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In the Fall of 2002, the Los Angeles County health system faced a $750 million budget deficit. By December 2002, the county had closed 16 health centers and made cutbacks at dozens of private clinics. The closings met with much disapproval from the community and the threat of further closings put both legislators and community members on alert. Governor Gray Davis joined the County in requesting a $1.4 million bailout from the federal government.
In the Fall of 2002, the Los Angeles County health system - the United State's second largest public health system - faced a $750 million budget deficit (by 2005) that led to the immediate closure of several emergency and trauma facilities and the threat of closure for others. Rising health care costs, decreased tax revenues, increases in the number of uninsured and state budget cuts all contributed to the county's budget deficit. By December 2002, the county had closed 16 health centers and made cutbacks at dozens of private clinics.
BackgroundThe Countywide system of trauma centers refers to that system coordinated by the department of health services, consisting of both public and privately operated resources, that seek to build and sustain a Countywide system of pre-hospital and hospital trauma care including care provided in, or en route to, from, or between acute care hospitals, trauma centers, or other health care facilities.
The term trauma center refers to a hospital that maintains specialized equipment and a panel of physician specialists, including a trauma surgeon available 24 hours a day, 7 days a week to treat trauma patients.
Emergency medical services refers to pre-hospital and hospital critical and urgent emergency care, including care provided in, or en route to, from or between acute care hospitals or other health care facilities.
LA County's trauma network now has 13 hospitals, compared with 22 in 1985.
ResponseThe closings met with much disapproval from the community and the threat of further closings put both legislators and community members on alert. Governor Gray Davis joined the County in requesting a $1.4 million bailout from the federal government.
Note: the request for a bailout is not new, since 1995, Los Angeles County has received $2.2 billion in Medicaid rule waivers - waivers that would allow the county to receive increased federal funding from the federal government. According to the Centers for Medicare and Medicaid Services website, a "Medicaid waiver is when the Federal Government allows or grants States permission to waive certain Federal requirements in order to operate a specific kind of program. They are often used to authorize managed care, or alternative delivery or reimbursement systems. In general, Federal law allows States to enact three types of Medicaid waivers: program waivers, research and demonstration waivers and health insurance flexibility and accountability waivers."
In November, when a bailout from the federal government looked unlikely, LA County residents passed Measure B, an initiative to raise funds from property taxes to save two full-service hospitals - Harbor-UCLA and Olive View-UCLA - from closure. With a 73.2% affirmative vote, Measure B earned more support than any other initiative or candidate on the ballot in the county. The measure will generate $168 million annually to help bolster the public health system. The measure was initially put on the ballot in July 2002 by supervisors who saw the budget problems.
While Measure B is expected to generate an additional $168 million annually, the county still has a deficit that threatens care. The county and state began looking for creative ways to keep the system running. In late November, the Governor and county submitted a proposal to the federal government. The proposal outlined an approach for preserving emergency and inpatient services at two major hospitals and stabilizing Los Angeles County's health system for 5 years. Specifically, California asked the federal government to ease regulations that penalize hospitals for using less expensive outpatient care and to renew the federal waiver for the state's Selective Provider Contracting Program that lets hospitals bid for the state's inpatient Medi-Cal (California's version of Medicaid) business.
In January 2003, Governor Davis released his budget proposal that, if passed, would represent a $719 million loss for Los Angeles County. This reduction further put in jeopardy the troubled health system.
In February 2003, the federal government reached an agreement with the state and pledged to help bailout the health system with an infusion of $250 million (far less than the $1.4 billion requested in the Fall of 2002).
Private Hospitals Also AffectedThe closing of public services affects private services too. Private hospitals are voicing their concerns about the closing of emergency and trauma services pointing out that they are already near capacity and would likely be pushed beyond with more closings. They also report that emergency departments are already overloaded with waiting times of up to 8 hours and some documented emergency waiting room deaths.
Safety Net HospitalsThe closings of "safety net" hospitals - public and private hospitals that provide care to indigent and Medi-Cal patients - can be a cause of increased emergency room utilization and generally longer wait times even for people with insurance.
Closings May Signal Problems for Other StatesAccording to some reports, the problems the Los Angeles County health system is immersed in may be a signal of what is to come for other large health systems. The county is still in financial trouble and looking for ways to provide the needed care.
Sequence of Events in the Closing of ER and Trauma Services in LA CountyFollowing is a time-line describing the sequence of events:
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The closing of emergency and trauma services was an emergency response, not a part of a strategic plan. The county and state governments had to find ways to get additional funds to cover the large
budget shortfall and permit them to keep some facilities open. The government bodies sought assistance from both the community in the form of increased property taxes and from the federal government
in the form of renewed Medicaid waivers and some loosening of regulations (both described in question 3).
There had been signals of the impending problems- conversion of non-profit hospitals to for profit hospitals and the eroding of safety net hospitals helped contribute to the problem LA County now faces.
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The closing of emergency and trauma services was proposed by Los Angeles County officials in response to the budget shortfall. These officials were most likely not eager to close the facilities -
especially when the closings elicited complaints from the community - but they felt they had no other options because of the county's severe budget shortfall.
While they were responsible for closing the facilities, these officials were also responsible for proposing potential solutions that could help make up for the budget shortfall and prevent further closings. They put Measure B on the ballot and worked with the Governor to request funds from the federal government.
Los Angeles County is the second largest health system in the country and, as such, many people are affected by the emergency and trauma service closings. Following is a brief overview of the major stakeholders affected:
In general all stakeholders oppose the closing of the health services. While the elected and appointed health officials were responsible for the decisions they felt they had no other
Future efforts to prevent the LA County health system from further closings and/or collapse will likely be spearheaded by the health officials under the watchful eye of the other stakeholders.
The closing of emergency and trauma services in LA County is likely to be a part of public discussion for the next couple of years and some believe it is a problem that could afflict other health systems (especially if the budget deficits continue). Therefore, it is likely that other states are paying close attention to what has happened in Los Angeles (including the federal funds they received).
The closing of some emergency and trauma services in Los Angeles County does help ameliorate the budget deficit the county faces, but it jeopardizes the health of the community's residents.
Therefore, it is likely that the quality of care will decrease, there will be increases in inequity (more and more uninsured with fewer and fewer public services available) and costs will continue to rise.