OVERVIEW–Critical Condition

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WAIVER KEEPS COUNTY HEALTH SYSTEM AFLOAT, BUT HARD PART LIES AHEAD

By noon on a recent morning, some 16 people were patiently sitting in the second-floor waiting room of the Venice Family Clinic, where children squirmed in their strollers and adults watched TV.

By most standards, the wait would be long. On average, it takes nearly two hours for patients to make the trip from the waiting room to the exam room and back out the front door. But when you’re poor, time is usually more plentiful than money.

And lots of indigent patients some 17,000 a year spend long stretches of time waiting to be treated at the Venice Family Clinic. The clinic sees more than twice the number of patients it was designed to treat, and it is forced to turn away 10 to 15 people a day because it simply cannot accommodate any more.

One might expect those conditions would now improve, with L.A. County late last month winning a $1.2 billion, five-year extension of its Medicare waiver. No such luck. Conditions are expected to become even more intense at the Venice Family Clinic, as well as at the other 39 outpatient facilities that are being increasingly relied upon as the primary source of health care for L.A.’s 2.7 million working poor who have no insurance.

While county health officials are clearly relieved to have won the waiver extension, the hardest part lies ahead.

Mark Finucane, director of the county Department of Health Services, met with the Board of Supervisors last week to assure the panel that his team of managers is working steadily to devise a rescue plan. A key component of that plan involves getting more of the county’s 39 clinics and its 170 private/public partnership clinics certified as “federally qualified health centers.” That means the clinics would receive a higher reimbursement rate from Medi-Cal programs.

That step alone could initially add as much as $60 million a year to the department’s budget, said Burt Margolin, a lobbyist and the county’s former health czar, who has been working on the health department problem since 1995.

“The new federal mandate is to work out a way of maintaining the system and providing for stability so we don’t have these periodic financial crises and the anxiety that these financial dips can create,” Margolin said.

Finucane has been ordered by the federal government, the state and the county Board of Supervisors to restructure a bulky, bureaucratic department to make it self-sufficient within five years. The director must also find various ways to get more health care funds for a county that will be caring for 3 million uninsured working poor by 2005.

“We have to make sure we find enough revenue to make up for the waiver loss (in the next five years),” said Finucane, who has been the county’s director of health services since 1996. “What we have to do is come up with a plan in seven months that settles on the quickest and least bureaucratic way.”

Time is important because the federal bailout involves a pay-out formula that gives the county a large chunk of the funds now, adding up to about $246 million in fiscal 2000-01. By fiscal 2004-05, it dwindles to $87 million.

It’s not the first time the county has been faced with a five-year clock to restructure its massive public health system. Five years ago, when the federal government granted its first waiver, the county asked facilities like the Venice Family Clinic to take the burden off government-owned health centers by treating more indigent patients. Those uninsured, low-income people normally might not get any medical attention, or might be forced to wait until they were so ill they would end up in the emergency rooms of the county’s six hospitals.

In return for taking on the additional burden, the county would reimburse the clinics with part of the $1 billion in federal funds it received in 1995 as part of a five-year waiver on Medicaid rules. The Venice Family Clinic gets about $2 million a year of that windfall.

Much progress was made during the first five years, but even more must be made over the next five.

Other steps being taken by Finucane to lead the county toward self-sufficiency include:

  • Reducing the county Health Services Department’s $2.6 billion annual budget by $18.2 million in administrative cost cuts in each of the next five years, and asking managers of county clinics and hospitals to trim $82 million a year while maintaining service levels.
  • Further reduce the 23,000-person health department staff over the next five years. It is already 15.2 percent smaller than it was five years ago.
  • Changing the way county hospitals are reimbursed by the state for treating Medi-Cal patients during inpatient stays. Instead of getting paid for every day a patient remains in the hospital, the county wants to be paid for each case. This would be a financial incentive for the county hospitals to cut the time patients spend in the facility.
  • Find a way to streamline Medi-Cal forms so more needy individuals are encouraged to sign up and take advantage of the program.
  • Maintain the existing hiring freeze.
  • Defer maintenance at health facilities.
    While all this restructuring is going on, the county Board of Supervisors wants the state and federal governments to find some way the working poor or their employers can pay for health insurance. The board also wants the government to help pay for the county health services used by illegal immigrants.
    “The mandate that we alone carry the fiscal burden of illegal immigration must end,” said county Supervisor Michael D. Antonovich. “The bureaucracy will have to accept the fact that Los Angeles County can no longer afford to do business as usual.”
    If the county doesn’t reform its health care system, it will be facing a $523 million deficit by 2005.
    Despite the dire long-term outlook, county officials’ short-term anxiety has been somewhat alleviated by their successful negotiations with federal officials. At the Venice Family Clinic, Director Elizabeth Benson Forer had been preparing to slash her $10 million annual budget if the waiver hadn’t been renewed.
    “I’m very pleased there was the waiver extension because we’d have been facing some serious cutbacks in services,” Forer said.
    Clinic administrators weren’t the only people who were nervous.
    Rebeca Cueva, a 62-year-old grandmother who spent 18 years of her life working for various companies that never provided her with health insurance, was at the Venice clinic last week waiting to see a doctor.
    Cueva’s legs ache with arthritis and rheumatism. She has high blood pressure. Her daughter can no longer bear to see her mother suffer and has brought her to the clinic, which is the largest free clinic in the country and a model for other health facilities.
    “If I didn’t have this clinic I wouldn’t get any medical attention because I don’t have any money,” said the Spanish-speaking woman, whose husband died an ungraceful death nearly a decade ago because he too had no health insurance. “What would become of me?”

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