July 19, 2013

Medi-Cal cuts threaten California

C. Duane Dauner and Dave Regan The governor and legislative leaders are rightly proud to have enacted a state budget, meeting the constitutional deadline. But that doesnt mean their financial responsibilities to the people of California are complete. Absent immediate action by lawmakers and Gov. Jerry Brown, the 2013-14 state budget might also be remembered for the damage it caused to Californias most vulnerable residents. Medi-Cal is the safety net that keeps our mothers, fathers, brothers, sisters and children healthy. It is vitally important to the success of Californias health care delivery system, with one in five of the states residents depending on the program for health insurance. Right now, this safety net has been ripped open, leaving our most vulnerable people and the states health care system in jeopardy. In 2011, when the state had a massive budget deficit, a draconian law was enacted with an across-theboard cut to Medi-Cal, leaving California with the lowest reimbursement rates in the nation. Instead of using a scalpel and making targeted reductions, Sacramento took a sledgehammer to health-care providers that will hit hospital-based skilled nursing facilities, physicians and home care services particularly hard. We know what some people may be thinking. The state had to make cuts and we all need to absorb our fair share. Thats a valid point, but the cuts were neither fair nor real in terms of saving the state money. Heres why: Sacramento cut back those hospital-based specialty services an effective 27 percent. Thats more than one-fourth of their Medi-Cal dollars. It doesnt mean that the patients go away or become ineligible for Medi-Cal. Instead, the services they need most and are most effective would disappear as providers have no choice but to eliminate services and close facilities. The result is that taxpayers will pay more for alternative services that are more expensive, less effective and could require an indefinite treatment period. Additionally, many elderly patients will be forced to move hundreds of miles away from their families. Cuts on the table also include a 10 percent reduction in Medi-Cal reimbursement rates to physicians and other health-care providers. With rates already the lowest in the nation, and practice costs arguably the highest, physicians will simply no longer be able to accept new Medi-Cal patients and keep their doors open. With millions of new patients coming into Medi-Cal coverage over the course of the next year, ensuring access to care should be a priority.

These cuts go far deeper than senior skilled-nursing facilities, affecting access to health care in rural areas as well as for Californias underserved communities. For example, home care already has been cut once and is facing another 4.6 percent reduction, eliminating critical services for seniors and people with disabilities, including disabled children, and forcing some of them out of their homes and communities into more expensive care. How does that make sense financial or otherwise? Californias elderly, sick and disabled residents will take the brunt of these ill-advised cuts. Additionally, these cuts would have consequences like aftershocks to an earthquake. Government will pay more and get less while at the same time killing approximately 36,000 middle-class jobs and $2 billion in economic activity. Less activity means less tax revenue, which brings back the budget deficits that Sacramento has tried so hard to eliminate. Fortunately a large bipartisan coalition of legislators is supporting an effort to reverse the Medi-Cal cuts, expand the programs eligibility requirements and restore modest safety net services to Californians. Republicans and Democrats, unions and businesses, urban and rural areas all want the cuts to be stopped. Its not partisan or political this is about California and its future. Its simple: Schools and health care can and should be funded. As the Legislature and governor establish priorities now that the state budget has been signed, stopping the Medi-Cal cuts has to be our top priority, respecting people who helped build our Golden State and keep it going strong today. C. Duane Dauner is president and CEO of the California Hospital Association. Dave Regan is president of Service Employees International Union-United Healthcare Workers West.