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California's budget woes impacting local health clinics

There's a lot of hurt out there. That's the opinion of the leaders of Merced's safety net health clinics about the state's budget crisis. In its record-breaking 74 days without a budget, the state has cut off payments to the clinics that take care of the working poor. Most clinics haven’t been paid since the last week of July for Medi-Cal charges.

In Livingston, that's Livingston Medical Group. About half of the clinic’s patients are on Medi-Cal, California's form of Medicaid. Federal law keeps Medi-Cal payments going to doctors and pharmacists during the budget impasse, but that doesn’t apply to hospitals, clinics and other institutions.

"We have already borrowed $350,000 from HealthNet, but we might have to borrow another $200,000," said Aurora Garcia, chief executive officer for the clinic.

Livingston Clinic's bank has also loaned the small clinic money, but Garcia said that if the Medi-Cal payments don't come soon, the clinic may have to make some cutbacks.

"The people we take care of have enough struggles without having this happen," Garcia said.Knowing that the legislators who are holding up the budget are still getting paid angers Garcia. "If the legislators are going to do this, they should not get paid until the budget is signed."

At Mercy Medical Center Merced, president David Dunham said that the hospital is about $2.9 million in the hole because of nonpayment of Medi-Cal. Because the hospital is part of a bigger health care organization, that loss of money isn’t hurting the hospital too much, but that doesn’t make the facts any easier to take.

“(The legislators) are basically using our money and not paying us,” Dunham said. “It’s not fair for us to bear the burden of their political impasse.”

Mike Sullivan, the chief executive officer at Golden Valley Health Centers, another local clinic that takes care of a lot of Medi-Cal patients, said that his clinic has taken a hit of about $1.5 million in nonpayment for Medi-Cal claims.

In response to that, Golden Valley has put a freeze on all hiring, and has stopped funding their employees’ retirement fund.

“That’s a big thing. The retirement fund is a lot of money, and it’s important,” said Sullivan.

But Golden Valley, like Livingston, is living on borrowed funding. And while Sullivan is worried about the fallout from the budget impasse, he’s more worried about how the budget might eventually get balanced.

“This crisis is bad and wrong and irresponsible,” Sullivan said. “But what comes when they do enact a budget is scary. They could balance it on the backs of the most vulnerable people, the poor. This is temporary, but that would be permanent.”

Sullivan said that if cuts do happen, if Medi-Cal reimbursements are cut even further, his clinic will also have to make cuts, but that’s not all he’s worried about.

“If they cut the heart and soul out of health care it doesn’t do anyone any good,” Sullivan said. “There’s a lot of hurt out there.”

Reporter Carol Reiter can be reached at (209) 385-2486 or