Politics Could Determine Size of Health Care Bailout

By LAURENCE DARMIENTO

Staff Reporter

A key Bush Administration health care official says it’s a straight technical policy decision on whether Los Angeles County gets another federal bailout for its beleaguered health care system.

But Rep. Henry Waxman, D-Los Angeles, who has assisted the county in getting two prior federal bailouts, has a different take: ultimately it’s a matter of politics.

With the county’s health care budget deficit growing to a projected $700 million to $800 million in three years and the Board of Supervisors already slashing health care programs, including the planned closure of one hospital and 11 clinics, the issue of how much politics gets played comes into question.

“The bottom line is that people are going to need health care in L.A. County before, during and after this (gubernatorial) election, and unless somebody tells me it’s got to be political which they haven’t we are going to work it out on the merits,” said Tom Scully, a Bush Administration official who as director of the federal Medicare and Medicaid programs plays a crucial role in deciding whether the county gets another bailout.

But others are not so sure. Unlike the past two times that Democratic stronghold L.A. County went hat-in-hand to Washington, a Republican president now sits in the White House. Moreover, occupying the state’s governor’s office is a Democrat who is up for reelection in November and likely has other political ambitions after that. Any federal help for Los Angeles could be perceived as a bailout for Davis.

“Is it better for L.A. to go under, or is it better to prop it up? That is not so clear to me,” said one politically connected health care analyst.

Clinton’s politics

Among the best evidence that the Bush administration’s decision will be political are the Clinton Administration prior decisions to grant successive billion-dollar waivers.

Waxman believes that Clinton was motivated by his “concern about poor people,” but he acknowledges the politics. “They wanted to help California, because they looked to California as an important state to Democrats,” he said.

Conversely, many believe that California is low on the White House radar screen after Bush performed so badly here in the last presidential election. And with Bill Simon’s gubernatorial bid imploding, that may not change anytime soon.

Already, Waxman says that the administration has made two health care policy decisions that have hurt the state: one was the refusal to halt planned reductions in Medicaid payments that go to hospitals serving the poor, and the other involved elimination of a program called the Upper Payment Limit that also is used to help pay for indigent medical care.

Not everyone believes such decisions were aimed at particular states, and may be more a reflection of Scully’s wider aims to establish his own imprint on national health care policy.

“He is definitely changing policy. Underlying it is the idea of limiting federal financial exposure,” said the health care analyst.

However, Steven Wallace, associate director of the UCLA Center for Health Policy Research, strongly believes that the administration is not above political games.

He pointed to the decision of Health and Human Services Secretary Tommy Thompson Scully’s boss to fly into California on a day’s notice earlier this year to announce that the administration had approved California’s request to expand the Healthy Families health care program to adults.

But with California’s huge budget deficit, Davis could not find the required state matching funds. “Nobody locally knew it was going to happen until 24 hours ahead,” Wallace said. “Then you saw Davis and the Legislature scramble to try and figure out how to fund it.”

Terrorism factors

There is one big political argument that both Democrats and Republicans believe may convince the feds to help out: the war against terrorism.

“Unless we have a trauma care system that is accessible to everyone in L.A. County we won’t have an adequate response capacity to a terrorist attack. And if we don’t have that capacity because the federal government has specifically under-funded California, that is not going to help Bush’s re-election,” said Rep. Jane Harman, D-Redondo Beach, whose district includes Harbor-UCLA Medical Center, which is slated for possible closure.

Scully says the federal government has an interest in seeing that Los Angeles County has a functioning public health system. That appears to be the view of the state’s congressional delegation.

Locally, Rep. David Dreier, R-Covina, one of the top-ranking GOP members of the House, plans to make securing another federal waiver a top priority.

Republican Supervisor Don Knabe, whose district also includes Harbor-UCLA, says that the bi-partisan support and the terrorism issue will make a difference with the administration. He thinks the tougher fight may be with other delegations seeking to protect their slice of the federal pie.

“They have needs of their own, and they are not sympathetic to the kinds of dollars we are talking about,” he said.

Added Waxman: “I think Scully has a very good reputation as a person who understands health care policies. But nobody has the last say in this Administration except people in the White House.”