CalOptima, the county’s $3.2 billion health plan for poor, disabled and elderly residents, will be overseen by a new board of directors beginning in August, because only two of the seven members whose terms are up abided by a new requirement that they reapply for their seats.
Dr. Samara Cardenas, one of the board members who chose not to reapply, called the new requirement “a slap in the face.”
“We (the board) are doing a good job,” said Cardenas, a pediatrician, as she abruptly announced her decision at the end of the monthly CalOptima board meeting on April 7. “Nowhere in the business world do you fix something that’s not broken.”
Moments before Cardenas made her announcement, Supervisor Andrew Do who, along with Board of Supervisors Chairwoman Lisa Bartlett wrote the new CalOptima ordinance, told the meeting what they wanted from the new board.
“We are entering a new chapter, a new era in health care,” he told his colleagues. “We don’t know really what to expect.”
The New Board
A total of 55 applications from Orange County residents for the seven voting board positions were received by the county’s Health Care Agency by the April 15 deadline. The screening process will be complete and the new board sworn in August 4.
The new board will have a total of nine voting members instead of the current 11. Two will continue to be county supervisors and the other seven will be picked to fill specific requirements.
Only Lee Penrose, the board vice chairman who represents hospitals, and Peter Agarwal, a bank vice president, applied to remain on the board. There is one vacancy.
The list of applicants wasn’t made public until last week and it was not immediately clear if all of the others didn’t reapply because they agreed with Cardenas or if some had other reasons.
CalOptima’s membership of more than 782,000 is about 26 percent of the county’s total population of more than three million.
The new CalOptima board, Do said, must be “independent”, “conscientious”, concerned primarily about “what’s best for CalOptima” and “as free of a professional slant as possible. That’s what we’re looking for.”
Cardenas said the old board was all those things.
“I just didn’t feel it was fair to me and to all the colleagues on the board” to make them reapply and go through the applicant process again, Cardenas, a member of the board of directors of the Children’s Hospital of Orange County Physicians Network, said in a telephone interview.
Some current directors have complained about the amount of time required to serve on the board and others, including Cardenas, have used their positions to advocate for higher pay for doctors. Base pay is set by the state and California has one of the lowest doctor payment rates in the nation.
CalOptima augments physician payments somewhat with specialists getting more than primary care doctors. But statewide, the hospital lobbyists have more clout in Sacramento and locally than the doctors’ lobbyists and fare better financially.
In fact, it was local lobbyists for the Hospital Association of Southern California (HASC) who in 2011 teamed with then-Supervisor Janet Nguyen and her allies, former supervisors Bill Campbell and Pat Bates, to rewrite the existing CalOptima ordinance, get rid of its former board members and install the current board, which gave more control to providers.
Nguyen didn’t vote for Cardenas. Another candidate for that seat was strongly backed by one of Nguyen’s campaign donors so, at the May, 2012 supervisors meeting, Nguyen backed the donor’s candidate while Campbell and Bates took the lead in getting Cardenas her seat.
How Politics Play a Role
How Do, Bartlett and other county officials involved in the new selection process will handle political donors, prospective donors and applicants with political connections and still maintain their goal of creating a board that does “what’s best for CalOptima,” as Do put it, hasn’t been publicly discussed.
The applicant list includes a number of politically connected potential directors as well as candidates with strong ties to provider groups that could be a future source of campaign contributions.
Nguyen, who was elected to the state Senate in 2014, recognized the fundraising potential of the health plan for the county’s poor and disabled and raised about $100,000 from the medical industry while her new ordinance was going into effect.
Nguyen’s actions led to a county grand jury report “CalOptima Burns While a Majority of Supervisors Fiddle,” and the new, highly inexperienced board took over just as Obamacare was taking effect. Roughly two dozen top CalOptima execs left for better paying jobs at the same time the organization was trying to prepare for a major increase in members.
Among the politically connected applicants this go-around are lawyer Joseph Scott Schoeffel, who served with Bartlett on the Dana Point city council. Schoeffel, according to his application, has a contract with Integrated Healthcare Holdings Inc. (IHHI), which owns four Orange County hospitals and has been a generous campaign donor in the past. The company also has a controversial history and changed its name to KPC Healthcare Inc. The law firm Schoeffel works for, Buchalter Nemer, also has IHHI/KPC as a client, according to Schoeffel’s application.
Other applicants with political connections include Sharon Morrison, field representative for GOP Assemblyman Matthew Harper of Huntington Beach. Harper was Nguyen’s chief of staff when she was a supervisor.
Do also was a former chief of staff for Nguyen but the two since then have had a falling out.
Steve Knoblock, a real estate lawyer and former San Clemente city councilman, began his career as an aide to former Supervisor Larry Schmidt and applied to return to the CalOptima board. Knoblock was one of Nguyen’s 2011 board appointees but he resigned more than a year ago when he began working in Los Angeles. His seat remained vacant and he has applied to rejoin the board.
Influential medical providers also have employees seeking seats on the CalOptima board, like AltaMed Health Services Corp., which has two of its doctors and one of its nurses applying.
In addition, AltaMed President Castulo de la Rocha wrote a letter of recommendation for Isabel Becera, the CEO of the Coalition of Orange County Community Health Centers. Becera submitted 17 letters of recommendation with her application including one from current board member Ellen Anh, who didn’t reapply to remain on the board.
AltaMed’s Castulo and three of his executives hosted a fundraiser for Do April 20. The supervisor is up for re-election this year.
Current CalOptima board members have so many conflicts of interest that its pretty routine for two to four to have to leave the room when votes are taken and they often face the possibility of having less than a majority of members eligible to vote. Do has said he wants the new board to have fewer conflicts.
In addition, in 2014, CalOptima was hit with a major federal audit and ordered to immediately halt enrollment of elderly patients into its 16,000-member OneCare program, citing a “serious threat to the health and safety” of participants. A state audit turned up additional problems. Those sanctions were lifted a year later, in February, 2015 and at this year’s April 7 board meeting staff reported state auditors were impressed with the improvements made at CalOptima.
(Click here for a complete list of applicants for the CalOptima board)
The new board created by Do and Bartlett will have nine voting members instead of the 11 in place now. Following a recommendation of the grand jury, Mark Refowitz, the head of the Health Care Agency, will remain on the board but not vote. The grand jury felt county workers were too subject to pressure from supervisors to hold voting positions.
The seven voting seats must include the following people:
- A legal resident of Orange County.
- A current or former hospital administrator.
- A representative of a community clinic.
- A current CalOptima member or a family member of a current CalOptima member. “Family member” is defined as a parent, sibling, foster parent or legal guardian.
- Someone with professional accounting or public finance experience or an active, licensed attorney. Prior health care system experience is preferred.
- A licensed medical provider in current practice who is not an owner or officer or member of the board of directors of either a contracted independent physician’s association or a health network.
- A licensed physician in current practice who is a representative of a contracted, independent physician’s association or health network.
Depending on their qualifications, applicants were allowed to apply in more than one category and several did.
You can contact Tracy Wood at firstname.lastname@example.org and follow her on Twitter: @TracyVOC.