County Health System to Get More U.S. Aid

The Clinton administration announced Friday that it will provide an additional $172 million in federal funds to help Los Angeles County’s ailing public health system, bringing the total presidential largess to well over half a billion dollars.

The new money from the federal Health Care Financing Administration comes after the three Democrats on the county Board of Supervisors mounted a full-court lobbying blitz on the Clinton White House to come to the aid of the nation’s most populous county.

Health and Human Services Secretary Donna Shalala said in a statement released in Washington that the “administration remains committed to working with state and county officials to stabilize and restructure the Los Angeles County health care delivery system.”

The promise of more money is in addition to a $364-million bailout of the nation’s second-largest public health care system, which was announced by the president in Santa Monica last September when the vast network of hospitals, health centers and clinics was on the verge of collapse.

The bailout, which was finalized in April, averted the threatened closure of the nation’s busiest public hospital, County-USC Medical Center, and a number of other health facilities during the county’s worst fiscal crisis. Last summer, the county faced a massive $1.2-billion budget deficit, more than half of it in the health system alone.

County Health Services Director Mark Finucane said much of the initial bailout has been spent to stabilize what was a financially crippled health system. “If this money had not shown up, it would have been catastrophic for this community,” he said. “The system was near death.”

To obtain the initial bailout, the county sought and won a five-year waiver of federal Medicaid regulations in order to dramatically shift its $2.3-billion-a-year health system from an emphasis on costly hospital treatment to less expensive primary and preventive care at community clinics.

But in the nine months since Clinton hailed the promise of restructuring the county’s health system as a model for the nation, the county has taken few preliminary steps to actually transform its vast health system.

“We’re just coming out of the hole,” Finucane said, “but at least we’re crawling in the right direction.”

Because of the fiscal crisis, more than 2,500 health workers, including doctors and nurses, were laid off in October. An array of outpatient services were cut, particularly at specialty clinics connected to county hospitals.

Since then, six of the county’s 39 community clinics have been turned over to private operators. It remains to be seen whether the supervisors will follow through with the promised privatization of 22 additional clinics and two of its six hospitals: Rancho Los Amigos Medical Center in Downey and High Desert Hospital in Lancaster.

The supervisors have delayed a reduction in funding for Rancho Los Amigos for three months that would eliminate 800 health jobs and slow the process of entering into partnerships with private operators of 22 more clinics.

“We entered into a bargain with the Clinton administration. If they helped us, we would help ourselves,” Supervisor Zev Yaroslavsky said. “The Clinton administration has made good on its commitment to Los Angeles County. It is up to us to make good on ours.”

Clinton’s help for the health care system is the latest in a series of recent actions to provide well over $1 billion in financial assistance to a vote-rich region critical to his reelection chances.

“This will help hasten the county’s progress toward instituting a health care system focused on preventive medicine,” Supervisor Yvonne Brathwaite Burke said. “Treating health problems in the indigent before they become emergencies should help to assure lower health costs for the county.”

In theory, the federal government will eventually recoup its money through lowered health care costs in the future.

Yaroslavsky, Burke and Supervisor Gloria Molina have made repeated visits to the White House since last summer to plead for federal help.

With the additional federal money, board Chairman Mike Antonovich said the county has secured enough financing for ongoing health services in the new fiscal year that begins July 1, eliminating a projected deficit in the health budget.

To obtain the Medicaid waiver, which increases federal reimbursement for outpatient care, the county promised the federal government that it will slash the number of hospital beds by at least one-third, from 2,595 last year to no more than 1,719 by the turn of the century.

The county committed to a 50% increase in outpatient care to the poor and those lacking health insurance by the end of the five years. More than 4.4 million people countywide are on Medi-Cal, California’s version of Medicaid, or lack medical insurance--the highest proportion of any major urban area in the country.

John Monahan, a top aide to Shalala, said much of the $536 million will be spent to place the county’s health system on a solid financial footing and then to shift the system toward outpatient care.

Monahan said restructuring is underway, but “more work needs to be done in developing detailed plans and implementing them.”

Finucane, who took over as director of the county health system in February, pledged to move ahead with privatizing additional health clinics and restoring more than 400,000 outpatient visits a year that were eliminated because of last fall’s budget cuts. He will shortly announce a major shake-up of the Department of Health Services executive staff and plans to present the supervisors with scaled-down plans for replacing earthquake damaged County-USC Medical Center.