LOS ANGELES COUNTY: Health Dept. ‘Vastly Overestimated’ Savings
Los Angeles County's health director admitted yesterday that his department "has fallen as much as $212 million short of its savings goal after he grossly underestimated the money that could be saved through restructuring." The health department was partly responsible for the county's near bankruptcy in 1995, "saved only by a $600 million federal bailout." Though consultants have been paid $15.6 million to fix the problems, Health Director Mark Finucane announced that he "vastly overestimated" savings from the restructuring, now estimating the department will save only $82 million to $142 million by 2000, instead of the $294 million initially projected. "There's no question that the benchmarks were not adequate," he told the county Board of Supervisors. "There's also no question that the complexities of reorganizing a health care system over a three-year period is not an easy task." (AP/San Francisco Chronicle, 12/9). County supervisors "responded with anger and disbelief," the Los Angeles Times reports. "'We brought you in' to restructure the department," Supervisor Mark Antonovich told Finucane, "We told you bring in the people you need to make sure we're no longer in the red. ... Now we come to judgement day and it's like more of the same."
What's In Store?
Supervisor Yvonne Brathwaite Burke "said she has heard complaints that basic services are being cut and hospital maintenance is suffering while administrators are spared." The department expects continued losses of $148 million next year and $257 million the following year -- "assuming that the federal waiver is extended" past 2000. And Supervisor Gloria Molina "said she may have difficulty arguing for the extension with the same fervor as she lobbied for the 1995 bailout." Supervisor Zev Yaroslavsky added that Finucane should not automatically expect to use the approximately $120 million per year that will be coming in to the county from the national tobacco settlement. Finucane, however, noted that even if the restructuring ultimately works, the department will remain in a precarious financial predicament "until the federal government changes the way it reimburses California and the state's counties for treating indigent families." He said, "If they (do) not, there will not only be a waiver two. There will be a waiver three, a waiver four, a waiver five, a waiver six" (Riccardi, 12/9).