CALIFORNIA MUST EXAMINE THE CUMULATIVE IMPACT OF STATE HEALTH CARE BUDGET CUTS BEFORE IT'S TOO LATE

On November 3^rd, the Assembly Budget Subcommittee on Health and Human Services convened a hearing to review the cumulative effect of California’s health and human services budget cuts.  Assembly Member Holly Mitchell, who chairs the subcommittee, said that legislators need to critically examine the actual impact of the cuts made in 2011, as well as those from previous years.

California is waging a multi-front war in the Federal courts and is seeking approval from the Federal government to slash state health care spending.  Although the state is offering “evidence” that the cuts won’t negatively impact state health care services, the real casualties will be the seniors, the poor, and people with disabilities who unquestinably will be denied access to adequate health care and supportive services.  At the hearing, Assembly Member Wes Chesbro criticized the rush to judgment in cutting primary care and supportive services programs that save long-term costs.

On the day of the hearing, the developmentally disabled community protested outside the Department of Health Care Services (DHCS) about cuts it negotiated with the Federal government that are being challenged in the courts.  Advocates for seniors and the disabled are also participating in a possible settlement over the denial of Adult Day Health Care as a Medi-Cal benefit. 

Most recently, the Federal government approved DHCS’ request for a 10% cut in provider reimbursements for a range of Medi-Cal services.  As expected, multiple lawsuits have been filed to halt the provider cuts that are also a core issue being considered in a related case before the U.S. Supreme Court.  The cuts would further reduce California’s provider rates that already are among the lowest in the nation. 

The harsh reality is that the additional rate reductions will really affect patients, not doctors.  They will force providers to decide how many Medi-Cal patients they are willing to see.  The current rates actually cause providers to lose money in treating these patients and an additional cut will mean that fewer providers will agree to treat them.

This outcome causes a ripple effect in the overall health care delivery system.  Patients without access to primary care providers inevitably become sicker by postponing treatment.  In turn, Federally-qualified health centers and hospital emergency departments will be forced to absorb these patients and the state will also pay more costs if they are institutionalized.

In addition, the Federal government will also soon announce whether California can limit doctor and clinic visits to achieve additional Medi-Cal savings.  DHCS claims that they will not negatively impact access to care.  However, advocates know that more providers will refuse to treat Medi-Cal patients, that emergency room visits will require longer waiting times, and that there will be a significant reduction of providers in rural areas.

Assembly Member Mitchell is correct.  The inevitable cumulative ripple effect means that the denial of access to adequate health care will occur downstream after the cuts have been made.  Under this scenario, California’s health care safety net may never recover, let alone meet the challenges of an aging population and the growth in public assistance caseloads.