98343LAC0018

SYN. NO. AGN. NO.

MOTION BY SUPERVISOR YVONNE BRATHWAITE BURKE DECEMBER 8, 1998

AMENDMENT TO ITEM #53

Today the Department of Health Servic-

es (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 implementa-

tion 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.

- M O R E -

YBB:CH:gl/re-engineering.mot

MOTION

Molina

Burke

Yaroslavsky

Antonovich

Knabe

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.

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

MOTION

Molina

Burke

Yaroslavsky

Antonovich

Knabe

aggressively to prevent any further shortfalls in the re-engi-

neering process.

- M O R E -

MOTION

Molina

Burke

Yaroslavsky

Antonovich

Knabe

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

2. The Director of Health

Services to personally meet with all

management to ensure implementation;

and

3. DHS and Auditor Control-

ler 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,

MOTION

Molina

Burke

Yaroslavsky

Antonovich

Knabe

1998 report prior to the implementa-

tion of additional major re-engineer-

ing ideas.

5. County Counsel shall

review the Consultant contract to

determine whether contractual obliga-

tions were fulfilled and provide its

analysis to the Board within two

weeks.

# # #

MOTION

Molina

Burke

Yaroslavsky

Antonovich

Knabe

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