County Out Millions for Health Care

Los Angeles County has forfeited more than $10 million in public health grants over the last three years because officials were unable to spend the money in time, according to documents and interviews with county health officials.

In 2002, the county returned nearly $3.4 million in grant money to the state and federal governments, on top of more than $4.3 million in 2001 and $2.6 million in 2000. Millions more had to be diverted to computers, media campaigns and laboratory tests because the county couldn’t spend the money as it was intended, on more-direct disease control and prevention efforts.

Without drawing much attention, the county is returning the grant money even as it dramatically pares its own spending on public health. Last year, county supervisors cut their public health budget by $10 million annually, or about 10%, to help bridge a looming budget shortfall.

“Even if the county had all the money in the world, they shouldn’t allow us to accept federal or state grants and not be able to spend them,” said Dr. James Haughton, the public health medical director. “It was one of the reasons I was getting ready to retire last month.”

Haughton, 77, said he only decided to stay on for another year to help coordinate the new smallpox vaccination program.

Public health supervisors lay much of the blame for the unspent grants on rigid county personnel policies that blocked or delayed hiring new workers. They point to project after project that has not been accomplished because of unfilled positions.

Among the results: A program to prevent sexually transmitted diseases among Latinas in the Los Angeles garment district was delayed for more than a year because the county was slow to approve a key position. Also postponed was a study on the effectiveness of providing medication to chlamydia patients to treat their sexual partners.

The county’s public health laboratory has been unable to take full advantage of two highly advanced pieces of equipment -- together worth more than $110,000 -- because it hasn’t received permission to hire the PhD-level microbiologists needed to operate them.

“Having state-of-the-art equipment really doesn’t help you if you have nobody to run it,” said Sydney Harvey, the lab’s director.

The largest source of returned funds, nearly $3 million, was intended to hire people to inspect hospitals and nursing homes, and to respond to complaints there. The county didn’t hire enough workers before its contract expired.

Other programs that returned funds include childhood lead-poisoning prevention, HIV tracking, the black infant health program and refugee preventive health care.

Each program has a different timeline for spending its money, and in some cases, the county has been able to get extensions.

John Schunhoff, director of public health operations, explained that the returned money represents only 5% of grants from state and federal agencies. The county received $213 million in state and federal grants during the last three years.

Those grants are unrelated to the billions of dollars received from the federal government to bail out the county’s network of public hospitals that primarily treat uninsured and low-income residents.

Schunhoff acknowledged, however, that “we clearly need to do a better job of making sure we do not return funds that we could otherwise spend.”

Haughton blamed the county’s human resources department, which he said consistently declines to approve new positions for public health workers, such as nurses and epidemiologists. Their rationale: The pay involved is too high for the job responsibilities.

Haughton said it doesn’t seem to matter that the state and federal government, not the county, are picking up the tab.

“We get the money, and then we can’t spend it because they tell us the positions we’re asking for” are too highly paid, Haughton said. “It’s past ironic.”

County human resources officials said that they are working with the health department to speed up hiring but that health officials need to do a better job of justifying the positions they request.

“Our duty is to align those duties and responsibilities with the proper [pay] class so we get equal pay for equal work,” said Michael Henry, the county’s director of human resources. “It sounds to me like somebody is looking for a scapegoat.”

Henry said that if one employee is paid more than others for doing equal work, that would create havoc in the workplace, which is heavily unionized.

Still, he said that his department has managed to grant 69% of the 376 new positions requested in 2001 and 2002 by the health department.

The rest of the positions were downgraded to lower-paid positions, which health officials said attracted less qualified candidates and caused delays in grant spending.

“If you’re starting a new program and you have a time-limited period to accomplish the program, you can’t afford to hire someone that’s going to learn on the job,” Haughton said. “You want to hire someone that can hit the ground running.”

Some of the problems lie outside the personnel department. The health department itself has been slow to approve new hiring because it wants the flexibility to move workers around in response to budget cuts.

Also, public health supervisors say, they have a difficult time finding good candidates; the best-qualified people can earn more money in the private sector.

Dr. Thomas Garthwaite, director of the health department, said he is working with his counterpart in human resources to speed the approval of grant-funded positions. Most bioterrorism positions, for instance, are now fast-tracked through the system.

There appears to be no pressure -- other than the loss of funds -- from the state and federal governments. The agencies that provide public health grants to Los Angeles County do not fault the county for its forfeitures.

“These challenges are not uncommon with county governments,” said Ken August, a spokesman for the California Department of Health Services. “Many times, local agencies face hiring freezes, difficulty in recruiting staff or changes in program direction” that require money to be spent differently than intended or even returned.

August couldn’t provide examples Friday of other counties that had returned unspent grant money to the state because of time constraints.

For its part, the U.S. Centers for Disease Control and Prevention does not monitor overall grant spending by counties, but instead looks at each program alone, spokeswoman Rhonda Smith said.

Some public health experts say the county could solve its grant woes if it shifted the money to nonprofit research foundations that don’t have the same hiring restrictions.

That approach was used extensively until 1997, when labor unions argued that it was unfair for those researchers to be immune from county layoffs.

But at this point, top public health officials say, something has to change. They aren’t just bemoaning the loss of money, they are losing the will to pursue grants in the first place.

“Why should I apply for grants ... if I can’t bring on people to do the work?” asked Dr. Peter Kerndt, director of sexually transmitted disease control. “There’s no incentive to pursue these funds.”