When President Clinton pulled Los Angeles County's health services away from the brink, the $364 million in federal aid he delivered was intended to stabilize--not fully restore--the failing system. This is an all-important distinction, one that the Board of Supervisors, judging from its action last week, understands. The board made some tough choices.
The one-time federal infusion only bought time for the county to avoid a massive shutdown of public hospitals and clinics, a closure that was scheduled for Oct. 1. It was inadequate to preserve all health services and jobs, and it was never intended to do so. Indeed, in granting the help Washington in large part was seeking to nudge Los Angeles County into changing its costly hospital-based system, which is $655 million in the red, to a less expensive outpatient model.
UP TO THE CHALLENGE?: When the supervisors postponed layoffs until mid-October, there was concern, even fear, that they would not rise to the challenge of overhauling the system. But last Thursday the board approved a health care restructuring plan by Burt Margolin, the county health czar. As a result, the county's hospitals, six comprehensive health centers and all of its community clinics will remain open. (Many clinics eventually will be turned over to private medical providers.) However, county health programs remain subject to $285.4 million in cuts, and that will mean the loss of as many as 2,800 jobs.
The restructuring plan marks the critical first step in a five-year process that involves federal, state and county officials in a historic arrangement to solve L.A. County's health financing problems. The county--until recently shunned by Sacramento and ignored by Washington--had tried to solve the problems alone but that was impossible. The troubles are multifold and are likely to increase. There is a projected $192-million shortfall in the health care budget next year. Congressional action on Medicaid also could affect the health budget. Amid these unsettled conditions, L.A. County must build an outpatient clinic system to replace its crumbling hospital setup and maintain the goodwill of federal and state health officials.
There are other budgetary pressures as well. The board rejected Chief Administrative Officer Sally Reed's recommendation of $47.7 million in spending cuts for all other departments, including sheriff, district attorney, probation and courts. To avoid the cuts, the board went on record in favor of a 5% across-the-board pay cut for all county employees, a move strongly opposed by union and non-union workers. The pay reduction is optional in the individual cases of many department heads, as well as for the supervisors themselves. Do we hear the supervisors offering to take the cuts? Are the cuts part of a larger, coherent plan to bring spending in line with revenues? They look suspiciously like stopgaps.
CLEAR CONCEPT NEEDED: As with its health care restructuring plan, the board needs a methodical approach to cut spending in each department. Some departments may have to downsize more than others, depending on needs of the county, but cutting piecemeal, here and there, will not resolve the fiscal problems.
The board turned to an outsider, Margolin, to come up with a plan intended to salvage the county health system, but the responsibility for the rest of the budget lies squarely with the supervisors. As of now, the board seems to be narrowly interpreting its fiscal role as deciding whether to cut or not to cut and whether to borrow or not to borrow. This does little to deal with the big, long-term challenge of getting the county's house in order. Indeed, as long as the board ducks this issue, its credibility will suffer.
The board must prioritize county needs and make more tough choices. That is inescapable.