Focus of L.A. County proposal on standardizing care
The Daily News of Los Angeles
Los Angeles County’s struggling health department — a $1.4 billion deficit looming in just four years — released a detailed cost-cutting plan Wednesday designed to squeeze the shortfall to $555 million by 2009-10.
The plan includes standardizing care so medical procedures cost the same at each of the five public hospitals and reducing hospitalizations by 10 percent.
It also calls for closing the Department of Health Services’ $300 million annual shortfall, which first appears July 1, with an infusion of general fund money; revenue from a proposed tobacco tax measure on the November ballot for health-related programs; and $47 million from an increase in Medi-Cal managed care rates.
Still, some of the plan’s proposals drew questions about the potential impact on patient care.
“The pressure to squeeze out $300 million (annually) in savings could pinch patients unless the county proceeds with extreme caution,” said Jerry Flanagan, health care policy director at The Foundation for Taxpayer & Consumer Rights in Santa Monica.
“Cutting services in the name of ‘cost savings’ can end up costing the county much more in the long run. Instead of making health care affordable, these plans could stop early diagnosis of disease — when sickness is cheaper to treat and good outcomes are more likely.”
County Supervisor Zev Yaroslavsky pointed out that, unlike previous proposals, this plan doesn’t propose closing hospitals or clinics. He said it relies instead on innovative cost savings that would have little impact on patient care.
Yaroslavsky said the department’s $300 million annual shortfall is nearly two-thirds less than the $700 million deficit the department faced in 1995.
“That not only threatened to collapse the health system, but threatened to take the entire county government into bankruptcy,” he said. “We’re far better off than we were 11 years ago, but we’re not out of the woods yet.”
Yaroslavsky noted the plan, developed by Dr. Bruce Chernof, acting health department director and chief medical officer, strategically emphasizes efficiencies.
“There is no reason why one hospital should cost us 20 percent more per patient than another hospital,” Yaroslavsky said. “We have five hospitals and five CEOs and they run them almost like fiefdoms.
“We need to create one system with five hospitals, just like the Los Angeles Police Department has 18 divisions but it’s one department.
“It doesn’t cost twice as much to arrest a burglar in the Devonshire Division than it does the Foothill Division. That needs to be addressed.”
The plan also calls for reducing reliance on temporary registry nurses by hiring more permanent nurses; reducing drug costs by eliminating some and designating others as preferred; and prescribing the least expensive drugs when two or more are equally beneficial.
“Like public safety-net systems across the nation, DHS has faced a series of budget crises over the last two decades or more,” Chernof wrote.
“Because of the chronic budget shortfalls facing the health system over this period, it appears to some observers that DHS has limped from crisis to crisis.
“However, during this time DHS has implemented significant reforms and restructured its care delivery system.”
