County Not Ready To Concede Loss Of Federal Funds

Health Care
by Laurence Darmiento

It's official L.A. County's already strapped public health system stands to lose $125 million in annual federal funding under a Medicaid payment rule change that was published Jan. 18 in the Federal Register.

Now the question is whether the entire state, which could lose a total of $250 million, will be able to stretch out that loss over a seven-year transition period or have to accept it wholesale in the next fiscal year.

County officials say they are still not giving up trying to keep the funding, given that the loss is equivalent to the cost of running both Harbor-UCLA and Olive View-UCLA medical centers.

Under the rule change, states will no longer receive Medicaid overpayments that are intended to help compensate public hospitals that care for large numbers of uninsured patients. The Center for Medicare and Medicaid Services, which is run by Bush Administration-appointee Tom Scully, has decried the use of that money by some states for other purposes, such as road construction.

County officials say the criticism doesn't apply to California where the money is used for its intended purpose.

Growing Specialty

It seems that doctors are always complaining about managed care. But at least one local medical group is exploiting a niche where doctors are flourishing.

IPC The Hospitalist Co., a North Hollywood start-up, has steadily expanded its practice since it was founded in 1997 with $27 million in venture funding.

The company has physicians in five states who specialize in managing in-patient admissions at hospitals hence the term hospitalist.

The company started out with a handful of full-time doctors in 1998, but that number has steadily grown to about 160 doctors now.

Dr. Adam Singer, the company's founder and chief executive, says the company's services are needed because advances in technology and treatment, as well as the growth of managed care, leaves busy doctors little time to oversee the care of their hospital patients.

"Having a doctor who is expert at managing hospital care allows for reducing the costs while delivering superior quality," Singer said.

The privately held company, which contracts for its services with insurers, lost money last year Singer did not specify but is projecting to earn $6 million before interest, taxes, depreciation and amortization this year.

Labor Troubles

The lingering labor dispute at the Glendale office of American Medical Response appears to be nearing a conclusion.

The roughly 100 emergency medical technicians who work at the office, which services the San Fernando Valley, will vote this week on a contract that offers a 3.5 percent annual wage increase over four years.

The Service Employees International Union, Local 250, which represents the workers, will recommend ratification of the contract even though workers had sought far more, said Randy Johnese, a union organizer.

Staff reporter Laurence Darmiento can be reached at (323) 549-5225 ext. 237 or at

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