County health budget in crisis

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San Gabriel Valley Tribune (California)

Los Angeles County’s struggling health department — a $1.4 billion deficit looming in just four years — proposed a detailed cost-cutting plan Wednesday designed to squeeze the shortfall to $555 million by 2009-10.

The plan includes standardizing medical procedures so they 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 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 said that, unlike previous proposals, this plan doesn’t propose closing hospitals and clinics and instead relies on innovative cost-savings that are expected to have little impact on patient care.

Yaroslavsky also noted that 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,” Yaroslavsky said.

Yaroslavsky noted the plan, developed by acting health department Director and Chief Medical Officer Bruce Chernof, strategically emphasizes efficiencies.

“There is no reason why one hospital should cost us 20 percent more per patient than another hospital,” Yaroslavsky said.

“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 drugs are equally beneficial.
Contact the author at: [email protected] or (213) 974-8985

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