Proposed $300-Million Medi-Cal Budget Cut Rejected by Assembly

Assembly Democrats and a handful of Republicans voted to reject Gov. George Deukmejian’s proposed $300-million budget cut in the state Medi-Cal program Wednesday after convening the lower house in a rare “committee of the whole” to condemn the cuts as penny-wise and pound-foolish.

The vote to add the funds back to the governor’s proposed $39.3-billion budget was 46 to 21, with all the no votes cast by Republicans.

Before the vote, GOP leaders denounced the extraordinary committee of the whole hearing as a publicity stunt designed to embarrass the governor.

Republican Leader Pat Nolan of Glendale refused to vote on the $300-million budget amendment. Like the governor, Nolan insists that the state cannot afford to maintain the $5-billion Medi-Cal program, which serves 3 million low-income Californians at its current level.

“How can the Assembly consider any substantial increase in the budget until the Democrats reveal how they plan to pay for it?” Nolan asked before the hearing began.

Tax Revenues

Democrats argued that tax revenues currently are coming in at least $300 million ahead of projections. They noted that the state actually needs to provide just $150 million to keep the Medi-Cal program whole, because the federal government pays the other half.

The majority party also openly acknowledged that the hearing was designed to turn the news media spotlight on the Medi-Cal problem. In that respect, it was a success. Nine television camera crews were on hand to cover the novel committee of the whole hearing--nine more than show up for a typical budget hearing on the Medi-Cal program.

Normally, such hearings would be held by a committee in a meeting room, rather than by the full Assembly in the Assembly chamber. This year, however, Assembly Democrats opted to bypass the committee process in a strategy designed to gain maximum publicity for their criticisms of the governor’s budget.

Assemblyman Bruce Bronzan (D-Fresno), who introduced the amendment restoring the budget cut, said Medi-Cal was the state’s “leanest” program but also its “meanest” because tight state spending policies--coupled with the soaring costs of malpractice insurance in specialties like obstetrics--had driven numerous doctors and hospitals to drop poor and elderly patients eligible for Medi-Cal benefits.

Dr. Frederick Armstrong, president of the California Medical Assn., warned that “if there are further reductions, I’m afraid (the program) will be strained to the point where access to medical care will not be available to a large number of Medi-Cal recipients.”

Armstrong and other health authorities said the proposed cuts would not save money but ultimately drive up costs because patients denied preventive health care would eventually be driven to seek care in high-overhead emergency rooms or acute-care wards.

A major problem area is obstetrical care, the health authorities testified.

Richard Brown, an associate professor at the UCLA School of Public Health, said the program’s already “low fees have raised barriers for pregnant Medi-Cal women.”

Accept Patients

Brown said there are 15 California counties in which pregnant women on Medi-Cal can not find an obstetrician who will accept them as patients. In 11 other counties, he said, there are “nearly 1,000 Medi-Cal eligible women of child-bearing age for every obstetrician who will care for them during pregnancy.”

Brown and other doctors testified that inadequate prenatal care has already led to increased rates of infant mortality, low birth weights and various disabling conditions, such as mental retardation, that eventually cost the state much more than it would to maintain a system that produces healthy babies.

The most dramatic testimony came from Dr. Alex Stalcup, chief of emergency services at Children’s Hospital of Oakland. He said it was common for children of poor, inner-city families to be forced to undergo long, painful and costly treatment for diseases and illnesses that could have been prevented by proper immunization or early diagnosis.

Stalcup said he still treats inner-city children for whooping cough and scarlet fever, diseases that have been virtually eradicated in many communities because of vaccination and early treatment.

Care Covered

Such care is covered under the Medi-Cal program, but the witnesses said that the state reimburses doctors only about 40% of their real costs, so fewer and fewer doctors are willing to treat patients under the program.

Stalcup and other expert witnesses said this results in a downward spiral that places more demand on the relatively few doctors and hospitals who do take such patients. This in turn discourages or prevents people eligible for Medi-Cal benefits from seeking care until medical problems can no longer be ignored, they said.

“Our clinics are seeing 1,000 more cases this month than they saw this time last year,” Stalcup said.

He said his emergency room was experiencing the same kind of increase.

“The tragic thing is most of these kids are sicker than they need to be,” he said.

Stalcup said it cost $1,800 to provide full care for a pregnant woman--from the initial office visit through birth--including vitamins and diet supplements. But he said so few obstetricians were willing to treat Medi-Cal patients that many potentially normal pregnancies were resulting in premature births or underweight babies that require emergency, intensive-care treatment that can cost the state $2,000 or more a day.

Legislators Lectured

Stalcup lectured the legislators that monetary costs were not even the chief issue.

“The simple reason you should vote to restore these cuts is that it is right to do. It is humane to prevent suffering when you can do it. It’s moral to take care of people who can’t take care of themselves,” he said.

Democrats criticized Deukmejian for proposing $300 million in cuts without spelling out which health-care programs the money would come from. A Deukmejian Cabinet official, Health and Welfare Secretary Clifford Allenby, told lawmakers that the governor had still not decided on a plan.

The vote on the Medi-Cal cuts Wednesday is but the first skirmish in what should be a lengthy budget fight. Eventually, Democrats will need enough Republican votes to produce a two-thirds, or 54-vote majority, to pass a final Assembly version of the budget.

The amendments now being considered, however, need only 41 votes--a simple majority--for approval. The Senate, meanwhile, is producing its own version of the budget, which will eventually have to be reconciled with the lower house’s in a conference committee.