Reformers Urge County to Create Panel to Govern Health System : Government: A commission would eliminate politics and establish professional oversight, backers say. But opposition may come from elected officials or employees’ union.

Two months after a federal bailout kept Los Angeles County’s public health system from imploding, an influential coalition of reformers is urging county supervisors to create a special commission to take over and run the $2.3-billion-a-year network of hospitals and clinics.

The five elected supervisors now are the ultimate bosses of the troubled county health department. But advocates say an appointed health authority would insulate the department from political meddling and micro-management that critics say contributed to severe budget problems that nearly capsized the nation’s second-largest public health system this fall.

Only two California counties, San Francisco and San Luis Obispo, have health commissions. Backers, however, say a new governing structure is needed to help keep Los Angeles County’s health system afloat, and the concept of a health authority has broad support among private health care professionals.

“I think it’s critical,” said Beth Osthimer, a senior attorney for a San Fernando Valley legal-aid group that advocates better health care for the poor.

“I don’t see how we can reorient the system under the structure we currently have,” she said, referring to a federal mandate that the county shift its emphasis from hospitalizing patients to treating them in clinic settings to save money.

Proponents argue that a commission made up of private doctors, communicable-disease experts and seasoned health care administrators would devote more time to the issues, make wiser decisions and take politics out of the county’s medical safety net for the poor.

“You would not run NASA without involving the engineers. You can’t run the Army without involving military people,” said Dr. Brian Johnston, president-elect of the Los Angeles County Medical Assn., which strongly supports formation of a health authority. “I think that logic really applies to the Department of Health Services.”

Supervisors in August directed county health czar Burt Margolin to study health authorities in other cities and counties, and he is expected to make a recommendation soon on whether such a body should be created in Los Angeles County.

In an interview, Margolin declined to disclose if he plans to propose a health authority and, if so, how much power it should wield.

But he noted that the health crisis task force he chaired last summer urged formation of an authority, adding that he remains sympathetic to the concept.

Some backers, however, worry that such a proposal will run into strong resistance from the supervisors or the powerful union that represents county health workers. Numerous union jobs could be eliminated if health commissioners largely immune to political concerns decided it was necessary to downsize county hospitals or clinics, as many commission supporters hope they will.

Proponents say they want a strong, independent commission with extensive control over the day-to-day running of the county health department.

Backers contend that establishing a commission would improve management of the county health network by turning over responsibility for complicated, often highly technical decisions to people who are much more knowledgeable about such questions than the supervisors. They add that supervisors shouldn’t have to spend their time on trifling matters like a hospital lawn mowing contract, as they did recently.

Advocates say a commission would buffer county health bureaucrats against the whims and demands of supervisors, who often view county hospitals and clinics as extensions of their political fiefdoms.

“The board treats hospitals and the health system the way I used to treat parks when I was a city councilman: ‘You get a park in your district, I get a park in my district,’ ” said Supervisor Zev Yaroslavsky, who supports the idea of an authority.

While most county health departments in the U.S. are run by elected officials, a number of autonomous and semiautonomous health commissions have sprung up. And health experts say interest in such governing structures is growing as county health systems are squeezed between declining federal and state health care expenditures and intense competition by private hospitals for patients with government health insurance.

San Francisco has a particularly strong health commission. It was created in 1985 by voters alarmed at the prospect that San Francisco General Hospital--a leader in caring for people with the AIDS virus--might lose its accreditation.

San Francisco’s commission has broad power to “manage and control” the health department, county hospitals and emergency medical services. Its seven members may not be removed except for official misconduct. Until voters recently passed a new charter amendment, the commission also had power to hire the director of the health department.

The commission’s members include a doctor, dentist, psychologist and a man infected with the AIDS virus, and observers say the commission has improved health care decision making.

“They’re seen as a quality group, reflective of the community, and their decisions in many instances gave support to what the health department was trying to do,” said Dr. David Werdegar, who served as San Francisco’s health director from 1985 to 1991 and now is the state’s health facilities planning chief.

Many of those who support the idea of a Los Angeles County health authority say they want a similar commission, but are unsure how much power county supervisors are willing to give it.

For instance, the county medical association, which represents mostly private doctors, believes a commission should be able to directly supervise the health department, hire its director and prepare a recommended budget each year. Supervisors would still have the final say on the budget.

Some advocates say the health authority will lack effectiveness without the ability to raise its own tax revenues. As federal and state governments cut back on health care payments to counties, even the most powerful authority will be able to preside only over service cutbacks, they warn.

But others say a new government agency with tax power just won’t fly in an era when voters seem so intent on slashing both government and taxes.

Indeed, the Healthcare Assn. of Southern California, whose members are mostly private hospitals, studied but later abandoned the possibility of mounting a $500,000 campaign to persuade voters to pass a ballot initiative creating a special hospital district with tax powers.

“We determined it not to be a viable alternative,” said association Senior Vice President Jim Lott.

Lott and others say another reason to set up a health authority is that it could make politically difficult cuts in the county’s vast health bureaucracy more easily than county supervisors. Non-elected health commissioners, backers say, would be less concerned about backlash from the county’s powerful employee unions.

Gilbert Cedillo, general manager of Local 660 of the Service Employees International Union, which represents about 40,000 county workers, said he supports an authority if its purpose is to improve the health department’s finances.

But he said he has serious concerns if the authority would be used “to destabilize health care of the whole community by overseeing the dismantling of the public health system.”

Some advocates say the biggest obstacle to a commission is the Board of Supervisors. Elected officials, they say, are unlikely to relinquish control over the health department, especially at a time when it faces so many troubles.

“I think it’s going to be a hard sell,” said Lark Galloway-Gilliam, executive director of Community Health Councils Inc., an umbrella group of medical providers and low-income consumers.

Lott said he fears that supervisors will seize on incoming health department chief Mark Finucane as an excuse to shelve any commission proposal, by saying they want to give him a chance to prove himself before they change how his department is run.

Board of Supervisors Chairwoman Gloria Molina said a health commission “could be a very valuable tool” and she supports the concept. But she added she is “concerned that we’re also going to usurp some power from Mr. Finucane when he comes in.”

Proponents caution that even if a commission is created, it is not a panacea for the county’s deep health care financing problems. Even with the $364-million federal bailout, the health department faces a $200-million deficit in 1996-97.

“It’s not going to solve the underlying structural problems that are creating the crisis,” said the medical association’s Johnston, referring to the 2.6 million county residents who lack health insurance.

“It will make the Department of Health Services more efficient and give it greater vision and [improve] long-range planning,” he said. “But the basic problem is that too many people are dependent on the system and there aren’t enough dollars to fund it.”

Times staff writer Jeffrey L. Rabin contributed to this story.