Los Angeles County To Receive $150 Million in Additional Federal Funds To Address Health Department Deficit
The Los Angeles County Department of Health Services will receive an additional $150 million in federal funds over the next two years under an agreement reached yesterday, "effectively ending the health department's immediate funding crisis," the Los Angeles Times reports (Ornstein, Los Angeles Times, 2/5). The county health system faces an estimated $750 million budget deficit by 2005. The county received a $1.2 billion federal bailout in 1995 and an extension of the funds in 2000, but the bailout funds expire in 2005 (California Healthline, 10/24/02). According to Dr. Thomas Garthwaite, director of the health department, the new federal funds -- combined with the approval of a ballot measure last November that will raise property taxes to fund the county's trauma care centers and emergency rooms, the decision last year to close of 16 health centers and the planned closure of two public hospitals -- will allow the health department to avoid additional reductions for at least two years. The new federal funds will allow Olive View-UCLA Medical Center, Harbor-UCLA Medical Center, the county's network of private health clinics that treat uninsured patients and the Edward R. Roybal Comprehensive Health Center to remain open. However, the planned closure of High Desert Hospital and Rancho Los Amigos National Rehabilitation Center will proceed, the Times reports. A legal settlement over reimbursement rates for outpatient care at public hospitals will account for one-third of the new federal funds; the renewal of Medi-Cal waiver that provides additional funds to state hospitals that care for a large percentage of low-income patients, will account for two-thirds of the funds, the Times reports.
The $150 million agreement "falls far short" of the $1.4 billion that the county requested from the federal government last year, but Bush administration officials said a third large bailout "was too much to ask," the Times reports. Garthwaite said, "In and of itself, this doesn't get us completely fixed. It doesn't make us stable, but it significantly helps." A CMS spokesperson said that the agency will announce details of the agreement as early as later this week, when HHS Secretary Tommy Thompson plans to visit Los Angeles (Los Angeles Times, 2/5).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.