Financial Problems in Los Angeles County’s Public Health System Could Signal Health Crisis for Nation

The financial crisis faced by Los Angeles County's public health system is a "harbinger of the predicament soon to face states nationwide," and a recently approved ballot measure that raises property taxes to fund the county's trauma care centers and emergency rooms indicates "that health care is returning to the top of voter concerns," the Washington Post reports (Sanchez, Washington Post, 12/31). Under Measure B, approved Nov. 5, property taxes will increase by three cents per square foot, or an average of $42 per year. The measure also will establish a three-cent per square foot tax on structural improvements; a half-cent per square foot tax on parking improvements; and a tenth of a cent per square foot tax on agricultural, vacant or similar land. Los Angeles County officials expect that the measure will raise about $175 million in additional revenue each year. The county will spend $92 million on emergency rooms, $63 million on 13 public and private trauma centers and $20 million to fight bioterrorism (Anderson, Los Angeles Daily News, 7/26). The new tax has been "hailed as a godsend for the county's ailing health system," the Post reports (Washington Post, 12/31). The Los Angeles County health system faces an estimated $750 million deficit by 2005, and the county earlier this year decided to close 11 health clinics, close four school-based health centers and end inpatient services at High Desert Hospital in Lancaster, Calif., to help address the problem (Kaiser Daily Health Policy Report, 8/22).

National Trend?
The county's problems are "one sign among many across the country of how growing economic hardships in states are creating new crises in health care," the Post reports. Many state officials cite health care as their "fastest-rising" expense but raise concerns that "cutting medical services when demand for aid is increasing and public health networks are under growing financial pressure will only make matters worse," the Post reports. Decreased tax revenue and increases in the number of uninsured residents have "hit many states with a double whammy" and placed "even more burdens" on their Medicaid programs, a trend that has prompted a number of states to ask voters to approve tax increases to help cover the cost, the Post reports. "States are just beginning to face this issue, and there's no telling yet how it's going to play out year. But we are certainly seeing crises that have to be dealt with," Richard Cauchi, a health care analyst for the National Conference of State Legislatures, said (Washington Post, 12/31).

California Problems Faced by Many States
Rising health costs and reducing Medicaid benefits to cover budget deficits -- two factors California is experiencing -- are "threatening trends" faced by nearly all states and could lead to a "tidal wave in the number of Americans without access to health care," Los Angeles Times columnist Ronald Brownstein writes. About 20% of California residents did not have health insurance in 2001, according to a report released earlier this year by the U.S. Census Bureau, Brownstein notes. "Ordinarily, this would be precisely the time the state expands its health care safety net to catch those losing private insurance," he adds. However, Brownstein writes, Gov. Gray Davis (D) last month proposed a number of reductions to Medi-Cal, the state's Medicaid program, to help cover a state budget deficit that could reach $35 billion over the next 18 months, and he may propose additional reductions next year. "The state budget squeeze is most severe in California, but virtually every state is sliding into this same ravine," Brownstein writes, adding, "Inevitably, those deficits are forcing states to point their knives at Medicaid," the second-largest cost in most state budgets. He recommends that states raise taxes to help cover increased Medicaid costs but adds that the "impending Medicaid disaster is not a problem the states can handle alone." Brownstein asks President Bush and Congress to pass legislation next year to help address the issue of the uninsured. He concludes, "More families without care, longer lines in emergency rooms, more hospitals and public clinics bleeding red ink, more kids sick at school: That's what is looming if Washington continues to close its ears to the health care alarm ringing now in California -- and soon in state capitals from coast to coast" (Brownstein, Los Angeles Times, 12/30).