MODESTO BEE
ORIGINAL ARTICLE

By TIM MORAN
BEE STAFF WRITER
Last Updated: June 30, 2006, 04:04:36 AM PDT

Stanislaus County's plan to bring its health care system into solvency needs a dose of reality, the county's civil grand jury said in a report released Thursday.

The grand jury criticized the county for setting a level of care higher than the amount of money it's willing to commit.

In this year's report, the panel suggests steps the county could take to bring service levels and financial commitments in line, from further consolidating the clinic system to committing more general fund money.

The county plan counts on future revenue sources that might not materialize, the grand jury report says, and the county needs to have a fall-back position.

The county has struggled with deficits in the Health Services Agency budget for several years, including an $8.7 million shortfall this year. After a series of meetings and public hearings over the past year, the county approved a plan to close one medical facility and cut back on the number of patients served at clinics in the system.

Stanislaus County Chief Executive Officer Rick Robinson called the grand jury report "misleading."

"I can't tell you how disappointed I am in this report," Robinson said. "It doesn't reflect the work we've done in the last year and a half. We've accomplished great things to this point, and will continue to do so."

Specifically the grand jury report recommends:

The county pay off a $23.7 million loan it made to itself to fund health care deficits from the past several years. The 18-year loan could be paid off with property tax revenues that now go into the general fund, the grand jury said.

Robinson said the property tax money identified by the grand jury is used for public safety, parks and other programs.

The county already has committed $3.75 million in annual general fund money for health care, Robinson said.

Future interest money, approximately $1.2 million to $2.1million earned from the tobacco tax bonds the county sold, should be dedicated to health care.

The county is using tobacco bond interest to make payments on the $23.7 million loan.

The county should study how to better use County Center II, the Scenic Drive medical complex in Modesto. The center is used for family practice, urgent care, specialty offices and the residency program. It houses administrative offices for the HSA and county Behavioral Health and Recovery Services, as well.

The grand jury suggests consolidating clinics into the Scenic Drive facility, which would save the lease payments now paid for clinic sites around the county.

Clinic system consolidated

The county recently went through an extensive hearing process to consolidate and reorganize the clinic system, Robinson said.

Bringing clinic services back to County Center II would defeat the county's commitment to putting health care services out in the communities where the need is the greatest, he said.

"We want to make it accessible to the people who need it," Robinson said. "Those people can least afford getting from one part of the county to another."

The county should continue to seek a change in federal health care reimbursement status and state legislation to increase Medi-Cal reimbursements. But neither is guaranteed, and contingency plans should be in place.

"We acknowledge that steps have to be taken if we are not successful in finding revenue sources," Robinson said. "The plan does address next steps. We are not going to give up on this."

Mary Ann Lee, interim managing director of the HSA, said some of the issues are interrelated. Keeping a high level of service with the community clinics increases the chance of getting the federal status change and more reimbursement, she said.

The county should look at administrative costs and HSA salaries and benefits, because they are above industry averages.

Lee said a public health clinic system can't be compared with private practice clinics.

The patient population is different, the county runs a physician residency program and the HSA work force is unionized, Lee said.

"We are in the process of evaluating our administrative costs, and looking at more efficiencies in delivering services," Robinson said. "The strategic plan is an alternative to shutting down the largest clinic system in the county."

Bee staff writer Tim Moran can be reached at 578-2349 or tmoran@modbee.com.