Federal Health Officials Propose $150M Bailout for Los Angeles County Health System

Federal health officials have proposed $150 million to assist Los Angeles County's "ailing" health system, but county officials say the amount "falls far short" of the $1.4 billion they requested to "avert massive cuts," the Los Angeles Times reports (Ornstein/Richardson, Los Angeles Times, 11/2). The county's health system faces an estimated $750 million budget deficit by 2005, and county officials are considering whether to close Harbor-UCLA and Olive View-UCLA medical centers, as well as dozens of public health clinics, to balance the budget. The county received a $1.2 billion federal bailout in 1995 and an extension of the funds in 2000, but the bailout funds will expire in 2005 (Kaiser Daily Health Policy Report, 10/10). Under the federal government's proposal, $50 million would come from a "long-delayed" settlement with private hospitals over reimbursement rates and $100 million would come from a program that gives extra funds to hospitals that treat a large number of poor and uninsured patients. According to a Nov. 1 memorandum from the county health department to county supervisors, the proposed $150 million would not be enough to prevent the closing of the two UCLA medical centers. The Times reports federal health officials said that no official agreement had been reached and that "negotiations are not over." CMS Administrator Tom Scully plans to visit Los Angeles on Nov. 6 to tour public hospitals and meet with county supervisors. However, some supervisors have said that Scully "might as well stay home" if he plans to make the $150 million proposal his final offer, the Times reports. "We are not interested in one-time money. It's not a solution to our problem -- it basically delays the inevitable. If anybody believes a one-time check is going to solve our problems, he is sadly mistaken," county Supervisor Zev Yaroslavsky said. But Supervisor Don Knabe said the county is "looking for dollars to save lives, and we should take them as we can get them" (Los Angeles Times, 11/2).