Government Efficiency:
Los Angeles County Saved $218 Million by Focusing on Eliminating Waste and Inefficiency

Los Angeles County saved $218 million since early 2009 by focusing on eliminating waste and improving efficiency, according to county Chief Executive Officer William Fujioka. The changes included everything from buying better light bulbs and disconnecting unused phone lines to improving management of a county-run health program.

"These are hardcore savings, not make-believe savings," Mr. Fujioka said.

The largest savings – accounting for approximately $87.8 million per year – was achieved by standardizing the Los Angeles County Department of Health Services' drug formulary options and improving its management of inventory.

"DHS stopped the practice of letting every physician order whatever medication and equipment they wanted from wherever they wanted," Assistant CEO Martin Zimmerman said.

Doctors are being encouraged to use generic drugs to save money, and to order from the same formulary so the department can qualify for volume discounts.

Another major savings was achieved when the county Department of Public Social Services began encouraging indigent residents to collect benefits from the federal government instead of the county's welfare program. This will shift approximately $13 million in annual expenses from the county to the federal government. (Source: Inland Valley Daily Bulletin, January 16.)

January 20, 2012

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