Federal Bailout for Los Angeles County Health Department Unlikely, Scully Says
CMS Administrator Tom Scully on Oct. 1 said the federal government will not give Los Angeles County the $350 million bailout county supervisors have requested to keep several area hospitals and clinics open, the Los Angeles Times reports. The Los Angeles County health system faces a potential $750 million deficit by 2005, and county officials have set an Oct. 29 deadline to decide whether to close "dozens" of public clinics, as well as Harbor-UCLA and Olive View-UCLA Medical Centers, to balance the budget (Riccardi/Ornstein, Los Angeles Times, 10/2). The county in 1995 received a $1.2 billion federal bailout, which was extended in 2000 and expires in 2005 (Kaiser Daily Health Policy Report, 8/12). County and state officials were scheduled to meet with Bush administration officials next week about a third federal bailout. But Scully said the county's request is "dead on arrival." He added, "We don't want to create a meltdown of the L.A. County hospitals, but I have to explain to Houston and New York and St. Louis and Nashville why L.A. County is getting a special deal. I don't think it's our responsibility to just write them a check and bail them out." He noted that Los Angeles County is the only locality in the nation to have a "direct agreement for additional funds" from CMS, the Times reports. Scully said that the Bush administration is willing to help the county and proposed alternate funding sources, such as using money from the disproportionate share hospital program, which gives additional money to private hospitals providing care to indigent patients. In addition, Scully said that the state "has flexibility" to assist the county. But California officials anticipate a state budget deficit of at least $10 billion next year, and they are "not eager" to grant additional funds to the county, the Times reports. The state contributed $300 million in 2000 as part of the county's most recent federal bailout. According to Grantland Johnson, Gov. Gray Davis' (D) secretary of health and human services, Scully's stance "basically jeopardize[s] the viability of the California health care system." County supervisors on Oct. 1 requested that Davis call a special session of the state Legislature to address health issues and asked the governor to declare the county "medically underserved," a move some supervisors believe would "free up" additional funds (Los Angeles Times, 10/2).
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