Sharp Cuts in Health Services Predicted : Medicine: Under Wilson’s plan, 600,000 Californians could lose Medi-Cal benefits. L.A. County shortfall could be $1 billion.

Already thinly funded county health programs would face sharp service reductions under Gov. Pete Wilson’s proposed state budget, among them the possible elimination of state medical services for 600,000 Californians and state payments for wheelchairs and walkers for the temporarily disabled.

Wilson’s budget anticipates an 8.9% increase in spending for Medi-Cal, the health care program for the poor. But the increase would only be possible if the federal government agrees to reimburse the state an extra $1.4 billion annually that the Wilson Administration contends the government owes for services provided to immigrants and refugees.

Most lobbyists and government insiders believe an increase in federal aid is highly unlikely, given the huge budget problems faced by policy-makers in Washington.

Even though he envisions an overall increase for Medi-Cal, Wilson is proposing to cut the state’s share by 3.2%, anticipating that federal money will bring the funding for the program up to the level he wants.

Wilson seeks the state cut even though the Medi-Cal program is expected to add 380,000 Californians in the new budget year, bringing the total enrollment up to 5.4 million. During this budget year, the state and federal governments will spend an estimated $13.2 billion on Medi-Cal, with the costs split roughly 50-50.

Spending would jump to $14.3 billion in the new budget year, but that assumes the federal reimbursement.

But, even assuming Wilson wins the dispute with the federal government, the budget proposes to eliminate benefits paid for a variety of services, including dental care for adults, acupuncture and chiropractic services, non-emergency transportation, podiatry, psychological counseling, independent rehabilitation centers, medical supplies and speech and audiology services.

If Wilson loses the fight with the federal government, his budget writers have prepared a second list with more than $1 billion in cuts.

The second cut list includes plans to drop Medi-Cal benefits for 600,000 medically needy adults and children--those who do not qualify for welfare but are so close to the poverty level that they cannot afford medical care for themselves--to save $370 million annually. Pregnant women would be allowed to keep their benefits.

Under the second cut list, another $356 million would be trimmed by eliminating money to provide the poor with wheelchairs, walkers and special canes, along with hearing aids and incontinence supplies, as well as ending optometry, prosthetic and orthotic services and canceling funding for heroin detoxification centers.

In keeping with earlier policy priorities, Wilson is also adding to Medi-Cal services by budgeting funds for prenatal care for poor pregnant women, a special treatment program for substance-abusing pregnant women and health services for children and infants.

An added threat to health care funding is contained in Wilson’s proposal to take $2.6 billion in property tax revenues now going to cities, counties and special districts and give it to schools. If the tax loss were to be spread equally among the agencies--and it has not been decided how the split would be made--counties would lose about half that money.

In Los Angeles County, only hours after the budget was released, Chief Administrative Officer Richard Dixon said the county Department of Health Services would have to cut $195.6 million from its $2.2-billion budget to meet the governor’s proposed level of funding for the new fiscal year. The department operates six county hospitals and 47 clinics.

One of those hospitals, County-USC Medical Center, is the largest hospital in the nation.

Dixon has estimated that the Wilson budget could leave the county with a shortfall of $750 million to $1 billion.

With Wilson’s budget numbers out, Board of Supervisors Chairman Ed Edelman said, “Dixon’s prediction may be low. (The shortfall) may be higher than $1 billion.”

Even before the new projections were made, the Department of Health Services was struggling with a $180-million shortfall in its current health services budget.

Irv Cohen, chief financial officer for the department, said the proposed cuts, if they hold up, would create “devastation” in the county health system. He said the Board of Supervisors might have to consider closing a big hospital. “We’ve been cutting back every year since Proposition 13 (in 1978). This is the worst I’ve ever seen it.”

David Langness, a spokesman for the Hospital Council of Southern California, predicted that the budget plan could leave as many as 1 million Californians without medical or dental care.

Hector Tobar contributed to this story from Los Angeles.