LOS ANGELES (AP) -- Los Angeles County's health-care system, which received a $1 billion federal bailout five years ago, is facing another financial crisis.
The nation's second-largest public health system, which treats nearly 3 million uninsured patients a year, has fallen short of cost-saving restructuring goals set when it received a bailout in 1995 in the form of a federal Medicaid rules waiver.The waiver expires June 30. The county is seeking its renewal, as well as state funding, but talks are at an impasse.
The Los Angeles County Board of Supervisors was scheduled to consider a freeze today on new hiring for the Department of Health Services. It already voted to freeze payments to 137 private health clinics that contract with the county if the waiver expires.
"We have met certain goals, but it's an entrenched old system that won't turn around on a dime," Supervisor Zev Yaroslavsky said last week. "I don't think we've done enough."
Last week, Sens. Barbara Boxer and Dianne Feinstein sent a letter to U.S. Department of Health and Human Services Secretary Donna Shalala. They argued that the waiver is critical to "avoid service reductions and layoffs ranging from 1,500 to 4,000 health-care providers."
The county promised to revamp its health system in 1995 when it was facing a $655 million budget shortfall. It got the federal bailout after promising to concentrate on outpatient clinics instead of costly hospitalization of patients.
The county laid off 2,500 health-care workers and privatized dozens of clinics. Its goal was to reduce the number of county hospital beds by a third and expand clinics to handle nearly 4 million visits per year by 2000.
To date, however, there has been only a 28 percent drop in hospital beds, outpatient visits are 900,000 short of the goal and the county is $100 million short of its target of shaving $294 million from the health-care budget.
Meanwhile, the California Healthcare Association has estimated that it will cost the state $10 billion to make hospitals withstand earthquake safety requirements taking effect in 2008.
More than 2,600 buildings at 473 hospitals must be checked and possibly renovated under the 1994 Hospitals Facilities Seismic Safety Act. The state law was passed after the 1994 Northridge earthquake, which forced three damaged hospitals to close and temporarily halted services elsewhere.
The trade group for hospitals estimated that meeting another deadline in 2030 could cost an additional $14 billion. The later deadline requires that hospital facilities not merely withstand an earthquake but remain able to care for patients.
"The cost of repair exceeds the value of all existing state hospitals," said C. Duane Dauner, head of the trade group.