Critical Talks on L.A. County Crisis Grind On

Health officials from nearly every level of government spent Wednesday holed up in a fourth-floor office in desperate search of a solution to Los Angeles County’s worst fiscal emergency ever. Negotiations continued into the night with no assurance that federal money would be available to save the county health system from imminent collapse.

While the crucial talks ground on, the chairwoman of the Los Angeles County Board of Supervisors abruptly canceled today’s special meeting on the county’s fiscal crisis that threatens to force closure of one or more hospitals and almost three dozen health centers and clinics.

“The board is not ready to act on the issues before them. They are still gathering information,” said a statement issued late Wednesday by the board’s executive office.

The postponement until Friday capped another frenzied day in which four of the five supervisors engaged in an unusual closed-door debate with Democratic legislators from the Los Angeles area about how best to aid the county.

Moving into and out of a conference room high atop the Ronald Reagan State Building in Downtown Los Angeles in tag teams of two--to avoid the requirements of the state’s open meeting law--the supervisors and lawmakers agreed only to keep talking as the health care collapse moves closer to an Oct. 1 day of reckoning.

Adding to the atmosphere of tense anticipation was today’s visit to Los Angeles by President Clinton, although Supervisor Zev Yaroslavsky said late Wednesday that he believes it is unlikely the President will announce any such aid for the county today.

White House officials said Wednesday the Clinton Administration is looking at the county’s plight but was not ready to make any promises.

“The Administration has been working closely with L.A. County and the state of California to find an appropriate way of easing Los Angeles’ very serious health care funding problem,” said White House Chief of Staff Leon E. Panetta. “We want to be part of the solution, and we will continue to meet with state and county officials.”

Clinton--in Los Angeles as part of a two-day political swing through California--must win the state if he is to hold on to the White House in 1996, and the incentive is high to rescue the massive county from fiscal peril. Clinton also needs the active support of organized labor. And members of the powerful Service Employees International Union--the fastest-growing union in the nation and the largest in California--are taking the brunt of nearly 5,200 impending layoffs and demotions in the county’s health system.

But the details of any bailout, no matter how politically popular, must be hammered out at the bureaucratic level rife with complex technicalities. And federal number-crunchers are wary of setting an expensive precedent that could have every cash-strapped metropolis in the nation racing to Washington hat in hand.

So with the stakes high and the clock running, about 25 health officials from the county, state and U.S. Department of Health and Human Services took their places at 8 a.m. Wednesday around a square table in the Hubert H. Humphrey Federal Building on Capitol Hill and did not break for seven hours. They ordered in sandwiches for lunch, broke into tiny work groups and nearly forgot about dinner in a race to prevent even deeper health cuts than those already in store for the nation’s largest county.

Burt Margolin, the county’s health czar, described “intense” negotiations that could be the last resort for a county desperately in need of $178 million to keep open its six public hospitals.

“The issue of how health care is funded is incredibly complex and working under these time constraints is very difficult, but everyone involved understands the consequences,” said Margolin, whispering into a telephone during a rare break at dusk. “All I can say is the discussion is intense and focused . . . and we are not finished yet.”

Without the money, county supervisors could be forced to start closing hospitals, including possibly County-USC Medical Center, the nation’s largest public hospital. That option could pose dire consequences for a county where one in three residents under 65 lacks medical insurance.

Clearly, though, the political climate may be in Los Angeles County’s favor.

“They are trying to work out the how and it is not easy. Whatever they do for L.A. County could be a precedent for other areas of the country,” said Rep. Henry A. Waxman (D-Los Angeles), who has helped smooth negotiations between Los Angeles and Washington. “And they are trying to do something in a short period of time that usually takes months to get all the necessary approvals and sign-offs.”

Talks were expected to resume today with the status of the brokering so delicate that participants paused to think before divulging what they had for lunch Wednesday.

“All I can say is we have gone all day and . . . everyone is trying to come to this in a thoughtful way to try to find some solution for the county,” said John T. Monahan, director of intergovernmental affairs for Health and Human Services.

Outside the negotiating room, federal officials at the highest levels seem to favor a bailout in theory, but a thicket of bureaucracy stands in the way.

“They want this to work out. The L.A. County health care system is bigger than most states’ and if it goes under, it will be a disaster,” Waxman said. “But they have to do it in a way that’s consistent with the law. The federal government can’t just give the money to the county.”

The county’s deep budget deficit could force the closure Oct. 1 of all six of its comprehensive health clinics and 28 of 39 neighborhood clinics. In addition, 5,200 layoff notices have gone out to health workers.

The mission now is to save the hospitals.

Margolin, a former assemblyman who has worked on Capitol Hill and is considered well-connected in Washington health circles, is desperately seeking a waiver of federal regulations in the way Medicaid funds are distributed. The waiver could yield more money by allowing the county to shift its emphasis from treating patients in hospitals to less expensive care in clinics and health centers.

Similar negotiations with federal officials in Los Angeles last week produced disappointingly little. Margolin’s goal now is to leave Washington with one of two things: a commitment for the money or an assurance that it will never come, an ending with consequences that could be catastrophic for the county’s health care network.

“I have a very clear understanding of the consequences of failure and all of us appreciate the magnitude of the disaster and the people who will be hurt,” Margolin said Tuesday upon arriving in Washington to spend a day preparing for the talks. “We are determined not to let this fail.”

In Los Angeles, county officials switched gears and said they now plan to seek help from a little-known state commission that could save the county $70 million by allowing it to reduce general relief benefits to the poor.

The move came after county officials sharply criticized state legislators for failing to pass such relief in the final hours of the legislative session last week.

In response, angry lawmakers have pointed out that the county could have been seeking such assistance on its own from the Commission on State Mandates.

Assemblyman Richard Katz (D-Sylmar) said the county should have gone after the aid sooner. “In June, 1994, they could have gone to the commission,” Katz said. “If Lassen County can figure it out, Alameda and Sacramento can figure it out, Los Angeles County can figure it out.”

Sacramento County, which applied in February, won approval to lower its general assistance welfare payments from $286 a month to $221, saving $7.4 million a year, said commission Executive Director Kirk Stewart. Alameda County has been allowed to drop its monthly payments from $300 to $221, saving $10.8 million, and tiny Lassen County dropped its payments from $286 to $220 a month, saving $91,080, Stewart said.

The commission was established several years ago to help counties get relief from state policies that took revenues away from them yet still required them to provide certain mandated levels of health, welfare and law enforcement service.

Under a state law that went into effect last year, counties that can show such “significant financial distress that the county cannot maintain its basic county services, including public safety” are eligible to save money by lowering the level of monthly general assistance welfare payments they pay to the indigent.

“This process certainly has been available to [Los Angeles County],” Stewart said. “We have had three counties come into this process and all three have been successful. It appears that L.A.’s approach [going to the Legislature] wasn’t.

“The ability to apply for this is sitting right out there,” Stewart said. “It is an open statutory invitation for them to come to us.”

Supervisor Mike Antonovich said Los Angeles County did not apply to the commission because the county needed retroactive relief from a recent state Supreme Court ruling. The state’s highest court in July rejected the county’s appeal of a lower court decision that overturned the county’s previous attempt to cut general relief benefits. Only the Legislature, Antonovich said, could have provided such retroactive relief.

On Wednesday, the county’s assistant chief administrative officer, Sandra Davis, said the county would submit an application for so-called mandate relief by mid-October.

Because approval can take several months, Davis said the money could not be counted on to immediately help the county avert deeper cuts in health services, including potentially closing one or more hospitals.

Davis said the county’s decision on whether to submit an application was delayed by several factors, including efforts to secure the same mandate relief legislatively. Also, Davis said, the county needed to wait until the supervisors adopted a new budget, which did not occur until Aug. 1, and because the county was assembling the detailed financial information required by the commission.

“We have not been sitting here on our hands,” Davis said. “The application is a very detailed process. We pursued legislative solutions as well as beginning to gather information” for the commission application.

Fiore reported from Washington and Rabin and Meyer from Los Angeles.