Ball in County’s Court on Health Care Bailout : Clinton says that feds will expedite L.A. plan

The news from Washington was good for Los Angeles County, which may learn by week’s end that it has officially been granted $364 million in federal funds to bail out its beleaguered health-care system, fulfilling a promise made by President Clinton last summer.

The Clinton administration, recognizing the importance of the county’s proposed five-year plan to revamp the nation’s second-largest public health care system, has also appointed a White House liaison to coordinate negotiations between federal and county authorities on the long-term details of the blueprint within 45 days.

When a group of county supervisors and health officials set off for Washington last weekend, their reorganization plan appeared in jeopardy. Federal health care bureaucrats were grumbling about delays and the content of the plan. They also conveyed a lack of confidence in the ability of county officials to carry through the reorganization.

A waiver of Medicaid rules and the $364 million are key parts of the five-year demonstration project designed to use Los Angeles County as a national prototype for the modernization of urban health care systems to provide accessible, cost-effective, preventive care--all goals of Clinton’s vision for national health care.

Reassurances on the money and the appointment of a White House coordinator to help with negotiations between federal and county authorities came after county officials met for more than an hour with White House Chief of Staff Leon Panetta. Supervisors and health officials went to Washington to press for a county waiver on the federal Medicaid rules. Only with the waiver could funds be made available to reconfigure the way public health care is delivered here. The current hospital-based system is too expensive and inefficient; the goal is to shift to more cost-efficient outpatient clinics, but rules for federal reimbursements like Medicaid favor in-hospital stays. So to make this historic change, the county needs a five-year exception to the rules--the waiver.

Once the plan is formally approved, there will be a 30-day period for public comment before the county receives the money, which would carry the program through June 30, the end of this fiscal year. But the county’s health service system is facing a potential deficit of $150 million next fiscal year and desperately needs a green light on its reorganization plan for the next four years.

Now the onus falls on Mark Finucane, the head of county health services. After the White House talks, it was agreed that the county would submit a revised financing plan and federal officials would act within 45 days. The plan must be “budget neutral” over five years, a complex challenge for Finucane and his health care system that primarily serves 2.6 million uninsured poor.

The Clinton administration has done its best to accommodate the special circumstances of Los Angeles County. Now the county must deliver.