State to Join Request for Health Aid

By LAURENCE DARMIENTO

Staff Reporter

State officials have finally agreed to go to Washington to discuss another federal bailout of L.A. County’s financially ailing health department, eliminating a significant hurdle in preventing another round of service cuts and hospital closures.

The officials agreed to accompany county health administrators to an Oct. 9 meeting with officials from the Centers for Medicare & Medicaid Services, the agency that runs the two huge government health programs and controls billions of dollars in federal health care spending.

The meeting was scheduled after the county met state demands last month for more details and public review of its plan to downsize the health department in order to win new federal help.

The state’s participation in the meeting is key, because any request for new federal aid to the county must be made by state officials, as the county has no legal standing to present that request formally under federal law.

In agreeing to go to Washington to discuss the county’s plea for what would be the government’s third bailout of the department in seven years, California Health and Human Services

Secretary Grantland Johnson said the state wanted to get the discussion started even though it had not yet embraced the county’s downsizing plan.

“We want to know from the feds that given the challenges in Los Angeles, what kinds of assistance are you prepared to discuss. What kinds of proposals would you be open to,” Johnson said.

The meeting comes none too soon for the Board of Supervisors and beleaguered county health officials, who have closed 15 health clinics this month as part of a plan to slash by half a projected deficit that will hit about $750 million by 2005.

Drastic cuts loom

The supervisors hope that if they downsize the department, the federal government will step in with money to close the rest of the budget gap. If that does not happen, health officials are planning drastic measures, including converting two large county hospitals into outpatient clinics and they say they must move in that direction by late October in order to keep the county’s 2003-2004 budget balanced.

Dr. Thomas Garthwaite, director of the county’s health department, said county officials do not expect a final answer on their aid request at the Oct. 9 meeting, but do need a sense by late October of whether aid will be forthcoming in order to forestall any more immediate service cuts.

“We may not get very far that first meeting,” Garthwaite said. “(But) there has to be enough reason to believe there is money at the end of the rainbow.”

State and county officials expect to meet with Tom Scully, administrator of the Medicare and Medicaid agency, and considered the No. 2 health official in the Bush Administration behind Health and Human Services Secretary Tommy Thompson.

Linking aid

The negotiations are expected to get sticky over a number of issues, but in particular the fact that this is the county’s third request for a bailout in seven years. Scully also has publicly stated his desire to link any federal aid to the county to larger issues involving total federal health care reimbursement to the state.

The county health department received $1 billion in bailouts from the Clinton Administration in 1995 and again in 2000 on the promise the department would be reformed and the county would not come back again for federal aid. But county officials only began this year to start reorganizing the department including consolidating expensive inpatient services and making deep cuts in other services. The plan has been opposed by its labor unions, which stand to lose at least 5,000 jobs, as well as health care advocates who point to the county’s huge population of uninsured residents.

As for the linking of county aid to the larger issue of how much federal money California receives from Washington for its Medicaid and other health programs, Johnson said he has made it clear to Scully that he does not think that is fair, especially if there is no new federal dollars available.

“That puts us in a situation where we have to take money away from other counties to help Los Angeles,” Johnson said. “We don’t think that’s an appropriate position to be placed in.”