California Officials Decline to Forward Los Angeles County’s Request for $1.4M Federal Bailout

California Gov. Gray Davis' (D) administration last week said it will not forward Los Angeles County supervisors' request for a federal bailout of the county's health department unless the supervisors reconsider their plans to close several public health clinics and end inpatient services at a local hospital, the Los Angeles Times reports (Riccardi, Los Angeles Times, 8/10). Facing a $700 million deficit in the department's $2.9 billion operating budget for 2005, supervisors earlier this summer approved a plan to eliminate 5,000 county health jobs; close one of the county's six public hospitals and 11 of its 18 clinics; and cut county funding of private clinics by 25%. The plan will be considered during public hearings this summer and then supervisors will vote on it for a second time (Kaiser Daily Health Policy Report, 7/15). County officials said that the plan is the best way to reduce the health department's size, while maintaining as many services as possible. County officials also have said that the department needs to begin making the cuts soon in order to convince federal officials the county deserves another bailout (Los Angeles Times, 8/10). In 1995, the department received a $1.2 billion federal bailout package, which was extended in 2000 and expires in 2005 (Kaiser Daily Health Policy Report, 7/15).

Questions About Access
State officials said that they would not forward the county's request for $1.4 billion in federal funding until the county holds more meetings to discuss patient access under a scaled-back health system. Dr. Diana Bonta, director of the state Department of Health Services, said, "I think there is opportunity to sit together and put more thought into it." State health officials added that by closing clinics, the county appears to be going against promises to expand outpatient care services that it made to the federal government when it received previous bailouts. County Supervisor Zev Yaroslavsky accused the state of "stalling," saying, "There is a health care crisis in California that is not unlike the energy crisis a couple of years ago. 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" (Los Angeles Times, 8/10).