Newspapers Examine Health-Related Provisions of State Budget Proposal

The San Francisco Chronicle on Wednesday examined Gov. Arnold Schwarzenegger's (R) proposal for a prescription drug discount program, called Cal Rx, in his fiscal year 2005-2006 state budget plan, which otherwise "imposes significant cutbacks on state health care spending" to help address a projected $8.1 billion deficit (Colliver, San Francisco Chronicle, 1/12).

Schwarzenegger's proposal would reduce state funding for some health and human services programs by $1.2 billion but increase overall funding for health and humans services programs by 4.6% to $26.7 billion. Schwarzenegger said in his budget announcement that he expects to save more than $1 billion by negotiating with drug companies and pharmacists for discounted medications purchased by Medicaid beneficiaries and hospitals (California Healthline, 1/11).

The administration has said the program, which would receive $3.94 million under the budget proposal, would result in roughly a 40% discount on prescription drug prices for low-income state residents.

Dan Carson, director of the health section for the California Legislative Analyst's Office, said, "In the state budget generally, as in the health portion of the budget, there are not a lot of new programs. At a time when there's a strong downdraft, it's saying something (to add the Cal Rx program)."

Reaction

The program is supported by "a number of groups," including the California Medical Association, the California Pharmacists Association and AARP.

Lynn Rolston, CEO of the pharmacists group, said, "The governor seems absolutely confident he can bring the drug companies to the table to talk about these discounts in a meaningful way. As long as that's true, the pharmacists are willing to do a discount that's reasonable."

Former Rep. Billy Tauzin (R-La.), now CEO of the Pharmaceutical Research and Manufacturers of America, said in a statement that Cal Rx "balances the immediate health needs of patients without compromising on the promise of future research and development."

Several consumer groups and legislators have said the governor's plan would offer an unknown level of savings and relies too heavily on voluntary discounts from drug makers.

Jerry Flanagan, director of health policy for the Foundation for Taxpayer and Consumer Rights, said, "Gov. Schwarzenegger's health cuts mean the lowest-income Californians will have to pay more for health care, and the rest will go unprotected in the marketplace." He added, "Instead of real reform, the governor has put the drug companies in charge and let them set the rates" (Colliver, San Francisco Chronicle, 1/12).

Labor Reaction

In related news, initiatives in Schwarzenegger's budget that would "weaken labor's clout" caused union officials this week to plan several counter-initiatives, including one measure that would "reduce the price of prescription drugs," the Chronicle reports.

According to the Chronicle, Schwarzenegger's budget and a potential special election later this year have "set up a showdown between big business and unions" that could decide who will "set the agenda for years to come." Union officials this week launched a "campaign-style effort" to inform members about the governor's budget and labor's proposals, the Chronicle reports.

Art Pulaski, executive secretary-treasurer of the California Labor Federation, said Schwarzenegger "is essentially proposing a cultural revolution," adding that with all of the governor's proposals, he "seems to want to attack workers at every step."

Margita Thompson, Schwarzenegger's press secretary, said that the governor is not "going after anyone," adding, "He's going after fixing the state's problems" (Martin, San Francisco Chronicle, 1/12).

Editorials, Opinion Piece

Summaries of recent editorials and an opinion piece addressing Schwarzenegger's budget proposal appear below.

Contra Costa Times: Schwarzenegger's budget "hits health and welfare services ... hard," in part by proposing to "shift more people on Medi-Cal to managed care," but "the state's health and welfare spending" still would increase by $1.2 billion, illustrating the difficulty of "significantly" improving the budget "given the financial situation the state has gotten itself into," a Times editorial states (Contra Costa Times, 1/12).

Orange County Register: Citing the $1.2 billion increase in health care spending, a Register editorial states that Schwarzenegger's budget proposal is "realistic." Schwarzenegger "must stick to his guns during negotiations and not give up too much ground, particularly on proposed cuts," according to the editorial (Orange County Register, 1/11).

San Diego Union-Tribune: Schwarzenegger is "right to reject ... the built-in spending hikes contained in a panoply of costly health and welfare programs" because "[s]lowing the growth of such entitlements is essential to eliminating the structural deficit that has plagued California's budget since the dot-com bust five years ago," a Union-Tribune editorial states (San Diego Union-Tribune, 1/12).

Sacramento Bee: Schwarzenegger's primary goal in his budget proposal is "no new taxes," a Bee editorial states, adding that Schwarzenegger has yet to ask the "most important questions for a governor: What are the state's most pressing needs? And are his budgets making those needs even more serious?" (Sacramento Bee, 1/11).

Dan Walters, Sacramento Bee: An overall "$1.7 billion hit on health and welfare programs" and other funding reductions in Schwarzenegger's proposed budget "face tough sledding in a Democratic-controlled Legislature," Bee columnist Walters writes in an opinion piece (Walters, Sacramento bee, 1/11).

Broadcast Coverage

KPCC's "Air Talk" on Tuesday included a discussion of the budget. Guests on the program included Jonathan Fielding, public health director for the Los Angeles County Department of Health Services; J.J. Jelincic, president of the California State Employees Association; Assembly members Rick Keene (R-Chico) and John Laird (D-Santa Cruz); H.D. Palmer, a spokesperson for the Department of Finance; Richard Riordan, education secretary; and Sen. Jack Scott (D-Pasadena) (Mantle, "Air Talk," KPCC, 1/12). The complete segment is available online in RealPlayer.

In addition, KPCC's "KPCC News" on Monday reported on the "relatively modest hits" to health care funding in the budget. The segment includes comments from Assembly member Wilma Chan (D-Oakland); Flanagan of FTCR; David Jansen, chief administrative officer for Los Angeles County; and Sen. George Runner (R-Lancaster) (Rabe, "KPCC News," KPCC, 1/10). The complete segment is available online in RealPlayer.

This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.