State lawmakers are nearing a deal on a budget for the fiscal year that begins July 1, and the projected revenue bounty makes it possible for Sacramento to undo some of the most damaging cuts made to state programs during the economic downturn while still paying off debt and building reserves. That’s good news for the state’s schools, courts, colleges and universities, and welfare-to-work program, all of which are in line to recover some lost funding. But lawmakers shouldn’t forget Medi-Cal, the health insurance program for impoverished Californians, which has been weakened by a cut of up to 10% in the fees paid to doctors and other providers. The arbitrary cut has made it more difficult to provide care to the poorest Californians in a cost-effective way. In that sense, it’s self-defeating.
California pays healthcare providers lower rates than any other state’s Medicaid program, and as a consequence, many doctors simply aren’t willing to treat Medi-Cal patients or take on new ones. Doctors in the program say it’s becoming increasingly hard to find specialists willing to take referrals of Medi-Cal patients. The reduction that went into effect over the last year only exacerbated these problems just as the federal healthcare law was shepherding millions of additional people into the program.
It’s hard to quantify the effects, but the situation in pediatric dentistry illustrates the problem. Dental care is one of the most effective forms of preventive medicine, and those who don’t get it may wind up needing far more expensive treatment for more acute problems, such as abscessed teeth and infected gums. But according to the advocacy group Children Now, there’s only one dentist in the Denti-Cal program for every 700 kids, and half of them won’t take new patients. Four counties have no dentists that accept Denti-Cal at all.
The rate reduction has been mitigated somewhat by the state’s efforts to shift Medi-Cal patients into managed-care plans, which offer more coordinated care and a more complete network of providers. Yet about 3 million Californians remain outside of managed-care plans. By driving providers out of Medi-Cal, the state will succeed in making routine care less accessible. That means more poor people will be treated for more acute problems in emergency rooms, with Medi-Cal still picking up the tab.
Meanwhile, providers compensate for low Medi-Cal fees by shifting costs onto the government and patients with private insurance. So the savings Sacramento realizes on one line item in its budget don’t necessarily translate into savings for the public. Rather than paying Medi-Cal doctors artificially low fees, Sacramento should look for more meaningful ways to reduce spending on healthcare. And in the meantime, lawmakers should reverse the Medi-Cal cuts before the access to providers gets worse.