Health centers brace for cuts due to state budget deficit.

It's too soon to say exactly how Gov. Arnold Schwarzenegger's proposed budget cuts targeting community health centers will shake out, but clearly some Valley facilities are already counting the ways his plan could threaten to eliminate access to care for the region's some 500,000 uninsured.

Schwarzenegger's budget proposal, likely to go through many stages of tweaking in the coming months against a backdrop of heated debate, now calls for cuts exceeding $72 million for the state's health centers and community clinics in order to address a deficit.

The plan calls for caps on enrollment in the state's Healthy Families program, which would put some 200,000 eligible children on the waiting list and likely slash federal matching dollars for the program.

Schwarzenegger also wants to reduce Medi-Cal provider rates back to 1999 levels, a component of the budget proposal that poses the largest threat to so many of the Valley's clinics, indeed those across the state, because the program represents a large portion of their funding stream and also comes with federal matching funds.

"We are very concerned about these proposals and our plan going forward is to work closely with our representatives locally and at the state level to keep the governor abreast of what these cuts would mean for us long term," said Ann Britt, president and CEO of the Valley Community Clinic in North Hollywood, one of the Valley's oldest facilities for the uninsured.

Although the clinic, which logs roughly 5,000 visits a year, has only been accepting Medi-Cal patients since July, it receives roughly $800,000 annually from the state for that and other programs, matched by roughly $400,000 from the federal government, and about $2 million from the county.

The funds also pay for the clinic's on-campus teen pregnancy prevention program and other family planning services.

Valley Community Clinic has also been preparing for the June opening of a new pediatric center, which it was hoping to support through a combination of Medi-Cal and Healthy Family funds.

Budget shuffle

The clinic is now reshuffling its budget goals in preparation for making the new center a self-funded department.

"It's pretty scary," said Britt. "The options for the uninsured are becoming fewer and fewer. We may have to adjust our planning until we know what the budget looks like."

Valley Community Clinic has roughly 60 full-time employees, 50 part time, and about 50 volunteers. So far, there are no plans for lay-offs, Britt said.

The mood is similar across the Valley.

"Like just about everyone else we are just girding for cuts," said Dr. Richard chief medical officer for the Northeast Valley Health Corp., one of the largest community health clinic chains in the country, with 10 locations in the San Fernando and Santa Clarita valleys and a local staff of about 600.

The NEVHC has an annual budget of roughly $35 million. One third of its funding comes through Medi-Cal reimbursements, according to Seidman, covering roughly 150,000 visits a year and some 180,000 regular patients.

Seidman said the proposed cuts would not only harm those who rely on the health centers for care, but also threatens to harm businesses that don't provide health care coverage, such as restaurants and small businesses, and force hospitals to fill in the gaps in coverage.

"Obviously a bigger picture for us is how these cuts could impact access, but we are also concerned about what their impact will be on the economic picture here," said Seidman. "That's a concern that everyone across the state must take seriously."

Girding for battle

Mandy Johnson, CEO of the Community Clinic Association of Los Angeles County, said we can expect to see a "long and protracted battle" over the budget proposal and that up and down the state agencies like hers are ratcheting up their presence in Sacramento, building up alliances and lobbying efforts to keep current programs in tact.

"Clearly, we are very early in the budget process," Johnson said. "But throughout the state everyone is trying to develop relationships. This is a proposal that the legislature has yet to respond to so we are going to be as proactive as possible as we move forward."

Although he supports Schwarzenegger's two ballot propositions set for a vote March 2--a $15 billion borrowing plan to cover the deficit and another balanced-budget amendment to the state's Constitution--Assemblyman Keith Richman said he was also deeply concerned about the proposed cuts in health care included in the governor's budget plan.

But even he agreed, the plan is likely to look very different six months from now, particularly if voters reject either of Schwarzenegger's ballot initiatives because the governor has warned that without their passage, and one cannot pass without the other, cuts will be much deeper and much more painful down the line.

"I have very serious concerns about a number of the proposals, including the medical enrollment caps on Healthy Families," said Richman. "But I'm also saying that the governor's budget is a starting point. It will change many times over."

Richman added that he's sent letters to Washington asking that federal matching funds for the state's programs be kept in place to mitigate future cuts at the state level.