L.A. County Postpones Plan to Cut 1,200 Jobs : Budget: Supervisors order further studies to close $600-million health department deficit. Proponents say layoffs will forestall deeper cuts.

The Los Angeles County Board of Supervisors on Thursday took steps to close a gaping deficit in the financially strapped Health Services Department but stopped short of eliminating 1,200 hospital jobs.

The board grappled for more than two hours with the question of how to cut costs in the department but--after heated debate and public testimony--was unwilling to proceed with layoffs without further study.

Instead, health department staff was ordered to provide the board with a detailed summary of departmental spending and to bring a plan for laying off hospital staff back for consideration next month.

“This is moving very fast for a lot of people and we have not laid the groundwork,” Supervisor Zev Yaroslavsky said in arguing for postponing the decision. “There is not a general sense in the county family of how desperate the problem is. We can’t come out of left field without preparing that ground.”

Chief Administrative Officer Sally Reed had urged the board to move forward with layoffs, arguing that because of decreases in some patient loads the department could absorb the cuts and that waiting would increase the likelihood of steeper cuts down the line.

“I think it sends the wrong message,” she told the board.

Supervisor Deane Dana agreed.

“We’ve pussyfooted around long enough on this,” he said. “Sally has told me and I am convinced that there will be no (budget) miracles this year. We have to send a message that we are in serious trouble.

The county has been casting about for weeks over how to close a $641-million budget gap that stems from a dispute with the federal government over Medi-Cal reimbursement claims. Nearly $600 million of the gap lies within the health department.

Last week, the board ordered other county departments to return with plans to reduce spending by 8%, again stopping short of ordering the cuts.

Although the board forestalled layoffs Thursday, it ordered the department to proceed with other cutbacks, including a continued hiring freeze and freezes in purchases of supplies and services.

Additionally, the department will proceed with a plan to reduce by 15% the number of interns and residents hired at teaching hospitals such as USC and the Charles R. Drew School of Medicine.

Faced with a grim budget outlook, the board also agreed Thursday to hire an outside consultant to determine whether the county can afford to continue the costly rebuilding of County-USC Medical Center.

The board has already approved spending more than $2 billion for various renovation and rebuilding projects, including $1.2 billion for County-USC, which was heavily damaged during last year’s Northridge earthquake.

But questions have been raised over the desirability of financing plans proposed for the projects by the health services department. Yaroslavsky proposed that the county spend up to $500,000 for a re-evaluation of the size and scope of the project.

Nevertheless, Yaroslavsky agreed with his colleagues to borrow $12.9 million from the county’s treasury pool to continue construction and design work for several projects.