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County on Brink of Big Changes in Health System


Until now, the promise of restructuring Los Angeles County's vast public health system has been just that--a promise.

But almost a year after the nation's second-largest public health system was rescued from collapse by a massive federal bailout, the first serious steps are in the making to transform the expensive hospital-heavy system into one that emphasizes less costly primary and preventive care at community clinics.

By the end of this year, county health officials hope to more than double the number of outpatient clinics in the community from the present 39 to 83, including four in the San Fernando and Antelope valleys, through the most extensive use of partnerships with private medical groups in the county's history. It is a dramatic departure from the traditionally separate public and private health care systems in the county.

"This is the way we should have been providing health care historically," said Health Services Director Mark Finucane.

"This will avoid hospitalization. This will bring patients and their families closer to [clinics] where they live when they need care," he said. "It is the essence of the way a health care system ought to be redirected, further and further away from institutions and out into the community."

The move to expand the network of outpatient clinics, the hours they are open and the patients they see is in stark contrast to the county's plans to simultaneously shrink its huge hospital system.

At a daylong hearing Monday, the Board of Supervisors is expected to hear an earful of opposition to plans to seek a private operator for Rancho Los Amigos Medical Center, the county's nationally renowned rehabilitation hospital in Downey, and to reduce medical staff at County-USC Medical Center in Boyle Heights and Olive View/UCLA Medical Center in Sylmar because the number of patients is dropping. The drop is occurring partly because of increased competition among public and private hospitals for Medi-Cal patients.

While county government and its health department in particular have long been known for bureaucratic sluggishness, the clinic expansion appears to be on an unusually fast track.

County health officials have contracts drafted, payment schedules negotiated and tentative hours of operation established, and have developed projections of the number of patients they expect to be served at each location.


At the same time, in the hospital system the jobs of more than 1,000 county health workers and the ability of thousands of patients to obtain outpatient services at Rancho Los Amigos are at stake. The county is negotiating with three private medical groups to take over operation of the hospital.

Finucane acknowledged, "This is going to be a painful process." But he said that in the long run, changing the health system is in the best interests of the patients and the community.

Finucane said he is attempting to find solutions that will preserve some outpatient services at Rancho and minimize the impact of the cuts there on the rest of the health system.

"We're at a crossroads," he said. "It's like coming off of one road and going on another. It's going to be hard for people. . . . In the long term, when we finish this, we will be better off."

The expansion of outpatient clinics and contraction of hospital services is precisely what the county promised it would do in order to win the $364-million financial bailout announced by President Clinton last September in Santa Monica.

Since then, the federal government has committed an additional $172 million to help stabilize and remake the county's public health system, which serves the biggest proportion of poor and uninsured residents of any major metropolitan area in the nation.

To obtain a waiver of federal Medicaid regulations and shift federal dollars from hospital care to outpatient services, the county pledged to essentially remake its health system in five years.

After protracted negotiations over how this would be accomplished, the county agreed last spring to reduce the number of hospital beds by at least one-third and increase outpatient visits by 50% by June 2000.

Finucane called the blueprint for expanding outpatient clinics "a significant down payment" on the county's commitment to restructure its health system.

"It's not just that we are expanding services . . . it is the manner in which we are expanding services," he said.

After meeting with Finucane last week in Washington, Bruce Vladeck, administrator of the federal Health Care Financing Administration, praised the clinic expansion plan, calling it "quite a positive development."

Vladeck, who oversees the federal funding that is vital to the county's restructuring effort, said Finucane and his staff are clearly doing a lot of work and making a lot of progress.

"They still have a very long way to go," he said. "It is a very big job. It is an enormously difficult task."

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