County Gets Warm Reception, No Funds

WASHINGTON -- Despite a health-care budget deficit that could reach $688 million in three years, the Los Angeles County officials who came to Washington this week did not, for the first time in years, ask the federal government for a bailout.

They knew they wouldn’t get one.

Even their attempts to persuade Congress and Bush administration officials to delay or reduce certain funding cuts ran into the reality that “there is no money” in the federal budget, said David E. Janssen, the county’s chief administrative officer.

Nevertheless, the county contingent wrapped up three days of meetings Thursday with its members saying they were pleasantly surprised by federal officials’ openness to their efforts to reform public health-care financing.

“These are smart people,” said Zev Yaroslavsky, chairman of the Board of Supervisors. “They realize our system cannot be allowed to fail.”

Yaroslavsky said county officials will begin work on detailed proposals to present to federal budget and Medicaid officials. “There is a window of receptivity here,” a sense that everyone wants to work together to solve the county’s health-care problems, he added.

The county’s health-care system, twice bailed out by the Clinton administration, is on the brink of “disaster,” officials acknowledged.

Los Angeles County, with 3 million uninsured residents, has an uninsured rate of 30%, the highest in the country. Similar problems can be found in most large urban areas, where Medicaid funding formulas that reward in-patient care over out-patient services have encouraged the over-building of hospitals.

On top of that, the Bush administration plans to cut or curtail financing programs that funnel federal and state dollars to hospitals that treat large numbers of the poor and uninsured.

The looming budget shortfall of more than half a billion dollars has forced county officials to consider converting two of six public hospitals into clinics and laying off thousands of workers. Thomas Garthwaite, the county’s new director of health services, is scheduled to submit a preliminary reorganization plan to the board next month. Final approval is due in October.

“It’s going to be ugly,” said Supervisor Don Knabe.

The visitors said their discussions with Office of Management and Budget Director Mitchell E. Daniels Jr., Medicaid and Medicare chief Thomas Scully and the heads of key congressional committees were short on details. But they were encouraged by the administration’s concern, flexibility and openness to new ideas, they said.

In general, county officials encouraged the federal government to revamp the Medicaid payment system to encourage outpatient services, preventive care and disease and medication maintenance. “Dollars should follow patients” into whatever kind of care is most appropriate for them, they told federal officials.

Garthwaite said that although the size of Los Angeles County’s deficits will probably require some cuts in health-care services, he believes many of the changes will both save money and improve patient care.

The visitors also discussed other issues -- including bioterrorism spending, welfare-to-work efforts and the jailing of criminal illegal immigrants--with lawmakers, including many members of California’s congressional delegation.

Supervisor Gloria Molina said county officials would probably return to Washington in August for further discussions.