SYN. NO. AGN. NO.
MOTION BY SUPERVISOR YVONNE BRATHWAITE BURKE DECEMBER 8, 1998

Today the Department of Health Services (DHS), the Chief Administrative Office (CAO) and the Auditor Controller updated the Board on re-engineering the Countys public health system and the numerous problems facing DHSs implementation of the re-engineering project.
Several weeks ago, I introduced a motion requiring the Chief Administrative Officer, Auditor Controller and the Department of Health Services to review the re-engineering project with APM/Arthur Anderson. This review examined the re-engineering project and its methodologies and the likelihood of achieving $247 million in savings.
The Auditor previously advised that the original re-engineering targets were too aggressive. Of significant concern is the appropriateness of benchmarking the County by using the top quarter of the industries best practices. DHS indicated that the benchmarking failed to recognize the operational requirements associated with Los Angeles Countys large, public health care system.

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It appears the consultants estimated cost savings of $247 million is inaccurate. The likely cost savings, in a best case scenario, will be only $82.4 million, a difference of $164 million. This gross error will have profound impact on DHS since it relied on the $164 million to balance the structural deficit projected to exist at the conclusion of the 1115 Waiver.
This year, DHS will incur a budgetary short fall of $52.2 million for FY 98-99. This short fall will result in the use of DHS operating surplus funds, previously earmarked to help alleviate the structural deficit.
It is imperative that DHS maximize the achievement of the verified re-engineering savings and move aggressively to prevent any further shortfalls in the re-engineering process.
I, THEREFORE MOVE that the Board instruct:
1. The Director of Health Services to expeditiously implement the recommendations contained in the November 10, 1998, CAO and Auditor Controllers report; and

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2. The Director of Health Services to personally meet with all management to ensure implementation; and
3. DHS and Auditor Controller shall provide the Board with quarterly reports by facility on implementation and realization of savings; and
4. The Auditor Controller to review DHS estimated savings for major ideas that exceed the Category 1 savings identified in the November 10, 1998 report prior to the implementation of additional major re-engineering ideas.
5. County Counsel shall review the Consultant contract to determine whether contractual obligations were fulfilled and provide its analysis to the Board within two weeks.

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