An impasse in extending the five-year, nearly $1 billion federal bailout of the Los Angeles County Department of Health Services means cuts in outpatient healthcare services could take place as early as the end of this month, officials say.
Despite six months of negotiations, little progress has been made in discussions among officials from the California Department of Health Services, HCFA and Los Angeles County. The sides last met on March 30, with the bailout scheduled to end on June 30. No further talks are planned.
Officials close to the negotiations said talks have bogged down over who would finance an extension of the original five-year bailout, which was designed to cut the Los Angeles County Department of Health Services' expenses by greatly expanding its system of outpatient care.
HCFA has shelled out some $926 million since the bailout, known as a waiver, was originally granted in 1995. A waiver not only provides funds for
a financially strapped organization but also is supposed to restructure programs and goals.
HCFA wants the state of California to use part of the estimated $13 billion surplus it's accumulated during recent flush economic times to help fund as much as a five-year extension, but state officials are said to be reluctant to commit the money. Neither HCFA nor state officials returned phone calls seeking comment.
"The insistence of only talking about money has been a problem for us," said Mark Finucane, director of the Los Angeles County Department of Health Services. "The waiver has a lot to do with money, but there's been no talk about program goals."
Although the county's outpatient services have dramatically expanded since 1995, they still have fallen short of expectations.
Cost savings have totaled about $114 million, not the $294 million projected.
Inpatient beds have been cut 28%, compared with the 33% reduction promised. Outpatient visits have increased to 3 million from 2.2 million a year but remain 900,000 below annual projections.
Perhaps the most successful part of the restructuring has been the 170 public-private partnerships Los Angeles County has forged with private clinics and physicians.
The waiver provides $37 million a year toward these alliances, which account for more than 633,000 outpatient visits a year.
Without the funding, officials said, cutbacks would begin immediately.