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May Budget Revise Hits Health Care Hard

Health care reductions made up more than one-third of the additional $6.5 billion Governor Jerry Brown (D) needed to trim since the last budget proposal in January. Five months ago, the governor was only staring down a $9.2 billion deficit. Now it’s estimated at $15.7 billion.

Brown’s new proposal released yesterday included about $2.5 billion in cost reductions to health care programs.

The plan calls for new cuts for hospitals and nursing homes, more cutbacks in Medi-Cal services and another reduction to In-Home Supportive Services.

“There was no magic number, no targets set for what we could contribute to the solution,” said Diana Dooley, secretary of the state Department of Health and Human Services, in addressing the many cutbacks within her agency. “This is where most of the spending is, and the only place you can cut back is the places you’re spending.”

Governor Brown had a similar sentiment, saying that he is only proposing these cuts because he has to do it.

“I can’t redesign reality,” Brown said. “The point is, it’s easy to play gotcha. But when I have to make cuts, and people lose their jobs, that’s something I don’t want to do unless I have to.”

Much of what Brown had to cut, he said, was in health care. “Things that are good in and of themselves,” he said,” have to be cut, or be curtailed.”

Those proposals include:

  • Reducing supplemental payments to private hospitals, along with elimination of public hospital grants and stopping increases to managed care plans for some supplemental public hospital payments.
  • Taking back the 2.4% rate increase to nursing homes, and keeping the 1% set-aside for supplemental payments.
  • Cutting In-Home Supportive Services by 7%, across the board. The plan also includes eliminating payment for household services, such as shopping and meal preparation, from shared living arrangements.

Politicians, advocates and health care stakeholders decried the eroding of the safety net. The California Hospital Association came out with formal opposition to the governor’s plan, saying that it would unfairly take money from public, private and district hospitals.

“It is disappointing that the revised budget includes a rake-off of $150 million from private hospitals and more than $40 million from public hospitals,” said C. Duane Dauner, president of the CHA, in a written statement. “This proposal goes against a 2011 agreement between hospitals and state government…. through the Medi-Cal hospital fee program.” 

On the steps outside the Capitol Building, protesters chanted, “Politicians, shame on you/The people need more revenue.”

Assembly member Holly Mitchell (D-Los Angeles) addressed the crowd, saying that she has chaired 17 budget subcommittee hearings this year alone — all on health care issues.

“Who I remember from all of those hearings,” she said, “is the thousands of mothers, who said if you cut this program, it will have a significant impact on our families.”

That’s what these cuts really mean — impact on families in California, according to Senate member Carol Liu (D- La Cañada Flintridge). “The cuts being proposed all seem to affect poor women and children,” Liu said. “The governor is trying to get the budget straightened out, it’s important, but you can’t get there with just cuts. I mean, is this the kind of society we want to have?” 

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Capitol Desk