County Assured of U.S. Bailout, Supervisors Say

A trio of Los Angeles County supervisors, in Washington to pressure the Clinton administration to deliver a promised $364-million bailout of the county’s health care system, said Monday they had received assurances that the money should be arriving soon.

“It’s in the bag,” Supervisor Yvonne Brathwaite Burke said after she and a phalanx of county officials spent more than an hour in consultations with White House Chief of Staff Leon Panetta. The county should receive confirmation of the tentative approval of the $364 million--pledged by the president during a September visit--within the week, the supervisors said. Final approval can be given after a 30-day public comment period.

Nevertheless, a relieved Supervisor Zev Yaroslavsky said, “we have a deal.”

A White House official who spoke on condition of anonymity concurred with the supervisors’ confidence, saying that their depiction of the meeting with Panetta and his aides was accurate. Another high-level administration official familiar with the talks also agreed.

The supervisors said they went to the nation’s capital because time is running out. Not only is the $364 million needed before the end of the fiscal year June 30, they said, but the county needs to know how much federal money it will get in the coming years before it starts budgeting next year’s restructuring of its health care system.

Last Friday, the county submitted its formal application for a waiver of federal health regulations that is key to approval of the $364 million. The waiver, and the money, are part of a proposed five-year demonstration project designed to show how an urban health care system can be changed from one emphasizing costly hospital treatment to one stressing preventive care at clinics.

The supervisors said they and the Clinton administration have agreed to a 45-day time frame in which to negotiate long-term details about the plan. White House aide John Emerson was designated as the coordinator for those negotiations, which had been complicated by the highly technical nature of the waiver application and the numerous federal experts needed to review the county’s request.

The county’s two Republican supervisors, Mike Antonovich and Deane Dana, did not make the trip. But many health officials--including Health Services Director Mark Finucane and former health czar-turned-legislative-strategist Burt Margolin--flew to Washington for Monday’s meetings.

The supervisors, joined by Finucane and Margolin, also met with U.S. Health and Human Services Secretary Donna Shalala before the White House meeting. At that meeting, the supervisors were reminded that federal officials are insistent that the entire restructuring effort achieves “budget neutrality” over five years, in which the upfront investment is recouped by savings over five years. Federal officials also are concerned that they do not set a precedent causing them to be asked to bail out other counties with financially troubled health systems.

This was not the first time that the Board of Supervisors has taken its case directly to the White House in an effort to overpower health care bureaucrats, who have been concerned about the cost and precedent-setting nature of the waiver and the depth of the county’s commitment to restructuring its health system.

Before the president announced the $364-million bailout at Santa Monica Airport, county and state officials had already held two days of intensive negotiations in Washington that won political support for their financial assistance requests.

In preparation for this round of White House meetings, Margolin sent the five supervisors a detailed memorandum on the need to press for short- and long-term funding answers. Any delay, Margolin said, “makes rational decisions about [health] system restructuring impossible and jeopardizes the success of the waiver.”

“Given our experience with [federal health care officials] over the past several months, a delay . . . without a scheduled date for final agreement is an invitation for paralysis and waiver failure,” he added.

In the memo, Margolin once again sharply criticized a Feb. 24 Times article on the waiver negotiations as “a major distortion of facts” because it said federal officials were concerned about the depth of detail in the county’s restructuring plan and the time it was taking to submit the application.

However, documents obtained by The Times under the California Public Records Act indicate that county officials were well aware of federal officials’ concerns over those issues. In a Feb. 27 letter sent to Health Care Financing Administration Administrator Bruce C. Vladeck, Margolin and Finucane acknowledged that “among the concerns” expressed by Vladeck were that the county has been slow in “producing a substantive restructuring plan” and in submitting the formal waiver request.

Bornemeier reported from Washington and Meyer from Los Angeles.