Maricopa County in Arizona will set aside more than $100 million to bail out the county's ailing health system.
Supervisors say they knew the health system's finances were in bad shape but never anticipated such gargantuan losses, projected by financial forecasters Wednesday to reach more than $50 million beyond previous projections.
The financial blow likely will delay other county projects indefinitely, including the installation of a new financial system and a $43 million administration building.
"The profitability of the plans going back two, three, four years ago wasn't as high as hospital administrators claimed it was," County Administrator David Smith said. "It was something we were suspicious of, but we never booked it until now."
Smith said that hospital administrators had not properly calculated enough expenses into their profit projections.
Also at the heart of the problem is the claims system combined with overly optimistic projections on health plans, officials said.
The county thought it had secured the system's financial future in November when voters agreed to raise property taxes by up to $40 million a year to subsidize the system through a special district.
Concerns about the system's cash position had surfaced long before ballots were printed. For years, the county has subsidized Maricopa Integrated Health System, which operates Maricopa Medical
Center in Phoenix, 11 clinics and several health plans.
To prepare for the worst, the county has increased hospital subsidies by $15 million and plans to set aside an additional $45 million to cover any other health-plan expenses.
Supervisors say they want a "clean handoff" when they turn the system over to new health care district board members who will be elected this November.
"We're committed to paying for the cleanup," Chief Financial Officer Tom Manos said. "We understand it's our responsibility to fix it, and we will."