HHS Secretary Donna Shalala has approved California's Medicaid Demonstration Project for Los Angeles County.
Approval of the five-year project comes with an initial $364 million bailout of the county's bankrupt healthcare system. The funds, originally promised by President Clinton in a visit to Los Angeles last fall, are intended to help with long-term restructuring into primary and outpatient-focused care.
So far, private operators have taken over six public clinics, and the county is moving ahead with plans to privatize 20 more. About 3,500 positions have been cut, and 2,400 healthcare workers were laid off.
Officials have pledged to carry out a plan to eliminate 1,719 inpatient beds-one-third of the county's inpatient capacity-and increase ambulatory services by 50%.