County Hospitals in Red, Too

It is with considerable concern that I read your characterization of our county hospitals as “highly profitable” in your article of Nov. 23 (“Many L.A. Hospitals in the Red as Payments Are Cut”), particularly given the degree of fiscal challenges they have recently faced and which lie ahead. Your assertion in this regard appears to be based on state reports that substantially overstate the net benefit of certain federal revenue streams for public hospitals. The state’s share of these revenues, which are paid to both public and private hospitals, is entirely funded by local government, yet is not allowed as an expense in the state’s reports. When adjusted for this single item, the total “net income” attributed to the six county hospitals of $673.9 million becomes a $77.9 million net loss.

Since falling near the brink of bankruptcy in fiscal 1995-96, the county’s Department of Health Services, which manages these six hospitals, has cut nearly 4,300 jobs (15.5 percent of its total budgeted workforce) and continues to struggle to close a previously projected budgetary shortfall of $1 billion for the five years ending June 30, 2000 through an extensive variety of aggressive cost cutting, system restructuring and revenue generation efforts. I hope this brief letter will help clarify that our county hospitals too are “being squeezed from every conceivable quarter.”

MARK FINUCANE

Director of Health Services

County of Los Angeles