Los Angeles County’s hospital and clinics system is forecast to face growing operating losses that outpace various subsidies, forcing a dramatic draw down on reserves to cover expenses over the next three years, according to a report presented Tuesday to the Board of Supervisors.

The board voted to “receive and file” the written report from Department of Health Services Dr. Christina Ghaly without comment.

The report relies on several assumptions about the department’s complex federal and state funding streams and reflects the expiration of a number of federal waivers that currently provide support for county services.

Ghaly states in a letter to the board that the assumptions reflect the “most likely” outcomes, before going on to forecast three years of shortfalls that will drop a surplus funds balance from roughly $1.1 billion as of this coming June 30 to less than $300 million by June 30, 2022.

The department will continue to work with state health officials on programs to offset the losses, according to the letter. DHS is also hoping to increase revenues from managed care patients who use emergency rooms and inpatient services and better manage the cost of care for Medi-Cal patients assigned to DHS.

“Work on various other internal initiatives aimed at enhancing cost effectiveness, strengthening core clinical services, and supporting our role as a safety net provider for the residents of Los Angeles County is ongoing,” according to the letter.

As operating costs rise, the redesign of Harbor-UCLA Medical Center will also add more than $110 million in debt service payments by June 30, 2023, more than doubling the department’s annual debt costs.

Additional comment was not immediately available from county spokespeople.

Health costs — which includes the departments of Mental Health and Public Health — make up nearly one-third of the county’s $32.5 billion proposed budget.

DHS is the second largest municipal health system in the nation, with four major hospitals and a network of community-based clinics serving more than 600,000 patients annually.

Leave a comment

Your email address will not be published.