Federal Bailout for Los Angeles County Health Department Not Likely, Scully Says

CMS Administrator Tom Scully said yesterday in a Los Angeles Times interview that the federal government will not provide Los Angeles County with a $350 million bailout requested by county supervisors to avoid the closure of several area hospitals and clinics (Riccardi/Ornstein, Los Angeles Times, 10/2). Scully made similar comments last week in a Copley/Torrance Daily Breeze interview (California Healthline, 9/30). The Los Angeles County health system faces an estimated $750 million deficit by 2005, and county officials have set an Oct. 29 deadline to decide whether to close "dozens" of public health clinics, as well as Harbor-UCLA and Olive View-UCLA medical centers, to balance the budget (Los Angeles Times, 10/2). The county received a $1.2 billion federal bailout in 1995 and an extension in 2000 that expires in 2005 (California Healthline, 8/12). County and state officials plan to meet with Bush administration officials next week about a third federal bailout. However, Scully said the county's request is "dead on arrival." He added, "We don't want to create a meltdown of the L.A. County hospitals, but I have to explain to Houston and New York and St. Louis and Nashville why L.A. County is getting a special deal. I don't think it's our responsibility to just write them a check and bail them out." He said that Los Angeles County is the only locality nationwide that has a "direct agreement for additional funds" from CMS, the Times reports. Scully said that the Bush administration would help the county and proposed alternate sources of funds, such as the disproportionate share hospital program, which provides additional funds to private hospitals that provide care to indigent patients.

In addition, Scully said that the state "has flexibility" to assist the county. However, California officials estimate a state budget deficit of at least $10 billion next year, and they will not likely provide the county with additional funds, the Times reports. The state contributed $300 million in 2000 as part of the county's most recent federal bailout. According to Grantland Johnson, secretary of the Health and Human Services Agency, Scully's position endangers the "viability of the California health care system." County supervisors on Oct. 1 requested that Davis call a special session of the Legislature to address health care issues and asked the governor to declare the county "medically underserved," a move that some supervisors said would "free up" additional funds (Los Angeles Times, 10/2).