens to talk to their parents,” insists Kneer. “In an ideal world, great. In the real world, not.”
For those girls who fear parental rage if they reveal their wish to terminate a pregnancy, she says, the revamped amendment “just makes a bad situation worse. I think [the proponents’] goal is to punish teens [who get pregnant]. If not, they wouldn’t have put that high a hurdle in front of them.”
Parental notification laws have been enacted in 35 states since the United State Supreme Court’s 1973 Roe v. Wade decision legalizing abortion. In 1987 the California Legislature passed a law requiring a minor seeking an abortion to obtain a parent’s consent. Opponents went to court and after a decade of litigation the law was ruled unconstitutional.
Although the California statute included a judicial bypass alternative, the state Supreme Court struck down the provision in 1997, ruling that it was not compatible with the basic right to privacy guaranteed by the California Constitution. Concluding that the decision made it unlikely any law mandating parental involvement would pass constitutional muster before this state’s high court, notification backers have sought to have California voters amend the Constitution itself.
The ACLU’s Crosby argues that embedding such a law in a document as fundamental as the state Constitution -- particularly one that runs to eight pages and dictates the wording of specific forms to be provided by the Department of Health Services -- is a poor way to make policy.
“This really is an incredibly detailed regulation of a health care procedure,” she says. “I’ve never seen anything like it in a state constitution. And there would be no way to modify it except by another constitutional amendment.”
Crosby also objects to the Prop. 4 clause permitting an adult family member other than a parent to be notified, which she describes as “a fake option for teens living in a dangerous home.” In order to avoid informing a parent, Crosby asserts, the girl must claim to the obstetrician that she herself has been seriously mistreated in the past, and she must describe the “pattern” of abuse with full knowledge that the physician is required by law to include a copy of her statement in her medical record and give it to the substitute family member and the police. “This is putting a teen in an impossible position,” Crosby argues.
Kneer of Planned Parenthood believes that Prop. 4’s definitions are too narrow. “Even if a teen saw her older sister getting beaten after telling her parents she was pregnant, it wouldn’t meet the criterion. The abuse has to be related to her.”
Opponents also worry that Prop. 4 creates an unprecedented liability for the physician who performs an abortion, since a woman has until the age of 22 to sue an abortion provider for claimed negligence if a parent wasn’t informed. Furthermore, a parent who believes he or she was wrongfully denied notification can bring suit any time within four years after he or she “discovers or reasonably should have discovered” the failure. “This is just meant to intimidate providers,” Kneer suggests.
Prop. 4, like Prop. 85, does offer a girl under 18 who wants an abortion without telling her parents a third alternative to a claim of abuse or a “clear and convincing” petition to a juvenile court judge (subject to appeal if denied). She can ask her mother or father or guardian for -- or be voluntarily gifted with -- a signed and dated advance waiver of the notification requirement. It must bear a notary’s seal unless the form is hand-delivered to the abortion provider by the parent. It may be valid for 30 days, or until a specified date, or until the girl’s 18th birthday. Kneer dismisses this option as unrealistic. “They’re trying to sound so enlightened,” she says.
But the equipment, facilities, and staff -- including specialists and subspecialists such as pediatric gastroenterologists, nephrologists, and hematologists -- necessary to provide these services are expensive. On average, more than 50% of patients at children’s hospitals are enrolled in Medi-Cal, the state Medicaid program for low-income residents, and Medi-Cal reimbursements often do not cover the actual cost of care. The portion of Medi-Cal patients at Children’s Hospital Los Angeles and Children’s Hospital Central California in Madera is even higher -- 70%.
In addition, seismic upgrade deadlines are approaching in 2013 and 2030, when California hospitals must comply with the state’s stringent building standards for earthquake safety. Many of the hospitals will not be able to meet the seismic-upgrade deadlines, according to the 2007 RAND report. Those that don’t upgrade face the risk of closure. Children’s Hospital of Orange County exemplifies some of the pressures. Over the last ten years its average daily number of patients has increased from 65 to 165, a number that Dave Schinderle, vice president of finance, expects will reach 180 in the coming fiscal year. The hospital has used Prop. 61 grant funds to remodel and expand primary care and specialty clinics, build a 22-chair outpatient infusion center that opened in June, and improve its patient records. It was the first children’s hospital in California to adopt a full electronic health record system; such systems improve health care efficiency, effectiveness, and patient safety over the long term, although the up-front cost can be steep.
Schinderle also sees a number of other troubling trends that bode ill for the bottom line at his hospital. Among them are the closure of pediatric services at acute care hospitals in the Orange County region, which shifts a larger patient load onto children’s hospitals; a decline in philanthropy; and the high cost of borrowing.
“Debt options have become complex and very, very difficult because of the subprime mortgage mess that you read about in the paper every day,” Schinderle told the Senate and Assembly health committees. “Without the grant funds,” he added, “many projects like ours might not be possible.”
Aside from the specialty and subspecialty care they provide, children’s hospitals differ from other hospitals in that their services are regional rather than local. If a facility were to close, patients and their families would have to travel many miles to receive similar specialty care elsewhere.
No one predicts that any of the children’s hospitals would close if Prop. 3 failed. Instead, hospital officials foresee possible cutbacks in services and/or staff, or a diversion of resources from one or more services to others, as the facilities try to cope financially. They cite the recent turmoil at Children’s Hospital Oakland, a 191-bed facility where 67% of patients are on Medi-Cal, as an example of what could happen if funding doesn’t keep pace with demand. Voters in Oakland resoundingly defeated a $300 million parcel-tax measure in February that would have given the hospital a sorely needed cash infusion. Subsequently, on July 1, Children’s Hospital Oakland laid off 84 of about 2,600 employees, the same day California began imposing a 10% cut in Medi-Cal reimbursements.
“It’s a challenging time for pediatric health care providers,” Frank Tiedemann, the hospital’s president and CEO, said after the lay-offs were announced.
Short contends that “the proponents of ‘Sarah’s Law’…are committed to protecting young girls from the dangers of secret abortions. These dangers include not only the medical risks of surgery kept hidden from parents…but also the physical and emotional risks to girls victimized by sexual predators who use secret abortions to cover up their crimes.”
Proponents plan to spread their message through emails, blogs, and popular multimedia Web sites like YouTube. Their own Web sites are offering $3,000 in prizes to amateur producers of YouTube video ads that promote Prop. 4 through, for example, “the story of a young girl you know... a spoof of arguments from the other side... animation... [or] Sarah’s story.” (Proposition 4 Web sites: YesOn4.net)
Advocates claim Planned Parenthood opposes parental notification because the nonprofit organization provides abortions in many of its 100-odd clinics statewide and thus has a financial stake in maintaining the status quo. Kneer responds that abortion accounts for only 3% of the organization’s services -- which are primarily focused on preventive care, sex education, and contraception. Moreover, she says, more than 90% of Planned Parenthood patients qualify for Medi-Cal, which will pay for abortions, but its reimbursement rates are notoriously low and have long been frozen. Federal funds do not cover abortion. “No one can make money on Medi-Cal abortions,” insists Kneer.
Prop. 4 advocates stress the ironic disparity when a minor is required to get parental permission to enter a tanning salon but can have an abortion without anyone in the family knowing. They contend that many girls under 18 are, in the words of Dulaney, “impregnated by adult sexual predators who, under California law, are hiding their crimes of statutory rape by coercing their victims to have secret abortions.”
Holman, the father of four daughters between the ages of 12 and 21, says Prop. 4 is “progressive legislation for a progressive state.”
Kneer disagrees. The ruling by the California Supreme Court that invalidated the 1987 parental consent requirement was based on “overwhelming evidence in the trial that these laws are harmful,” she says. “They cause teens to do desperate things.”
Since then, California’s fiscal situation has become more precarious as state revenues plunge in the wake of a severe economic downturn. A political deadlock over how best to close the budget gap, currently hovering at around $15 billion, has caused some nail-biting among officials at children’s hospitals who wonder what impact, if any, the wrangling and ultimate outcome will have on Prop. 3’s fate. Although they are hopeful that the measure’s focus on children’s health care needs will be persuasive, a Field Poll in the second week of July found that an increasing proportion of registered voters -- 68% -- considered the state budget deficit to be a “very serious problem.”
As of late July, the California Children’s Hospital Association had conducted three polls within the previous six months to gauge voters’ sentiment regarding Prop. 3. The ranges of support and opposition in these polls were 51% to 58% and 38% to 41%, respectively, according to Dooley, the association’s president and CEO.
A CCHA campaign to promote Prop. 3 in the months ahead will mirror the successful campaign four years ago for Prop. 61. The association is producing a TV commercial that again will feature actress Jamie Lee Curtis.
CCHA will also host a Web site, which is scheduled to go live earlier in the campaign season than in 2004, to accommodate California’s increasing number of absentee voters. Some individual children’s hospitals are planning local events, such as presentations by public speakers, to garner community support.
Of 35 states with operative “parental involvement” laws, 22 require a minor to obtain parental consent for an abortion, and two -- Mississippi and North Dakota -- require the consent of both parents. A 24-hour waiting period between counseling and the abortion is required in 21 states; the waiting period is 18 hours in Indiana, one hour in South Carolina, and the “prior day” in Arkansas.
Proponents of Prop. 4 assert that parental notification and consent laws have been responsible for substantial reductions in pregnancies and abortions among minors. Data to support this assertion are mixed. Nationwide, according to the Federal Interagency Forum on Child and Family Statistics, the birth rate among married and unmarried teenage girls between the ages of 15 and 17 increased from 21 births per 1,000 in 2005 to 22 births per 1,000 in 2006 after falling steadily since 1991 (America's Children in Brief: Key National Indicators of Well-Being, 2008). The birth rate among California teenagers also rose for the first time in 15 years in 2006, though by less than 1%: from 37.2 to 37.8 (“California Teen Birth Rate Increases First Time In 15 Years, Report Says,” Medical News Today, May 23, 2008) births for every 1,000 females between the ages of 15 and 19, according to the California Department of Health Services. (Birth rate is often used as a proxy for pregnancy rate, but it is affected by increases or decreases in spontaneous and induced abortions and is thus not representative of the true pregnancy rate.)
In 2000, according to estimates by the Guttmacher Institute, a research organization focused on sexual and reproductive health, California had the seventh-highest teenage pregnancy rate of any state -- an estimated 113,000 annually -- of which 37% ended in abortion (Guttmacher Institute overview page on abortion).
Although California is one of three states that do not collect and report official abortion statistics, the Guttmacher Institute conducts its own periodic surveys of all known abortion providers in the 50 states. Its 2005 data indicate that of 887,900 California women between the ages of 15 and 44 who became pregnant that year, 23% -- 208,430 -- obtained an abortion. That represents a rate of 27.1 abortions per 1,000 women of reproductive age, a decline of 13% since 2000, when the rate was 31.2 abortions per 1,000 women. California’s Medi-Cal program indicates it funded 94,602 abortions in 2005. Girls under age 15 accounted for 453 of these procedures and girls between the ages of 15 and 17 accounted for 6,204.
Opponents of Prop. 4 emphasize that without any new state laws the abortion rate has dropped faster in California than in the nation overall. Guttmacher Institute data show the national abortion rate to have declined 9% since 2000.
Opponents of the initiative fear that a parental notification law could influence some teenagers to delay medical care or turn to self-induced or unsafe abortions. According to the nonpartisan state Legislative Analyst’s Office (LAO), however, “studies of similar laws in other states suggest that the effect of this measure on the birth rate for California minors would be limited, if any.” Were it to result in a decrease in abortions in the state, the LAO observed, that might be offset by out-of-state abortions. The nearby states of Oregon and Nevada have no legal restrictions.
The principal opponents of Prop. 3 include Lewis K. Uhler, founder and president of the National Tax Limitation Committee, who held several state posts under former Gov. Ronald Reagan; Edward Costa, president of People’s Advocate, which was founded by Paul Gann, co-author of Prop. 13 in the late 1970s; and Assemblyman Ted Gaines (R-Roseville), a member of the state Banking and Finance, Health, and Labor and Employment committees. Other opponents include James V. Lacy, Director of American Conservative Union and Jon R. Leischman, Publisher of Flashreport.org.
As of mid-August, according to CCHA, about three dozen organizations, elected officials, and prominent individuals in the state had endorsed Prop. 3. They include the California Medical Association, the California Hospital Association, the American Academy of Pediatrics, the Children’s Defense Fund, the League of Women Voters of California, State Treasurer Bill Lockyer, U.S. Representative Jim Costa ( D-California), and Assembly Speaker Emeritus Fabian Núñez (D-Los Angeles), none of which endorsed Prop. 61. Gov. Arnold Schwarzenegger, who opposed but didn’t campaign against Prop. 61, has not announced his stance.
Among influential organizations that have not yet officially taken a position on Prop. 3 are the California Association of Public Hospitals and Health Systems, the California Nurses Association, and the California Chamber of Commerce.
Some hospital groups, while sympathizing with the plight of children’s hospitals, may again be reluctant to enter the campaign fray, as they were in 2004, because many types of hospitals, not just those specializing in pediatric care, are feeling pinched and won’t reap any financial gain if Prop. 3 passes. Operating margins at more than half of California hospitals fell below the break-even point long ago, in 1999, according to an analysis published in the journal Health Affairs (Harrison, M.G., and Montalvo, C.C. “The Financial Health of California Hospitals: A Looming Crisis” Health Affairs 2002;21(1): 118–126).
Tom Riley, CEO of the Cal Capitol Group, a government and public relations consulting firm in Sacramento, worked on the pro-Prop. 61 campaign in 2004 when the state was facing a budget crisis. But the fiscal situation this year seems especially grim, he says, given the variety of ills on a number of economic fronts.
“It’s bad,” Riley says. “There are a lot of doom-and-gloomers out there.”
The outcome of budget deliberations, he believes, could affect Prop. 3’s fortunes. The big question is whether the impact will be positive or negative.




