- The Washington Times - Monday, March 24, 2003

LOS ANGELES Los Angeles County's sprawling public health care system is on the edge of collapse, and officials say there is little they can do without a massive infusion of federal money.
"We're taking steps to stabilize the system," said County Supervisor Zev Yaroslavsky, a leading player in the efforts to keep the system alive. "It may be at the expense of the taxpayers, in part, and it will be at the expense of the services to the clientele, in part, but we're trying to stabilize the system."
The county's Department of Health Services says it will be at least $700 million in the red by 2005, but existing federal programs and grants will cover only about half of that. County voters passed a $160 million property tax for health services in the fall, but only part of that will go to keep the public hospitals functioning.
As a result, the county is pushing a package of painful cuts to the $3 billion department, including closing a nationally respected rehabilitation hospital and shutting down some public health clinics.
Those proposed cuts have led to an uproar, including a series of lawsuits challenging the closure of the rehabilitation hospital, known as Rancho Los Amigos. Even with those cuts and the new local and federal funding, the department says, the system could find itself broke once again in a few years.
Recent cuts "will bring us stability for two to three years if the department goes through with these cuts, which we are," county health department spokesman John Wallace said. "It's just that they're painful and tough reductions."
California law strictly limits property-tax increases, so local legislators have proposed various other solutions, including an increase in the liquor tax. So far, however, it is not clear whether state officials and county residents will accept it.
The health care problem stems largely from a simple demographic fact: About 25 percent of the county's 10 million residents have no health insurance. The cost of treating those people falls on the county's network of six hospitals, three trauma centers and community clinics.
Neither the state nor federal government pay for that care for the uninsured, leaving it largely up to county taxpayers.
"In the long term, the United States of America is going to have to come to grips with the concept of health care as a right, not a privilege," Mr. Yaroslavsky said.
Rep. David Dreier, California Republican and head of the state's congressional delegation, recently helped cobble together a package of federal money, worth more than $200 million, to keep the hospitals open for now. That money will run out in about two years.
This is the third time federal officials have had to step in with money for the county health system in the past five years. The first two times cost taxpayers more than $1 billion.
This time, all sides seem to agree that the system must undergo a serious "structural reformfl" to forestall the need for a fourth major bailout.
But that's where things get complicated.
County and state officials want the federal government to foot the bill in the long term, either through direct subsidies or by creating a universal insurance system. Neither seems likely. The first possibility is becoming dimmer as the federal government slides into deficits.
The second is a near impossibility politically because federal lawmakers of both parties remember the disastrous health care reform proposal from President Clinton, which was widely credited with bringing Republicans control of Congress in 1994.
Federal officials, meanwhile, complain that California sets its reimbursement rate for federal programs such as Medicare too low. Raising that state rate would immediately bring in extra federal money, because Washington matches the state contribution.
But beyond all that lies an even touchier issue, one that officials don't like to even discuss the role of immigrants in the county's crisis. Although no one is sure how many of the uninsured are recent immigrants, everyone says many are. Some of those are illegal.
In Los Angeles, which has a large Hispanic population, talk of restricting services to illegal immigrants is political poison. In Washington, such a discussion runs afoul of the Bush administration's efforts to make peace with Hispanic voters.
"It's something we're not playing up," one participant in the talks about the future of the system said. "It doesn't play well."

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