Federal Health Officials Propose $150 Million Bailout for Los Angeles County Health System
Federal health officials have proposed a $150 million bailout to help the "ailing" Los Angeles County health system, but county officials said that the amount "falls far short" of the $1.4 billion required to "avert massive cuts," the Los Angeles Times reports (Ornstein/Richardson, Los Angeles Times, 11/2). The county health system faces an estimated $750 million budget deficit by 2005, and county officials may close Harbor-UCLA and Olive View-UCLA medical centers, as well as dozens of public health clinics, to balance the budget. The county received a $1.2 billion federal bailout in 1995 and an extension of the funds in 2000, but the bailout funds will expire in 2005 (California Healthline, 10/29). Under the proposal from the federal government, the county would receive $50 million from a "long-delayed" settlement with private hospitals over reimbursement rates and $100 million from a program that provides additional funds to hospitals that treat a large number of low-income and uninsured patients. According to a Nov. 1 memo from the county health department to county supervisors, the proposed $150 million would not prevent the closure of the two UCLA medical centers. Federal health officials said that they had reached no official agreement with the county and that "negotiations are not over," the Times reports. CMS Administrator Tom Scully plans to visit Los Angeles County on Wednesday to tour public hospitals and meet with county supervisors. However, some supervisors have said that Scully "might as well stay home" without an increase in the $150 million proposal, the Times reports. "We are not interested in one-time money. It's not a solution to our problem -- it basically delays the inevitable. If anybody believes a one-time check is going to solve our problems, he is sadly mistaken," Supervisor Zev Yaroslavsky said. However, Supervisor Don Knabe said that the county requires additional "dollars to save lives, and we should take them as we can get them" (Los Angeles Times, 11/2).
In related news, the Los Angeles Times on Saturday examined the potential closure of the Downey, Calif.-based Rancho Los Amigos National Rehabilitation Center, which offers an "uncommon constellation" of specialized services from spinal cord to neurological care (Richardson, Los Angeles Times, 11/3). Last week, the Los Angeles County Board of Supervisors voted 4-1 to close Rancho Los Amigos in June to help cover the county health department's budget deficit, estimated to reach $750 million by 2005. Supervisors anticipate the closure will save the county $58.6 million next year and $65 million to $70 million in future years. Supervisors are expected to finalize the facility's closure with a vote in January. The rehab center, which has 207 beds and 1,400 employees, provides "highly specialized" rehabilitation services to 2,600 inpatients and 8,700 outpatients last year (California Healthline, 10/30). Rancho Los Amigos serves an "influx of patients with nowhere else to turn," a situation that has allowed the facility to "develop unusual areas of expertise," the Times reports. Medical advances "now taken for granted," such as patient identification wrist tags and "halo" neck braces were developed at the center, the Times reports. About 33% of Rancho's patients are indigent, and the county estimates it would have to pay $15 million to $30 million per year to cover treatment for such patients. Fernando Torres-Gil, director of the UCLA Center for Policy Research on Aging, said, "This is a sad chapter -- all those who benefited from Rancho will have to either do without or seek care elsewhere" (Los Angeles Times, 11/3).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.