County on Brink of Big Changes in Health System

Until now, the promise of restructuring Los Angeles County’s vast public health system has been just that--a promise.

But almost a year after the nation’s second-largest public health system was rescued from collapse by a massive federal bailout, the first serious steps are in the making to transform the expensive hospital-heavy system into one that emphasizes less costly primary and preventive care at community clinics.

By the end of this year, county health officials hope to more than double the number of outpatient clinics in the community from the present 39 to 83, including four in the San Fernando and Antelope valleys, through the most extensive use of partnerships with private medical groups in the county’s history. It is a dramatic departure from the traditionally separate public and private health care systems in the county.

“This is the way we should have been providing health care historically,” said Health Services Director Mark Finucane.

“This will avoid hospitalization. This will bring patients and their families closer to [clinics] where they live when they need care,” he said. “It is the essence of the way a health care system ought to be redirected, further and further away from institutions and out into the community.”

The move to expand the network of outpatient clinics, the hours they are open and the patients they see is in stark contrast to the county’s plans to simultaneously shrink its huge hospital system.

At a daylong hearing Monday, the Board of Supervisors is expected to hear an earful of opposition to plans to seek a private operator for Rancho Los Amigos Medical Center, the county’s nationally renowned rehabilitation hospital in Downey, and to reduce medical staff at County-USC Medical Center in Boyle Heights and Olive View/UCLA Medical Center in Sylmar because the number of patients is dropping. The drop is occurring partly because of increased competition among public and private hospitals for Medi-Cal patients.

While county government and its health department in particular have long been known for bureaucratic sluggishness, the clinic expansion appears to be on an unusually fast track.

County health officials have contracts drafted, payment schedules negotiated and tentative hours of operation established, and have developed projections of the number of patients they expect to be served at each location.

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At the same time, in the hospital system the jobs of more than 1,000 county health workers and the ability of thousands of patients to obtain outpatient services at Rancho Los Amigos are at stake. The county is negotiating with three private medical groups to take over operation of the hospital.

Finucane acknowledged, “This is going to be a painful process.” But he said that in the long run, changing the health system is in the best interests of the patients and the community.

Finucane said he is attempting to find solutions that will preserve some outpatient services at Rancho and minimize the impact of the cuts there on the rest of the health system.

“We’re at a crossroads,” he said. “It’s like coming off of one road and going on another. It’s going to be hard for people. . . . In the long term, when we finish this, we will be better off.”

The expansion of outpatient clinics and contraction of hospital services is precisely what the county promised it would do in order to win the $364-million financial bailout announced by President Clinton last September in Santa Monica.

Since then, the federal government has committed an additional $172 million to help stabilize and remake the county’s public health system, which serves the biggest proportion of poor and uninsured residents of any major metropolitan area in the nation.

To obtain a waiver of federal Medicaid regulations and shift federal dollars from hospital care to outpatient services, the county pledged to essentially remake its health system in five years.

After protracted negotiations over how this would be accomplished, the county agreed last spring to reduce the number of hospital beds by at least one-third and increase outpatient visits by 50% by June 2000.

Finucane called the blueprint for expanding outpatient clinics “a significant down payment” on the county’s commitment to restructure its health system.

“It’s not just that we are expanding services . . . it is the manner in which we are expanding services,” he said.

After meeting with Finucane last week in Washington, Bruce Vladeck, administrator of the federal Health Care Financing Administration, praised the clinic expansion plan, calling it “quite a positive development.”

Vladeck, who oversees the federal funding that is vital to the county’s restructuring effort, said Finucane and his staff are clearly doing a lot of work and making a lot of progress.

“They still have a very long way to go,” he said. “It is a very big job. It is an enormously difficult task.”

Over time, Vladeck said, if the county is going to shrink inpatient operations at its hospitals, there are going to be fewer jobs overall.

The clinic expansion is targeted in areas where census data shows the greatest concentration of poverty and low-income residents who are most likely to lack health insurance.

Altogether, an estimated 2.6 million people in the county, most of whom are working, have no health insurance. An additional 1.8 million residents are on Medi-Cal, the joint federal-state medical insurance program for the poor.

Expansion of clinic operations providing an array of primary care and preventive services from routine exams to X-rays and lab work will be spread across the county with new clinics popping up in places including the Antelope Valley, the San Fernando Valley, Hollywood, downtown Los Angeles, East Los Angeles, South-Central and South Los Angeles, the South Bay and southeast areas, Long Beach and the San Gabriel Valley.

In the San Fernando and Antelope valleys, the social service group El Proyecto del Barrio would run a clinic in Arleta that would offer primary care treatment; Sarkis-Broadway Family Medical Center would operate a Glendale facility for general relief recipients; and the Tarzana Treatment Center would run primary care clinics in Tarzana and Lancaster, according to a county health department report.

Clinics in Canoga Park and Valencia that are owned by the county would continue to be run by the private, nonprofit Northeast Valley Health Corp., though the group would sign a new contract providing county reimbursement for the care of uninsured patients, county officials said.

The county would continue operating health clinics in Pacoima, North Hollywood, San Fernando, Burbank, Glendale and Tujunga.

The county’s Mid-Valley Comprehensive Health Center in Van Nuys would not be affected under the restructuring proposal.

The health department report did not recommend that the city of Palmdale--which recently saw its last remaining private hospital go out of business--gain a county health care facility.

Next year, county-owned High Desert Hospital in Lancaster is scheduled to be privatized.

The county provided about 4 million outpatient visits in the 1994-95 fiscal year before a gaping hole in the health department budget threatened to drive the county to the edge of bankruptcy and forced unprecedented cuts in health services.

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The financial crisis of 1995 led to the layoffs of more than 2,500 health workers and caused a steep decline in the number of outpatient visits. About 3.2 million visits were provided in the 1995-96 fiscal year that ended June 30.

With this first stage of expansion in primary care clinic sites, county officials hope to add back about 465,000 of the visits that were lost, bringing the projected total to about 3.65 million visits by the end of this fiscal year.

The ultimate goal is to reach 6 million outpatient visits annually by the end of the five-year waiver in mid-2000 and reduce hospital beds from 2,595 last year to no more than 1,719.

The expansion of primary and preventive care at the clinics won the backing of key elements of the medical community who had doubted that the county would fundamentally change course.

Dr. Brian Johnston, president of the Los Angeles County Medical Assn., said that if the expanded clinic system makes health care more accessible to the poor and uninsured, “we would strongly support that.”

But Johnston had considerable misgivings about reports that there may be a new round of layoffs within the health department, and he noted that there have been some excellent programs at Rancho Los Amigos.

“People are really, really upset, concerned and frantic” about the proposed cuts at Rancho, said Beth Osthimer, an attorney for the San Fernando Valley Neighborhood Legal Assistance.

She said the reductions would eliminate more than 90% of outpatient services at Rancho Los Amigos. And she questioned the county’s commitment to providing care to those who need it most.

Osthimer also said the effect of another round of layoffs would be devastating on employees and could create upheaval in staffing as more senior employees bump down in rank and force out newer hires.

“The board has to look at this really hard,” Osthimer said. She said remaking the health system is “like trying to build the plane while you’re flying.”

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L.A. County’s Health System: Expanding and Contracting

In keeping with promises made when the federal government bailed out Los Angeles County’s troubled public health system last fall, the county is about to launch an ambitious program to more than double the number of outpatient medical clinics in the community. Through the most extensive partnerships with private medical groups in its history, the county intends to expand primary and preventive care for the poor and those lacking health insurance.

Outpatient Visits

1994-95: 4.0 million

1995-96: 3.2 million

1996-97: 3.65 million (projected)

At Present

County operated health clinics: 33

County clinics operated by private partners: 6

By Year’s End

County operated health clinics: 29

County clinics operated by private partners: 10

New privately operated health clinics: 36

New private clinics for general relief recipients: 8

Planned private clinic locations:

1. Antelope Valley: Lancaster

2. San Fernando Valley: Tarzana, Arleta, Glendale

3. Westside: Venice

4. Central Los Angeles: Hollywood, Chinatown, Skid Row

5. South and South-Central Los Angeles: Windsor Hills, Florence-Firestone, Willowbrook, Compton, Watts, Lynwood, Rancho Dominguez

6. South Bay/Southeast: Inglewood, Lawndale, Torrance, Long Beach, Lakewood, Bellflower, Paramount, Bell Gardens, Downey

7. Catalina: Avalon

8. San Gabriel Valley: East Los Angeles, Highland Park, Alhambra, Pico Rivera, Whittier, El Monte, West Covina, Baldwin Park, La Puente, Pomona

Hospital Cutbacks

While expanding the number of clinics, the county has promised to cut at least one-third the number of beds in its huge hospital system as part of a move from costly inpatient care to less expensive outpatient treatment.

* Rancho Los Amigos Medical Center, Downey: The Board of Supervisors holds a daylong hearing Monday to hear comment from patients, medical staff and the community on plans for sweeping cutbacks in services at the nationally renowned rehabilitation hospital. The move to streamline operations and move toward privatizing the facility could cost more than 1,000 county health workers their jobs and create a domino effect of layoffs throughout the health system.

* County-USC Medical Center, Boyle Heights and Olive View/UCLA Medical Center, Sylmar: A decline in the number of patients could result in the loss of 88 permanent and 66 temporary jobs at the two hospitals.

Source: Los Angeles County Department of Health Services