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High-Level Care, Uninsured Patients Make a Costly Mix : Medicine: Defenders say county offers services at a competitive expense. But critics see many inefficiencies.

CODE BLUE. The Crisis in Los Angeles County Health Care . One in a series


For more than a month, the 11-year-old boy sat within easy reach of his respirator in the pediatric intensive care unit at Los Angeles County-USC Medical Center--the nation's largest hospital complex.

He is no stranger here. Rafael Guerrero was born prematurely in the same building and was rushed immediately to intensive care. He has "prune belly syndrome"--a lack of abdominal muscles that has left him with a host of serious medical problems involving his lungs, intestines and bladder.

Before his current stay he had rung up 540 days in intensive care in his young life--and medical bills that hospital officials say easily exceed $1 million. Back for corrective surgery in mid-September, he suffered kidney failure and has required around-the-clock nursing and monitoring. At $4,869 a day, that is more than $180,153 in additional charges.

This bright but sickly little boy--who speaks only in sign language--unwillingly represents American medicine at its most costly. He also represents one of the county's most nettlesome problems in controlling costs.

Officials say there is an abundance of such patients at the six county-run hospitals, facilities that offer a variety of high-level care available at only a few private hospitals.

In addition, few patients in the county system have private insurance--the kind that would cover most of the bills for a complicated delivery, emergency surgery or intensive care. And the fees paid by government programs--Medi-Cal and California Children's Services in Rafael's case--do not necessarily cover the costs.

Even more telling, fully a third of the 126,000 patients discharged from county hospitals last year had no health coverage at all. This is the heart of the problem facing the beleaguered government system: how to pick up the costs of the 42,000 indigents who were hospitalized last year and who cannot be expected to pay a dime.

The uninsured are "at the core of the Los Angeles County health crisis," said the county's "health czar," former Assemblyman Burt Margolin. "We would not face the meltdown of the system if we as a society had developed a solution to the larger problem of having a significant population without access to health insurance."

On top of a multitude of largely hidden costs, critics complain of inefficiencies in the county's health care delivery system. They say:

* The bureaucracy is top-heavy.

* Overly generous salary increases have been given.

* There are unexplained differences in costs among county-run clinics and hospitals.

* Record-keeping problems too often require repetition of expensive medical tests.

* The antiquated billing system cannot track the costs for an individual patient.

But it is the county's burden to provide care, whatever the cost, to whoever needs it. And patients such as Rafael Guerrero, with high-cost, life-threatening disorders, are expensive to care for.

County officials assert that the system provides medical care at a competitive cost. Executive and physician pay is generally lower than in the world of private health care. The hospitals rely heavily on residents--physicians in their final years of training who are paid a fraction of a full physician's salary. Buildings are older and in some cases in dire need of replacement. The problem is a lack of dollars coming in, not a sudden hemorrhaging of dollars spilling out, the officials say.

"The public needs to understand . . . that this department is not a bureaucratic bunch of buffoons," said Don Petite, chief financial officer for the county's Department of Health Services. "We are competitive and we have kept costs down over the years, but the revenues are not there. . . . And any time we try to curtail services we're prevented from reducing services by the courts."

Petite and other county health care executives point to statistics showing that the average cost per hospital day for a county patient is well below that of comparable hospitals in the state. Yet several of the hospitals used in the comparison listed, such as White Memorial and Brotman medical centers, had significantly lower costs than the county.

Still, the county hospitals' average cost for the 1994 fiscal year was $1,259 a day compared to $1,224 for all hospitals in the state.

However, analysts--inside and outside the county health bureaucracy--warn that those numbers may be misleading. Computing the cost of care--and the efficiency or wastefulness of a hospital or clinic--is a complicated business. Comparing hospitals of different size and specializing in different sorts of care is even trickier.

"Average cost per day doesn't take into account the mix of patients," said Gerald Kominski, associate director of the UCLA Center for Health Policy Research.

David Langness, vice president for communications of the Healthcare Assn. of Southern California, calls it "one of the worst measures of hospital costs."

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