Supervisors Grapple With Grim Fiscal Reality : Budget: Officials struggle to decide which part of health care system to sacrifice. ‘The best-case scenario is miserable and the worst-case scenario is disastrous,’ one says.

Faced with the grim reality that Los Angeles County can no longer afford the vast system that provides health care for millions of poor and uninsured residents, county supervisors spent Thursday thinking the unthinkable.

In back-room discussions and private phone calls far from public view, they wrestled with the tough choices over what pieces will be lost: County-USC Medical Center, other county hospitals, health centers and clinics, or some combination of all these.

It is a painful process for the leaders of the nation’s biggest county as the reality sank in that neither Washington nor Sacramento would save them from having to make the politically dangerous decision--perhaps as early as today--about what to close and what to keep open.

“The best-case scenario is miserable and the worst-case scenario is disastrous,” said Supervisor Zev Yaroslavsky. “The best-case scenario is you close clinics, reduce hospital staffing, reduce preventive care and cut public health programs. The worst case is you close a hospital and the clinics and reduce preventive care and cut public health.”

With no sign of hard money that can be taken to the bank and the county still spending at a level it cannot sustain, the supervisors must decide what to cut and what to save. No matter what the outcome, the safety net for those who have no place to turn will never be the same.

“We’re talking about a system here,” said a top health official who asked not to be identified. “It is like deciding whether to take an engine out of a car or all the tires. Either way you don’t have a car.”

The enormity of the county’s $655-million deficit in health services--more than half of the gaping hole in the county budget--has become inescapable this summer.

The county’s chief administrative officer, Sally Reed, became a lighting rod for criticism more than a month ago when she recommended closing County-USC, the nation’s largest public hospital. The Eastside edifice is also the oldest of six county hospitals and the most in need of rebuilding.

The proposal triggered a lobbying frenzy as supervisors stormed the state and nation’s capitals in a desperate search for money to keep the county’s health care system from unraveling.

It was unimaginable that County-USC, a towering monument of benevolent government born in the depths of the Depression, would shut its doors and deny medical care to those who cannot afford it.

So the supervisors hastily convened a health crisis task force to find alternatives. After a month of intense study of the county’s vast and complex health system, the task force concluded that there is not enough money available to maintain the status quo.

In a sharply worded report that underscored the urgency of the problem, they offered an alternative to the unimaginable.

It would spare County-USC and the five other county hospitals--at least temporarily--by closing most of this sprawling county’s network of health centers and clinics within 30 to 60 days unless more money could be found.

The task force wants the federal and state governments to approve virtually overnight a demonstration project that would shift the emphasis in the county’s health care system from far more expensive inpatient treatment in hospitals to less costly care in health centers and clinics.

But that is a gamble that assumes that the state and federal governments will ride to the county’s rescue.

Supervisor Yvonne Brathwaite Burke said Thursday that she and the other supervisors had discussed this many times in recent weeks. “And no one has really come to grips with how do you approach it if you do not get these funds,” she said.

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Burke said the supervisors were told Thursday not to expect to hear from Gov. Pete Wilson’s office until Monday--even though they need to pass a budget before layoff notices sent to thousands of employees in recent weeks take effect Aug. 1.

“So we are just really living minute by minute,” she said. “We are waiting for something to break.”

Other concerns, Burke said, include how to keep a hospital running during the two or more months it takes to shut it down and transfer patients somewhere else, and whether the board could even shut down such a large and important facility.

As soon as the supervisors act to close a hospital, county officials fear they will be sued--by unions representing county workers who would lose their jobs, by advocates for the poor, or even the University of Southern California, which uses County-USC to train hundreds of medical school interns a year.

“We will get sued,” Burke said. “What do you do? I don’t know. There are no good alternatives.”

With no easy answers, some county officials suggested that the supervisors will do what they have done in past years, which is to assume they will get federal money and use those uncertain “soft revenues” as the equivalent to hard cash.

Such a move could give the supervisors as much as several weeks of breathing room to find alternatives, but Yaroslavsky said he would not accept papering over the problem.

“I know the county does not have enough cash to maintain the status quo,” Yaroslavsky said. Whatever the final decision, “it needs to be financially sound,” he said. “It can’t be based on funny money and phony assumptions.”

Supervisor Mike Antonovich said he expected that the board would accept the basic approach recommended by the task force with some modifications to address the concerns of supervisors.

Antonovich wants to save in-patient services at High Desert Hospital until a partnership to care for those patients can be established between the county and a private hospital in the area.

Supervisor Deane Dana, who could not be reached for comment Thursday, has expressed concern about the task force proposal to privatize Rancho Los Amigos Medical Center in Downey within two years.

Board Chairwoman Gloria Molina, who also was unavailable, has been adamant about protecting County-USC from closure.

In the end, Antonovich said, the county health care system will be different. “There will be a downsizing of County-USC Medical Center and additional services will be provided by the private sector,” he said.

For some supervisors, more is at stake than the nuts and bolts of the health system. There are political consequences, as Orange County supervisors are learning after their handling of fiscal matters leading up to that county’s bankruptcy.

Two supervisors, Burke and Antonovich, face voters next spring. A third, Dana, is retiring, and his longtime chief deputy, Don Knabe, is running for the seat against at least two opponents.

And as one county official said Thursday, for those who depend on county government for medical care, “Everything is at stake.”