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Public Health Care Systems Support Governor Newsom’s Expansion Efforts in the May Revision Budget, Yet Remain Concerned over Pharmacy Proposal

OAKLAND, CA, May 9, 2019 – The California Association of Public Hospitals and Health Systems (CAPH) applauds Governor Gavin Newsom’s (FY 2019–2020) May Revision budget proposal, which reinforces his promise to expand health care coverage and affordability and responds to the social needs of our communities, particularly through housing support. However, we remain concerned over the proposal to restructure pharmacy services in the Medi-Cal program.

To close the coverage gap and improve access in California, Governor Newsom continues his proposal from the January Budget to expand Medi-Cal eligibility until 26 years of age regardless of immigration status. The Governor also included state subsidies to make health care more affordable, targeted at middle-class families who receive health insurance through Covered California.

“Public health care systems have a long history of serving the uninsured, and we are supportive of the Governor’s effort to further expand health care coverage to young adults. As safety net providers, we believe everyone should have access to health care, and this proposal brings us one step closer to making this a reality,” said Erica Murray, CEO and President of CAPH.

The May Revision maintains a payment change for pharmacy services in the Medi-Cal program, in which services provided under the Medi-Cal pharmacy benefit would transition from managed care to fee-for-service by 2021. If enacted, this proposal would result in an estimated $240 million annual loss for public health care systems that participate in the 340B Drug Discount Program, a federal program that helps ensure that safety net systems can provide essential drugs and services for our most vulnerable populations.

“The Governor’s Medi-Cal pharmacy proposal would eliminate the savings public health care systems get from our 340B Drug Discount Program and shift these funds to the State,” said Murray. “We urge Governor Newsom to explore other alternatives that meet the State’s pharmacy goals and protect safety net providers.”

To address the mental health and housing crisis, the revised budget increases investments in workforce training for mental health professionals and adds to January’s proposed $100 million for supportive housing and other services for Whole Person Care, which provides comprehensive, tailored care to California’s most vulnerable patients in local pilots across the state, often led by public health care systems.

“Whole Person Care is essential – by pairing social supports alongside medical care, we are making a real difference in helping our patients. We look forward to working with the State on how these funds will be allocated to pilots,” said Murray.

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About the California Association of Public Hospitals and Health Systems (CAPH)
The California Association of Public Hospitals and Health Systems (CAPH) represents California’s 21 public health care systems, which include county-affiliated systems and the five University of California academic medical centers. Together, these systems form the core of the state’s health care safety net. Though accounting for just 6% of hospitals in the state, public health care systems operate in 15 counties where more than 80% of the state’s population lives. They provide 40% of all hospital care to California’s remaining uninsured and 35% of all hospital care to Medi-Cal beneficiaries in the communities they serve. These 21 health care systems serve 2.85 million patients annually, operate more than 200 outpatient clinic facilities, and provide more than 10 million outpatient visits each year. They operate more than half of California’s top-level burn and trauma centers, and train more than half of all new doctors in hospitals across the state. For more information, visit www.caph.org.

Media Contact:
Sarah Hesketh
Senior Vice President of External Affairs