California Legislation Limits Private Equity & Hedge Fund Influence Over Medical Decision-Making

California is enacting Senate Bill 351 (SB 351), effective January 1, 2026, to limit private equity and hedge fund influence over medical decision-making, and to restrict noncompete clauses for clinical professionals. The bill was supported by the California Medical Association (CMA).

"The signing of SB 351 is a victory for patient-centered care," said Shannon Udovic-Constant, M.D., CMA president. "This new law further protects the integrity of the physician-patient relationship against the expanding influence of private equity in health care.”

“SB 351 was drafted in response to growing concerns about the negative effects of private equity . . .