Recommended Budget Volume One.book - Chief Executive Office ...

2011-12 Budget Message
DHS continues to implement its multi-faceted and multiphased
Financial Stabilization Plan, which includes system
efficiencies and revenue generating initiatives. The 2011-12
Recommended Budget includes an unspecified net cost
reduction of $312.7 million as a deficit reduction placeholder,
as the Department works with the Chief Executive Office (CEO)
on specific proposals to address the structural deficit in its
operating budget.
On November 2, 2010, the Centers for Medicare and Medicaid
Services (CMS) approved the California Section 1115 Medicaid
Demonstration (Waiver), entitled “California’s Bridge to
Reform,” for a five-year period starting November 1, 2010.
Many details of this Waiver still remain to be worked out,
including the allocation of funding to individual counties
across the State. The impact of the Waiver is not included in the
2011-12 Recommended Budget and will be addressed at a
later time once additional information is provided and the
analysis is completed.
As recommended, the 2011-12 Budget is fully funded with
available resources, and reflects the minimum amount of local
resources required by law ($124.2 million and Vehicle License
Fees (VLF)-Realignment revenue of $275.8 million), plus an
additional $307.2 million in County funding. The additional
County funding components include: $211.6 million from the
General Fund and $95.6 million in Tobacco Settlement funds;
partially offset by $21.7 million in County resources allocated
to the Department of Public Social Services (DPSS) for the In-
Home Supportive Services (IHSS) Provider Health Care Plan and
$14.7 million allocated to the Capital Projects/Refurbishments
Budget for health-related capital projects.
The Recommended Budget reflects $195.9 million in
Measure B Special Tax revenue, of which $194.1 million is
allocated for County hospital emergency and trauma care costs
at LAC+USC Medical Center (LAC+USC) and Harbor-UCLA
Medical Center (H-UCLA), and for County hospital emergency
care costs at Olive View-UCLA Medical Center (OV-UCLA), and
$1.8 million is allocated for services related to trauma centers
and emergency medical services in Health Services
Administration (HSA)-Emergency Medical Services.
The Recommended Budget reflects a net County cost (NCC)
decrease of $9.7 million. This consists primarily of a decrease of
$8.6 million, including the reversal of $6.7 million of one-time
Tobacco Settlement funds for PPP carryover claims from fiscal
year (FY) 2009-10; the reversal of $1.0 million of one-time
HEALTH SERVICES
Budget Summaries
funding for OV-UCLA’s tuberculosis (TB) unit operational costs;
the reduction of $0.8 million of one-time Tobacco Settlement
funds for LAC+USC transition capital projects; and the transfer
of one budgeted position to the Department of Public Health
(DPH) for $47,000; partially offset by an increase of $3.8 million
of Tobacco Settlement funds for the Managed Care Rate
Supplement (MCRS) intergovernmental transfer. The 2011-12
Recommended Budget also reflects an increase of NCC
transferred to the capital projects budget of $22,000 and an
increase to DPSS for the IHSS Provider Health Care Plan of
$5.0 million.
After accounting for revenue decreases related solely to
reversals of one-time funds from the 2010-11 Final Adopted
Budget, the Recommended Budget reflects a net increase of
approximately $4.7 million in revenues from ongoing sources,
primarily for increases in IHSS Provider Health Care Plan, MCRS,
Cost-Based Reimbursement Clinics (CBRC), mental health and
Realignment Sales Tax revenues, partially offset by reductions
in CHP equity distribution and Healthy Families Program
revenues.
The Recommended Budget provides funding for increased
operational costs, primarily due to the annualization of the net
cost of the OV-UCLA emergency room expansion and TB unit of
$4.4 million, increased debt service costs of $19.5 million,
increased medical malpractice and insurance costs of
$2.6 million, and increased services and supplies costs for a
Consumer Price Index (CPI) adjustment of $3.0 million.
The Department’s Enterprise Fund designation was used in
prior years to fund Departmental expenses; however, it was
depleted in FY 2010-11 and the Department is not currently
projecting a fund balance amount at the close of the fiscal year.
Therefore, there is no balance available to fund the 2011-12
Recommended Budget.
The Recommended Budget also includes a net decrease of
6.0 budgeted positions, primarily attributed to a net reduction
of vacant budgeted positions at LAC+USC (new budgeted
positions for emergency room services, offset by the deletion
of a greater number of vacant budgeted positions) and the
transfer of a budgeted position to the DPH; partially offset by
positions for the Department’s Quality Improvement Program;
the conversion of contract staff to County staff for the
Healthcare Interpreter Program; and positions for the
Department’s Radiology Picture Archive and Communications
System (PACS).
FY 2011-12 Recommended Budget Volume One 27.2 County of Los Angeles