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Trauma Tax Falls Short

August 27, 2004

How seriously do Los Angeles County voters take the financial crisis threatening hospital emergency rooms? Seriously enough that two years ago they surprised everyone by approving a rare property tax hike. The so-called trauma tax raises about $170 million a year, enough to keep open a network of three public and 10 private trauma centers that treat the most serious cases, as well as two county hospitals.

What the trauma tax hasn't been able to do is rescue the rest of the emergency system. That became evident last week when a private hospital in East Los Angeles went bankrupt and abruptly shut down, while another in the San Fernando Valley announced plans to close at the end of the year. Since voters approved the tax hike in November 2002, four additional private hospitals have either closed entirely or shut their emergency rooms, leaving about 75,000 patients a year to seek help at other already strained emergency departments and threatening to set off a chain reaction of closures.

"This is a $170-million answer to a $700-million problem," Dr. Brian Johnston, a veteran emergency-room physician at White Memorial Medical Center, said when the trauma tax went on the ballot two years ago. "I support it, but it needs to be the leading edge of a much larger salvage effort."

Los Angeles County is still waiting for the larger effort.

It's not alone. Hospitals and emergency rooms are closing across the country, plagued by a cascade of crises that include a severe nursing shortage, escalating costs for new therapies and shrinking reimbursement from managed-care organizations and federal programs. But the crisis that dwarfs all others is the huge number of people with no medical insurance. Charged by federal law to treat everyone regardless of their ability to pay, emergency departments have become de facto providers of universal care. When the costs drive hospitals out of business, it becomes everyone's problem. Having insurance won't help you one bit if the surviving ERs are filled up when you need one.

Los Angeles County is the epicenter of the uninsured crisis; 2 million residents lack medical insurance, public or private. Congress last year finally promised to cover at least some of the costs of treating illegal immigrants. But more than two-thirds of those who show up in emergency rooms without insurance are U.S. citizens and legal residents who, like their undocumented counterparts, work at low-paying jobs or small companies that don't offer insurance.

Gov. Arnold Schwarzenegger's pledge to cut $400 million from Medi-Cal, the state's insurance program for the poor, could make matters worse. Because each state dollar draws a federal match, the cuts would total $800 million -- and leave even more Californians uninsured and dependent on emergency rooms as their last resort. The good news is that the governor has postponed the Medi-Cal restructuring, which means he has not yet settled for an easy smoke-and-mirrors fix.

The test will be whether he's willing to use his immense popularity to work with state legislators and the federal government to forge a tough but true solution, one that would increase the rolls of the insured, and by doing so preserve the emergency system for all.

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