Davis Asks Bush to Aid County Health System

Faced with a worsening state budget crisis, the Davis administration formally asked the federal government Wednesday to provide additional resources to stabilize Los Angeles County’s financially ailing public health system.

The request came in a formal application to the Bush administration for a waiver of federal Medicaid regulations to allow more creative use of federal funds to provide health care for the state’s poor. No dollar amount was put on the request, but state officials hoped that it could amount to more than $300 million over the next three years.

Gov. Gray Davis and top state health officials said the financial crisis that threatened to close two public hospitals and health clinics in Los Angeles cannot be solved without Washington’s help.

“We’re hopeful the federal government will respond positively to that request,” Davis said.

State and county officials hope to have face-to-face negotiations with their federal counterparts in Washington next month, but no meeting has been scheduled yet.

After dishing up pre-Thanksgiving meals for the poor on Los Angeles’ skid row, Davis told reporters that the state simply does not have any extra money to assist the county health system.

“The county knew full well that we did not have any extra money,” Davis said. “They did not ask us for extra money.”

Instead, Davis said, the state and county have adopted a joint approach, asking that the federal government approve the waiver so the state can use Medicaid funds more creatively.

Officials in Sacramento and Los Angeles are hopeful that the Bush administration will look favorably on the request because it incorporates elements suggested by Tom Scully, a top federal health official.

Scully, who heads the federal Medicaid program, toured the two full-service county hospitals threatened with closure -- Harbor-UCLA Medical Center near Torrance and Olive View-UCLA Medical Center in Sylmar -- the day after the Nov. 5 election.

Supervisors postponed until mid-January any move to close the two hospitals after voters this month overwhelmingly approved a property tax increase designed to keep the county’s trauma centers open.

Zev Yaroslavsky, chairman of the county Board of Supervisors, said the federal assistance would allow the county to keep its four major hospitals open, as well as maintaining a network of outpatient clinics and health centers.

“This is a very modest proposal. This proposal is not the silver bullet that is going to solve the county’s health-care crisis,” Yaroslavsky said.

But the federal help, combined with the $170 million a year the county will receive from the property tax increase, would avert draconian cuts in the health-care system.

The county health services director, Dr. Thomas Garthwaite, said during a telephone conference call with the governor and state officials that the federal assistance would stabilize the county health system for five years and avoid significant cuts in services.

It is now up to the federal government to act on the request.

A spokesman for Scully said the state’s proposal had not arrived and he would have no comment on the request until it had been analyzed fully.

Grantland Johnson, the governor’s secretary of health and human services, told reporters that the federal government needs to work as the senior partner with the state in providing the flexibility needed to use Medicaid funds.

“We simply can’t provide that kind of assistance to Los Angeles County and other counties,” Johnson said.

Under the complicated proposal submitted to Washington, the state is requesting federal approval to contract with select hospitals for services provided to poor patients covered by the Medicaid program, known in California as Medi-Cal.

If the request is granted, state officials believe, it will be possible for the county to receive $100 million a year for the next three years.

The state is also calling on Washington not to penalize counties for trying to move patients from expensive inpatient care at hospitals to less costly outpatient treatment at health centers and clinics.

The proposal would allow a county health system that treats a disproportionate share of poor people to maintain its current level of funding, even as its volume of hospital patients declines. The money saved on hospital care could be used to cover outpatient services.

Dr. Jack Lewin, chief executive officer of the California Medical Assn., praised the package being sent to Washington and said the trauma care crisis in Los Angeles is now on the governor’s radar screen.

But Supervisor Mike Antonovich was less charitable about the governor’s proposal.

“In the tradition of David Copperfield, the governor has performed a great illusion in advocating this health plan,” Antonovich said.

“This is a half-measure for the governor and it’s very disappointing,” he added.

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Times staff writer Daren Briscoe contributed to this report.