Governor Newsom’s proposed budget harms California’s most vulnerable populations and the doctors who care for them
Latinx Physicians of California (LPOC), a statewide, nonprofit, physician membership organization committed to supporting and uplifting Latinx medical professionals and patients across the state, expressed serious concerns about Governor Newsom’s proposed state budget released in May, and its potential impact on the state’s most vulnerable communities and the physicians who care for these communities.
“A huge number of Latinx medical professionals – including a majority of LPOC physicians deliver care in hard-pressed parts of California and serve a predominantly low-income population in healthcare deserts,” said LPOC Board Chair Dr. James Cruz. “Governor Newsom’s proposed budget would directly harm these providers and their patients, potentially leading to the closure of health care clinics and fewer physicians in small practices able to provide care to Medi-Cal recipients in low-income, disadvantaged communities.”
The most significant change that will impact Latinx physicians and patients is the reduction of $6.7 billion allocated from the Managed Care Organization (MCO) Tax, which will result in the planned Medi-Cal provider reimbursement rate increase being canceled as of January 1, 2025. Clinics in healthcare deserts across California depend heavily on this reimbursement rate for Medi-Cal patients to stay afloat. Losing the proposed increase and maintaining the already-too-low rate will lead to clinics serving Medi-Cal patients either closing or declining existing or new Medi-Cal / low-income patients.
Furthermore, the proposed budget cuts $280 million in grants over the coming five years as part of the Equity and Practice Transformation Payment Program – a vital modernization program that provides infrastructure and training to ensure that practices incorporate modern information technology requirements, utilization and quality measure data sharing capabilities, and pursue health equity goals to meet current and future state and federal regulatory compliance standards.
One of the largest hazards on the horizon for California’s medical community is the impending severe healthcare workforce shortage. The State of California has previously committed to significant workforce investment programs designed to help qualified individuals pursue a medical career and locate their practice in low-income, underserved, or otherwise disadvantaged parts of the state. The May Revision proposes cuts totaling more than $500 million to healthcare workforce initiatives including community health workers, nursing, social work, the Health Professions Career Opportunity Program, the California Medicine Scholars Program, and more.
Attorney and LPOC board member John Valencia shared that, on May 30, the CA Legislature spearheaded changes to the governor’s proposed health care budget which included MCO tax modifications. However, in short, the Legislature is simply proposing to delay some of the Governor’s proposed Medi-Cal spending until 2026. While this saves the state some money to help bridge the state’s budget funding gap, it does not fully abandon the Governor’s original Medi-Cal budget proposal.
Dr. Cruz expressed his reservations about these proposed cuts: “Every day, LatinX physicians and their physician colleagues do great work to help vulnerable patient and we still have a lot of work ahead of us. Six percent (6%) of all California physicians are Latinx, yet more than forty percent (40%) of our state’s population is Latinx. Any reduction in workforce development funding will, without question, disproportionately set back the progress the Latinx community has made in health equity. LPOC will double down on our efforts to advocate on behalf of our communities to ensure a greater number of LatinX physicians are ready and able to care for all of CA’s vulnerable communities.”
Questions? Contact LPOC: latinxphysicians@gmail.com