Amidst mounting political pressure and concern for patient safety, Orange County supervisors Tuesday effectively curbed the power and influence of Supervisor Janet Nguyen over CalOptima, the county’s managed health care plan for nearly 500,000 poor and elderly patients.
Going forward, Supervisor Todd Spitzer will likely be one of two supervisors on the CalOptima board, a change that supervisors are expected to formally approve next week.
Yet there are already indications that county supervisors may have already put the $1.5-billion health care authority on a crash course for dismantling after two years of executive turmoil following Nguyen’s dominance of the board of directors.
The underlying concern revolves around Nguyen’s efforts in 2011 to raise nearly $100,000 in medical industry campaign contributions while hospital lobbyists helped her to rewrite CalOptima’s governing ordinance, a move that ultimately enhanced the industry’s position on the board of directors.
Those changes came at the same time a slew of top executives left the agency amidst toxic relations with agency attorneys and just as compliance issues were becoming more complicated.
“No doubt there’s been turmoil at CalOptima,” said visibly frustrated Supervisor John Moorlach on Tuesday, lamenting the results of an internal legal investigation published by Voice of OC last month and withheld from Moorlach by CalOptima officials for two years.
Supervisors’ Chairman Shawn Nelson scheduled Tuesday’s discussion of CalOptima’s governing ordinance after a scathing federal audit delivered last month that criticized CalOptima, the health care agency, for jeopardizing medical care for more than 16,000 seniors.
Nelson promised a strong review.
Yet Tuesday’s rebuke of Nguyen carried a velvet touch.
In the background is the looming presence of the 34th State Senate District election, one of California’s hottest races, which pits Nguyen against former Democratic Assemblyman Jose Solorio.
On Tuesday, those battle lines were on clear display.
Local Democrats came out in force with Democratic Party Chairman Henry Vandermeir issuing a public statement criticizing county officials for keeping Nugyen on the board after so much controversy over her reshaping of the CalOptima board.
Despite their own votes for change, not one of Nguyen’s Republican colleagues on the Board of Supervisors spoke out against her directly or even mentioned the executive upheaval of the past two years that coincided with her dominance of the CalOptima board of directors.
Ultimately, in a 4-1 vote, with Supervisor John Moorlach dissenting, Nelson successfully implemented a change he had been advocating for years: adding another supervisor to the panel to check Nguyen’s influence.
However, Moorlach in turn publicly warned his colleagues Tuesday that, given the potential disruptions in management, they should be prepared for much more wide-sweeping change to the agency — outsourcing its functions to the state government.
Moorlach publicly asked CEO Michael Giancola to examine the possibility of moving to another model.
“You wouldn’t need a board … if we could get out of this industry,” Moorlach said.
At one point during Tuesday’s deliberations, CalOptima CEO Michael Schrader told county supervisors that he had already been advised by Sacramento officials that they are closely monitoring the situation and don’t want to see any big shifts other than cooperation with the state audit that is now under way.
Nguyen steadfastly defended her actions on CalOptima, at one point even scolding her colleagues for past misstatements about the health care authority that few supervisors, other than Nguyen, seem interested in serving on.
Nguyen also took aim at the Democrats, saying it was sad that party officials “decided to politicize an issue that’s so important to many local people in need for quality care.”
“I want to start out by saying regardless of all the criticism I’m facing, I still stand by my actions,” Nguyen said, adding that the past two years as the supervisors’ sole appointee to CalOptima has been “so frustrating” because of inaccuracies stated, “even by members of this board.”
“Enough of the nonsense,” Nguyen said. “Allow me to reinstate the facts.”
Nguyen admitted publicly that her style may have ruffled feathers of executives, but she said her actions were justified.
She argues that the position of providers on the CalOptima board was enhanced but not in an overly broad manner.
“We wanted everybody at the table,” Nguyen said, noting that her 2011 ordinance ensured that hospitals, doctors and network providers had a permanent seat on the board of directors instead of a tilt toward clinics and users.
“That’s the only thing we did. We made sure … so we have three voices and not one,” Nguyen said.
“The departure of the old leadership at CalOptima was actually a good thing,” she added.
“There were no checks and balances,” she said, criticizing the period before she took over, which was presided over by Supervisor Moorlach.
Yet by most indicators at the time Nguyen joined the CalOptima board in 2011, it was recognized throughout California and nationally for being well run.
Then CalOptima CEO Richard Chambers even served on the 21-member Congressional Budget Office Panel of Health Advisers, a nonpartisan, independent group that advises the Budget Office on national health policies, economics and insurance.
“I always found it easy to brag about CalOptima,” said Moorlach in a telephone interview Tuesday after the session.
Yet Nguyen characterized the executive culture of CalOptima as one dominated by lucrative executive bonuses, questionable building purchases and improper legal contracting.
She also noted “compliance has been a longstanding issue at CalOptima.”
Despite all the changes she has brought in, Nguyen said, it’s still a complex $1.5-billion agency and full of challenges.
Nguyen even challenged all five supervisors to come onto the CalOptima board of directors, saying it’s “very comparable to OCTA," the Orange County Transportation Agency.
Nelson said he’s convinced that having one supervisor on the board of CalOptima is not wise.
“If something does come up on this agency, whether appropriate or not, it unfairly singles out whoever on our board has been appointed,” Nelson said, offering Nguyen a rare protective political umbrella.
Nelson argued for adding another supervisor to the formal board of directors.
That prompted Spitzer to step up, even though he publicly discussed his lack of interest in health care policy, one that mirrors a historic one from the mostly Republican Board of Supervisors.
“I didn’t run for office to do health policy,” Spitzer said. “That’s not my gig.”
“I don’t get up every day saying I’m going to go conquer health care policy,” he added.
Yet Spitzer acknowledged, “these are real people at the end of these services.”
He also publicly acknowledged that the state audit of CalOptima will most probably not be easy.
“We do need another regular person at bat,” Spitzer said.
“I feel like the burden is a lot on me … and maybe it should be,” he added.
Spitzer said: ”I can’t support the status quo. You have to have at least another supervisor there.”
Supervisor Pat Bates cautioned her colleagues against focusing on too many governing board changes, arguing “nobody has taken issue on the makeup of this board other than outside forces, and most of those have been political.”
“We’ve made this a problem that doesn’t exist by focusing on the board. We should be focused on compliance,” Bates said.
“We need to let these audits go forward.”
Clarification: An earlier version of this article stated that Supervisor Todd Spitzer had been appointed to the CalOptima board. The official appointment is not expected to happen until next week.