Jails, Debt or Health Care?

The Orange County Board of Supervisors needs to remember that the “tobacco settlement” was not the “bankruptcy settlement” or the “jail beds settlement.” It was a payoff by tobacco companies for damages to health caused by their products. The money should be spent on health care.

At a community center in Costa Mesa several days ago, health care advocates pressed their case with the supervisors. The $912 million that Orange County seems likely to get over 25 years as its part of the national settlement with tobacco companies should be spent on health.

San Diego County, to its credit, has been far out front on the topic. Supervisors there voted this year to allocate 100% of the funds to health care programs.

Of course, San Diego did not suffer bankruptcy, as Orange County did nearly five years ago. To get out of the bankruptcy, the county has borrowed heavily, and its interest costs now run upward of $60 million a year.

The county’s financial officer, Gary Burton, believes that using the tobacco settlement money to retire the debt can also provide the county with enough money to build new jails. He has developed a complex plan worth both scrutiny and skepticism. Only if the county somehow comes up with $30 million or so for health care each year and still finds extra money for jails and debt retirement would the plan merit study.

Orange County also labors under a two-decades-old federal court order to reduce overcrowding in its jails. The tobacco settlement money could be spent to expand existing jails, but that’s not the proper use. Better to use traditional funding mechanisms for the bankruptcy recovery debt and new jail beds. Use the tobacco windfall money for health care.

State statistics this year showed Orange County is the second healthiest of all 58 counties in the state. But there are large gaps. An extensive survey this year found that nearly 20% of the county’s residents do not have health insurance. That means preventive health care is unlikely. Instead, the uninsured wait until their choice is a hospital emergency room. That raises costs dramatically.

That survey found that nearly 20% of the children in the county have asthma, more than double the national rate. Those from affluent families can manage the illness. Those from poor families say it inflicts “a very serious impact” on their lives. Tobacco settlement money can pay for education programs for those children, their parents and school staff. That’s just one of many possible uses for the funds, which amount to a windfall in a county with a poor record of spending public funds on health.

Even before the bankruptcy, Orange County relied more heavily than other nearby counties on private health care providers like doctors and hospitals and on community groups to treat the sick. Two decades ago, when it handed its hospital over to UC Irvine, it said it would maintain a commitment to public health care. That commitment has not been strong. And after the bankruptcy, the amount of money spent on health care as a percentage of the county budget declined.

The county closed one of its own clinics to save money. Community clinics cut back hours or the number of patients served or, in one case, closed. Extra money could reverse that slippage. The funds also could help pay hospitals and doctors closer to their real costs for treating emergency care patients.

The $30 million to $38 million per year the county will receive from the tobacco settlement should not just restore the funding to its percentage before the bankruptcy. The money should go beyond that and finance programs like community clinics and education about preventive medicine. It’s cheaper to keep someone healthy than to try to cure an illness.