Marchers Protest Cutbacks, Private Hospitals Offer Aid

As more than 1,000 demonstrators marched on the Los Angeles County Hall of Administration on Wednesday to protest proposed budget cuts, private hospital officials told the Board of Supervisors they will step in to help patients left in the cold by the drastic reductions expected in health services.

But even as the private hospital leaders stressed their willingness to accept the county’s poor and uninsured--if there is funding--they told supervisors that any substantive cuts in health services would be disastrous.

“There will be a meltdown,” warned Jim Lott of the Healthcare Assn. of Southern California, a consortium of area private hospitals. “Whether or not you have the money to pay for these patients, there is simply not the capacity to accept them. It is simply not there.”

As the supervisors struggle to close a $1.2-billion budget deficit--$655 million in health services--they met Wednesday in a special budget session full of sound and fury but little concrete action.

The sick and the disabled joined civic and labor leaders in a march for several blocks from the Ronald Reagan State Building to the Hall of Administration, where they noisily protested proposed cuts that the county’s top administrator says are needed to close the budget gap, including shuttering the vast County-USC Medical Center and eliminating 18,255 jobs.

In the midst of consternation in Los Angeles, however, there was good news from Wall Street.

The early morning sale of a much-needed $1.3-billion short-term note offering went better than expected in the financial marketplace, signaling Wall Street’s confidence in the county despite its budget problems. But a major credit-rating agency downgraded $215 million in longer-term bonds outstanding from the county, including those for the Disney Concert Hall parking facility. Fitch Investors Service, in downgrading the bonds from A+ to A-, said it was concerned about the county’s “severe financial strain.”

In other developments Wednesday:

* Supervisor Mike Antonovich, the ranking Republican on the board, sent a letter to Gov. Pete Wilson, saying it is crucial that he convene a special session of the Legislature as soon as possible to help the county deal with its budget problems. Noting that Wilson called such a session after Orange County plunged into bankruptcy, Antonovich said in a statement that a special session is the only way to get emergency laws passed before the traditional Jan. 1 date. Antonovich said the state should repeal state-imposed “unfunded mandates” that essentially force the county to pay hundreds of millions of dollars for health and welfare services that he says the state should fund. “Relieving Los Angeles County from [such mandates] would trim the budget shortfall approximately in half,” Antonovich wrote. Wilson had no immediate comment.

* Several supervisors announced their appointments to a special Health Crisis Task Force that they created Tuesday to begin looking at ways to restructure the beleaguered Health Services Department so its deficit can be closed without catastrophic consequences. The most well-known, perhaps, was Supervisor Zev Yaroslavsky’s nominee, former state Assemblyman Burt Margolin. Margolin helped craft some of the most important health legislation in recent years when he served as chairman of the Assembly Health Committee. “He is as smart as anybody I know on the subject,” Yaroslavsky said. “He has the ability to bring people of expertise together in a way that very few people can.” Supervisor Deane Dana announced his appointment of Dr. Thomas J. Collins, president of Long Beach Memorial Health Services.

A Private-Public Effort

One unintended result of the county’s budget predicament has been to give greater urgency to an effort already under way to draw large private urban hospitals into sharing the county’s health care load.

A coalition of 13 hospital administrators, representing some of the county’s largest private hospitals, attended Wednesday’s hearing and told the supervisors that they were ready to serve as an immediate safety valve as well as a long-term partner.

Among the hospitals represented at the hearing were Childrens Hospital Los Angeles, White Memorial Medical Center and Queen of Angels-Hollywood Presbyterian Hospital Medical Center.

Talks have been under way informally between county and private hospital administrators for at least a year, but picked up steam in recent weeks because of the urgency of the county’s budget problems.

The partnership would be modeled after a highly successful arrangement implemented several years ago when the county contracted with local hospitals for the delivery of babies after County-USC could not keep up with the demand for obstetrical services.

“We’re in the community, we are providing Medi-Cal, charity and indigent services now,” said Peter L. Coye, a consultant to a group of private urban hospitals that treat the poor. He said one benefit of the partnership would be to eliminate some overlap and fill empty beds in community hospitals. “We have a real commitment to the poor. We have the availability of the beds, and the willingness.”

The hospital administrators, who have long sought a contractual arrangement with the county, said the budget crisis presented an opportunity to finally do so. Some said that reaching an agreement with the county before any cuts take effect would soften the blow significantly.

“We want to work with the county to solve the problems,” said Terry A. Bonecutter, chief operating officer of Childrens Hospital Los Angeles, “and we can do it.”

Health Director Robert C. Gates said such an arrangement, while beneficial, would not be a panacea.

Gates noted that the Los Angeles County Medical Assn. commissioned a study that showed private hospitals in the Los Angeles area could absorb only so many critical emergency room visits. He said about 200,000 emergency room visits would be unaccounted for.

The lack of emergency room capacity “would still exist, even if we had the money to pay for services, which we do not,” Gates said. He also said private hospitals would not be able to take burn victims or AIDS patients if the county closed down its major burn and AIDS programs, as contemplated.

Previous talks have always ground to a halt over the issue of money and commitments to treat the uninsured poor, the 2.6 million residents of Los Angeles County who cannot afford private insurance and for one reason or another are ineligible for a government health insurance program, such as Medi-Cal.

As it stands, only about 2% of the patients treated by the private hospitals are truly indigent, compared to the 40% or more at some of the county’s public hospitals.

County officials, legally responsible to provide care to any patient who demands it, say the low percentage of uninsured patients treated by the private hospitals indicates a lack of commitment to treating those without money.

At least two board members expressed skepticism Wednesday about whether the hospitals will “step up to the plate” and take in the overload of indigent and uninsured patients.

Board Chairwoman Gloria Molina grilled hospital officials on the issue. “At what cost are you willing to take them?” she asked one, saying she was especially concerned about whether his hospital would take indigent patients that would not be eligible for Medi-Cal reimbursement from the state.

Molina said that if private hospitals are allowed to take “the cream” of the patients--those eligible for such reimbursement--it would only exacerbate the county’s problems.

Another skeptic was Yaroslavsky. “I want to believe they can handle some of the load, but I am skeptical about private hospitals’ willingness to handle the indigent patient load in this county,” he said. “They generally don’t want to take indigent patients, and I’d be pleasantly surprised if they suddenly changed their approach. But I think they deserve to be consulted.”

Good News From Wall Street

Exhausted after Tuesday’s full day of contentious budget deliberations, the supervisors started off Wednesday with some good news: Their note offering attracted a healthy $1.9 billion in bids from large and small investors, allaying county fears that few buyers would step up because of the county’s fiscal woes.

Treasurer Larry J. Monteilh said his nerves were calmed significantly by what he said was a strong showing of support in the financial community for Los Angeles County.

Molina was almost giddy: “You want me to do a little dance? If I could do a somersault for you, I probably would do it.

“We’re excited about it,” said Molina, who confirmed that she had to do some last-minute reassuring of bankers in a conference call Tuesday, “I told them to keep in mind that we have a good track record. Keep in mind . . . they’re not sure if we might just be a bunch of Orange County supervisors. And that makes them nervous.”

Because of the creation of the task force, Wednesday’s long-scheduled hearing on health cuts was expected to be a dry run for what supervisors will face when they finally get down to the business of slashing as early as mid-July.

Almost immediately, however, the reality of the budget crisis became apparent for the elected body, who first heard from health services officials, then private health care experts and finally the public.

As the board began its hearing, workers with placards, balloons and handmade noisemakers made their way into the auditorium, filling it to capacity and making enough noise to require repeated warnings for quiet. Many others marched through the halls until they reached the board’s executive offices, where sheriff’s deputies turned them away.

“This is wrong,” said Diane Dworzack, a nurse at High Desert Hospital in Lancaster, as she wheeled her 19-year-old quadriplegic son into the building on a gurney. If the hospital 60 miles north of Downtown Los Angeles is closed as planned by the Department of Health Services, “he’ll have nowhere to go,” she said. “He’s not the only one.”

Health Services Director Gates told the board that closing High Desert is “the least harmful and least damaging” option if cuts have to be made.

When it was his turn to address the board, AFL-CIO leader Jim Wood suggested that the budget process was a political game: He said officials had no intention of closing County-USC, but made the threat so that other severe cuts would be more palatable.

In addition to the usual union activists and the disabled who turn up each year for such budget deliberations, the severity of this year’s fiscal crisis has drawn the attention of a far broader contingent of observers, including civil rights leaders.

One, Joe Hicks of the Southern Christian Leadership Conference, said activist groups of all kinds throughout Southern California will rally against the cuts.

“We think they are obviously Draconian,” Hicks said. “We think there are bolder, more imaginative plans.”

Reed Emerges as Target

During Wednesday’s occasionally raucous meeting, it was clear that Chief Administrative Officer Sally Reed--author of the bleak budget proposal now before the supervisors--has emerged as a central target for public wrath about the cuts. Demonstrators carried placards and uttered slogans full of vitriol directed at her.

Said one, emblazoned in bold letters on the side of a truck: “Reed to L.A.’s Sick: Drop Dead!”

After the meeting, Reed responded to the rhetorical barrage leveled against her by union leaders, who charged that Reed’s proposed cuts were based on her personal agenda. “I do have an agenda of balancing this budget and getting us on a sound financial footing,” she said.

Reed said it was clear that the unions were attempting to drive a wedge between her and the Board of Supervisors, “believing apparently that if there was a different messenger there would be a different message.”

Times staff writers Jeffrey L. Rabin, Jeff Leeds and Tom Petruno contributed to this story.