A year-old vacancy on the CalOptima board of directors is reserved for a "public" representative, but the two candidates county supervisors will choose from Tuesday have strong ties to the hospital industry, giving that special interest two of the board’s 11 seats.
One candidate to fill the vacancy is Ronald R. DiLuigi, who retired in June after 17 years as a lobbyist for St. Joseph Health, which operates 16 hospitals including four in Orange County: St. Joseph, St. Jude, Mission and Hoag.
Before becoming a lobbyist, he spent 27 years as an executive with the county’s Health Care Agency.
The other candidate is Dana Point City Councilman Scott Schoeffel, a hospital lawyer who, until April, was a vice president and general legal counsel for Santa Ana-based Integrated Healthcare Holdings Inc. (IHHI), operator of four Orange County hospitals.
While IHHI was the subject of years of financial controversy, it is probably best known for losing a $5.7-million civil suit in which the firm's former CEO, Bruce Mogel, was accused of planting a loaded gun and drugs in the car of Dr. Michael W. Fitzgibbons, who had bested IHHI in a previous case.
IHHI currently is owned by KPC Healthcare and operates Western Medical Center in Santa Ana; Western Medical Center in Anaheim; Coastal Communities Hospital in Santa Ana and Chapman Medical Center in Orange. Western Medical Center’s name has been changed to Orange County Global Medical Center and the others have added “Global” to their names.
In the past, IHHI also has been a substantial contributor to political campaigns including $1,900 this year to Board of Supervisors Chairman Todd Spitzer.
After leaving IHHI in April, Schoeffel became a special counsel to the Irvine law firm Buchalter Nemer, which, according to his resume, specializes in “health care law, with a concentration in matters involving hospitals, managed care and integrated health provider networks.”
The opening on the CalOptima board was created in August, 2014 when Steve Knoblock resigned. County officials said they tried twice last fall to recruit a replacement, but no one applied. They tried again in June and got five applications for the opening.
The selection committee held its discussion of candidates in August and members of the public had the opportunity to speak, but no one came, according to minutes of that meeting.
Knoblock, a former aide to onetime Supervisor Larry Schmidt and a real estate lawyer, was appointed to a four-year term in 2012. His replacement will serve the final eight months of his term, ending next April.
CalOptima has a $3 billion annual budget and covers 740,000 poor, elderly and disabled residents. One-third of those served by the plan are children and virtually all of its money comes from the federal and state governments.
The CalOptima board, which is selected by the Board of Supervisors, includes the following members:
- Two doctors who can get some payments directly or indirectly through CalOptima.
- A businessman.
- A recipient of CalOptima health benefits;
- Two representatives of clinics that receive CalOptima benefits.
- St. Jude CEO Lee Penrose, whose hospital also receives payments through CalOptima.
- Mark Refowitz, head of the county Health Care Agency.
- Michael Ryan, director of the county Social Services Agency.
- County supervisors Lisa Bartlett and Andrew Do.
Bartlett and Do were part of the five-member committee that selected DiLuigi and Schoeffel. The other committee members were county employees.
In recent years, CalOptima has been mired in controversy brought on by the actions of former Supervisor Janet Nguyen. In 2011, Nguyen, as the supervisors’ representative, remade the board in a way that many said tilted it toward the medical industry, which she has tapped as a big source of her campaign contributions.
Other supervisors have also received numerous contributions from the hospital industry, and industry representatives were instrumental in helping Nguyen rewrite the CalOptima ordinance that changed the make-up of the board.
While Nguyen was remaking the board, more than two-dozen top executives left, most for better jobs in private industry, just as enrollment doubled when the federal Affordable Care Act took effect.
Performance deteriorated so badly that in 2013 federal officials ordered CalOptima to immediately halt enrolling elderly patients into its 16,000-member OneCare program, citing a “serious threat to the health and safety” of participants.
(Click here to read the Centers for Medicare & Medicaid Services letter.)
After instituting reforms required by federal and state examiners, CalOptima was allowed to resume enrolling participants in the OneCare program and changes were made in other procedures.
You can contact Tracy Wood at email@example.com and follow her on Twitter: @TracyVOC.