This report is submitted in conjunction with our Analysis of the 1987-88 Budget Bill. The report is intended to provide the Legislature with background information needed to place in perspective the Governor's proposal to reduce Medi-Cal costs by $250 million ($125 million General Fund) through an as-yet-unspecified "program restructuring." The first chapter of the report provides an overview of the Medi-Cal budget proposal for 1987-88. The second chapter provides data intended to put Medi-Cal costs and trends into perspective. The third chapter identifies major options for reducing Medi-Cal costs.