Down payments paid off: Medi-Cal expansion builds on Los Angeles’ legacy of safety net investment

By Zev Yaroslavsky and Louise McCarthy

Government is often criticized for its failures, but once in a while government has a profound success story. In January, California took the final step in expanding our Medi-Cal program to all income eligible residents, regardless of documentation status. As a result, Los Angeles County has sunset its public uninsured program, My Health LA, as its enrollees move to Medi-Cal. Thanks to decades-long efforts to stabilize and strengthen a once-crumbling safety net system, the Medi-Cal expansion offers Angelenos more than just a coverage card. It offers access to quality health care. As we celebrate this expansion of coverage it is important to recognize the investments that laid the foundation for this to happen.

Thirty years ago, our health system was on the edge of collapse and the county was on the brink of bankruptcy. In addition to the weight of an economic recession, our health system was financially burdened by a crisis of access and coverage. Over a third of Angelenos were indigent. County health facilities were overcrowded and largely focused on expensive inpatient hospital care, with a growing proportion of patients lacking insurance.

To avoid a total collapse, the county had to act fast. Initially, the county was forced to cut costs. At the same time, it proposed innovative policy and financing strategies to Sacramento and requested relief from the Federal government. In 1995, the county negotiated an agreement with the federal government that brought in $1 billion over the ensuing five years, with the promise that it would reorient its health services from inpatient to outpatient care in order to deliver cost savings to the health care system.

This reorganization of our health care delivery model set the stage for future gains. As part of the agreement, the county contracted with private nonprofit community health centers to provide a significant increase in primary care services to low-income uninsured residents. As a result, the county tripled the number of clinics serving the county’s rising uninsured population – from 39 to 170. The number of patients staying in hospitals decreased by 24%, and avoidable emergency room visits declined by 27%, resulting in significant cost savings and improved quality of care.

While these were great achievements, they weren’t enough. Los Angeles’s health system was still in the red. The Clinton administration extended the agreement, buying the County the time needed to balance its books. Coupled with a 1998 settlement of a lawsuit against major tobacco companies and a 2002 voter-approved parcel tax, the county health system books were finally balanced.

Ten years after the initial federal agreement, federal funds expired, but the Board of Supervisors continued investing its own resources in the safety net. As a result, not only were vital health services expanded, but so were critical facilities to improve access to care.

In 2008, the nation faced another, deeper, recession. Again, the county looked at closures and drastic cuts, threatening to nullify the gains it had made. Federal aid came again, this time in the form of the American Reinvestment and Recovery Act, which provided grants to build and improve sites, as well as to underwrite care for the uninsured.

Because of the county’s prior investments, both the public and private health care systems were shovel-ready to take advantage of another infusion of federal funding thanks to passage of the Affordable Care Act (ACA). Obama Care, as the ACA came to be known, made it possible for California to expand coverage through Medi-Cal.  Overnight, hundreds of thousands of residents received health insurance and now had a ready-made medical home in the safety net.

In the 1990s, we were just trying to keep the doors open and our heads above water. Little did we know that our efforts would lay the groundwork for what would become the foundation of major future expansions. Those county contracts with private clinics eventually became the My Health LA program, which sunset last month.

Since that initial investment in primary care, and in restructuring service delivery, Los Angeles has transformed its public and private safety net. Nonprofit clinics now serve 1.89 million Los Angeles residents each year at nearly 400 sites. Fewer than 750,000 Los Angeles residents lack health insurance, and that number will shrink even more with the Medi-Cal expansion.

While these achievements are impressive, more still needs to be done. Nearly 10% of Angelenos still report difficulty finding primary care, and that gap in our system must be closed. Health care should be a right, not a privilege. The long struggle to expand care proves that collaboration between Federal, State and County governments can yield consequential results. Our job won’t be finished until we provide coverage to everyone by building on the foundation we created over the last three decades.

Zev Yaroslavsky is director of the Los Angeles Initiative at the UCLA Luskin School of Public Affairs, and was an LA County Supervisor from 1994 to 2014. Louise McCarthy is president and chief executive officer of the Community Clinic Association of Los Angeles County.