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Recalling Davis Isn’t Necessary, Medi-Cal Reform Is

The strident advocates of recalling Gov. Gray Davis totally blame the governor’s inadequacies for the state’s giant budget deficit. But this is far, far from the truth of things.

Just take one huge deficit-driving item in the state budget: health care, and more specifically, Medi-Cal.

According to a budget analysis, fully 20 percent of the state’s total budget is spent on Medi-Cal (known as Medicaid nationally). And the governor has very little to say about this expenditure. Not only is this one of California’s top budget concerns, but it is a very grave issue in most of the other states as well.

A recent news story in the New York Times said, “Nothing concerns state governors more these days than their state budgets and nothing is driving their deficits deeper, they say, than rising Medicaid costs.”

The Times story points out that but three states have balanced budgets. This has induced “all 50 governors [to agree] in a rare show of unity to support a provision of the [pending] House prescription drug bill that would shift as much as $7 billion in costs to the federal government.”

The Governors Association has determined that of all the items in a state budget, the cost of health care is growing at the fastest rate, as much as 8 percent a year.

What really disturbed the governors was the prediction that if the federal government does not absorb the Medicaid expenditures, in the next 10 years the states will be forced to spend an additional $100 billion. And it’s obvious that Gov. Gray Davis’ alleged inadequacies have very little or nothing to do with this spending outcome, except his support of the other 49 state governors in persuading Congress to absorb these deficit-producing Medicaid costs.

It is now being generally recognized that there is a great deal of fraud connected with this Medi-Cal program — in California and in the other states. It’s commonly understood that the U.S. health system is driven not by significant scientific medical breakthroughs, not by the compassionate caring of sympathetic humans and responsive governments, but by the healing resources made available for a price. Plenty of money, all kinds of help. Less money, less help. No money, little help.

This money-effectiveness approach is underlined by the health industry’s drive to maximize returns no matter how unhealthy and even fraudulent that practice might be on governments and individuals. This philosophy has contributed greatly to the growing out-of-pocket health costs to individuals, to state budget woes and to the federal government’s deepening deficit. This situation, again, is not Gov. Gray Davis’ fault, but the health care industry’s mode of operation.

Illustrating that point (not in a deserved front-page story, but in a back section) was a Wall Street Journal report that “the federal government is on its way to collecting a record amount of fines and settlements from the health care industry this year.” A cited example illustrates very repellant behavior: “Bayer agreed to pay $257.2 million including civil damages and a criminal fine to settle allegations it cheated the Medicaid program out of discounts and rebates on two of its drugs.”

Another major drug company, AstraZeneca, was cited and “agreed to pay $355 million and pleaded guilty to a charge that it induced doctors to falsely bill government health programs for free samples of its prostate cancer drug.”

And so on, into the fraudulent billions. According to one calculation, “more than $50 billion is expected to be lost.”

Yes, Davis could be faulted for not vigorously and openly pressuring the federal government to uncover and pursue these fraudulent wrongdoers. But that should not be a basis for the governor’s recall.

Ted Ruhig is well-known in Sacramento for his tireless advocacy for proposals designed to help seniors live long, happy, full lives. He has held leadership roles in several advocacy groups and on government advisory boards. Ruhig once sued the California Department of Aging for age discrimination, and won!

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