Los Angeles Times Examines Debate Over Third Federal Bailout for Los Angeles County Health System

The Los Angeles Times today examines the debate over a potential third federal bailout for the Los Angeles County health system (Riccardi, Los Angeles Times, 10/28). The system faces an estimated $750 million budget deficit by 2005, and county officials plan to decide tomorrow whether to 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, 10/10). The county Board of Supervisors has asked federal health officials for additional funds, but they cannot "count on a third federal rescue" for the county's health system, the Times reports. Some federal health officials said that the county has not met promises made in 1995 to reform the system. "The L.A. County hospital system was supposed to be reforming and becoming more efficient, and it basically hasn't," CMS Administrator Tom Scully said. The county had promised to reduce the size of hospitals, increase access to less-expensive outpatient services and "streamline" the county Department of Health Services; the Times reports that the county "fell short, in varying degrees, on all three" promises. Supervisors said that they have "made real, if incomplete, progress" on the promises. They pointed out that the county has expanded outpatient services and controlled health care expenditures but said that other reforms "are tougher to implement" because of opposition from special interest groups. Other experts said that "even if the health system were run perfectly, it would face periodic crises because it has been chronically underfunded" and because of the county's large uninsured population, the Times reports (Los Angeles Times, 10/28).

Meanwhile, Assembly member Keith Richman (R-Granada Hills) plans to ask Gov. Gray Davis (D) to call a special session of the Legislature to address the Los Angeles County health care budget crisis, the Los Angeles Daily News reports. In a letter to Davis, Richman wrote, "As you know ... Los Angeles County's health care network faces a severe crisis. Left unresolved, the county's financial plight not only threatens the health of millions of low-income residents who depend on it for care, (but) it also puts a heavy strain on Southern California's private health care system." Byron Tucker, a Davis spokesperson, said that the governor "was open to calling a special session in January." Tucker added that Davis has asked Supervisors Zev Yaroslavsky and Gloria Molina to work with his staff to develop a proposal to address the issue by Nov. 15 (Anderson, Los Angeles Daily News, 10/27).