Privatizing indigent health services in Los Angeles County: understanding the effects on community-based providers

Faced with imminent financial collapse of its public healthcare system, the Los Angeles County Department of Health Services solicited community-based providers to supply primary care health services to the medically indigent. This study highlights the effects that participation in the programme has had on these community providers. While strongly committed to the programme's objectives, community providers tended to overextend themselves financially, putting their organizations at substantial risk of failure should contractual expectations or patient demand forecasts not be met. Because of this risk, policymakers involved in public-private partnerships with community-based providers must exercise extreme caution owing to the unique status many of these providers hold as centrally positioned actors in their communities. On the positive side, we found evidence of increased levels of co-operation and innovation between community providers outside their formal roles in the county-sponsored public-private partnership programme.