State Balks Over L.A.’s Health Cuts

Putting pressure on Los Angeles County to roll back its recent health cuts, the Davis administration is refusing to forward county supervisors’ request for a federal bailout until they reconsider plans to close 11 clinics and end inpatient services at High Desert Hospital.

Supervisors made those reductions in June in the hopes of spurring the federal government to provide $1.4 billion to the troubled Department of Health Services.

But the request for federal money must go through the state, and California’s top health official informed county officials Thursday that the state will not forward it until the county holds additional meetings and explains how it will protect patient access to care in its smaller system.

“I think there is opportunity to sit together and put more thought into it,” Dr. Diana Bonta, director of the state Department of Health Services, said in an interview Friday.

Bonta and Grantland Johnson, secretary of California’s Health and Human Services Agency, also raised another concern--that the county’s request could complicate the state’s negotiations with the Bush administration over a wide array of health financing matters.

Under discussion are policies ranging from Washington’s proposal to cap Medicaid reimbursement to the extension of a waiver that permits California to send additional dollars to hospitals and trauma centers.

The Bush administration has indicated that it wants to deal with all of the issues at once. Health officials say that could open up the possibility of the federal government forcing the state to assist Los Angeles at a time when California faces a $23-billion deficit.

The state’s refusal to forward the bailout proposal brought groans from county officials, who made the cuts in June over stringent objections from health advocates and organized labor. Supervisors argued that they needed to begin trimming the department immediately, in part to convince Washington that they deserved another bailout.

This would be the third bailout in seven years from Washington. The county faces an $800-million deficit in two years because the latest of those bailouts--approved in 2000--dwindles every year.

County leaders, who have been discussing the bailout proposal with state officials for weeks, accused the Davis administration of using “delaying tactics.”

“The state is stalling us,” said Supervisor Zev Yaroslavsky, who complained that his calls to Gov. Gray Davis have gone unanswered for three weeks.

“There is a health-care crisis in California that is not unlike the energy crisis a couple of years ago,” said Yaroslavsky, who last month proposed a $168-million parcel tax to fund emergency rooms. “The governor and his administration are going to have to suck it up and try to deal with it now, or it is going to be a millstone hung around all our throats.”

Fred Leaf, the chief operating officer of the county’s health department, said the situation needs to be resolved as soon as possible because his agency needs to know whether it is getting the bailout or must make another round of cuts.

State officials said that the county needs to look at other ways of saving money. Bonta, for example, said some public health agencies elsewhere have moved their staff into private medical facilities to avoid paying overhead.

State officials said Los Angeles appears to be reversing course on reforms it promised in order to secure its first two federal bailouts in 1995 and 2000.

At that time, the county pledged to expand outpatient care, but is now scaling back that type of care by shuttering the 11 clinics and cutting contracts with private providers by 25%. “This is a radical departure,” Johnson said. “It is not a mere tweaking of the arrangement. It is a wholesale shift in policy.”

County health officials defended their plans, saying it was the best way to shrink the department and preserve as many services as possible. They are planning a far deeper round of cuts should they fail to secure the bailout by October.

Supervisor Yvonne Brathwaite Burke said that it is hard to cut hospitals in the sprawling county, but noted that the next round of reductions includes closing emergency rooms at two hospitals. She said that the state’s delay makes dealing with that next step even tougher.

“It doesn’t sound good,” Burke said. “But we will keep talking and trying to work it out.”