A regional hospital association is raising concerns about OC supervisors appointing someone without local hospital experience to the hospital position at the county’s public health insurance board.

Two OC supervisors also echoed those same concerns last week, when a slim majority of their colleagues – led by Andrew Do – disregarded industry group concerns and appointed Blair Contratto, a longtime executive at nonprofit hospitals and health centers in LA County.

Contratto is slated to take the hospital administrator seat at CalOptima, Orange County’s $4 billion publicly-funded health insurance plan for one in every four residents.

Do chairs both CalOptima’s board of directors and the OC Board of Supervisors.

The move to appoint Contratto brought a rare public rebuke from the regional hospital association and two county supervisors, who raised concerns that she lacked experience in Orange County.

Supervisors were departing from their longtime practice of relying on the hospital community’s recommendation for the position, wrote George Greene, president and CEO of the Hospital Association of Southern California, in a letter to supervisors before the vote.

“Diverging from this proven historical process disregards the breadth of knowledge and experience our hospital leaders bring to CalOptima,” Green added.

Green and the association wanted KPC Health CEO Peter Baronoff, who they said has experience leading hospitals across OC.

“Diverging from this proven historical process disregards the breadth of knowledge and experience our hospital leaders bring to CalOptima,” Green added.

Contratto didn’t return phone messages for comment.

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Baronoff was also supported by the Orange County Business Council in a letter to supervisors.

“Mr. Baronoff’s comprehensive knowledge of complex hospital issues would make him a vital addition to the CalOptima Board of Directors,” wrote Lucy Dunn, the business council’s president and CEO, noting Baronoff serves on her group’s board.

Paul Yost, a former chairman of CalOptima, said he doesn’t know Contratto but thinks it’s important that the board members have deep health care experience in Orange County.

“You’re asking a lot of the Orange County [health care] providers to provide services for what are less than market rate services most of the time,” Yost said of CalOptima in a Monday phone interview.

Like the hospital association and the business council, Yost said a CalOptima board member needs experience in Orange County.

“In order to make that system work, you need someone who has good relationships with the health care providers within Orange County. At least that’s the way it’s functioned all along. and you need a strong board. A strong, independent board,” he said.

Do argued that Contratto will bring an independent lens to CalOptima.

“Ms. Contratto has had more than 40 years of healthcare experience in … not-for-profit healthcare, with a particular interest in poor, vulnerable and underserved communities,” Do said during last week’s supervisors meeting.

He also said her outsider status could prevent conflicts of interest.

“She is also currently unaffiliated with any networks that CalOptima does business with. So this will also eliminate many of the conflicts [of interest], and allow CalOptima to establish [a] quorum on its board.”

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Do was backed by Chaffee, who said he supported the fact Contratto isn’t affiliated with anyone who does business with CalOptima.

But he was publicly challenged by two of his other supervisor colleagues – Lisa Bartlett and Katrina Foley – who cited concerns that Contratto lacks health care administrator experience in Orange County.

“I don’t believe the two candidates have the current and relevant experience for the hospital administrator seat that we’re looking to fill today,” said Bartlett, referring to Contratto and another candidate, Dr. Josh Luke.

“I don’t have any letters of support or anything for the two candidates that are coming forth today,” she added, noting a contrast with many letters of support for Baronoff.

Bartlett called to restart the CalOptima board appointment process and “get candidates that have current and relevant experience.”

Do didn’t respond, instead calling for the vote to appoint Contratto.

Foley echoed Bartlett’s concerns about Contratto.

“I was concerned there was a lack of current experience … a lack of current length of time in Orange County. So I would agree with you that we need to go back out” and do another recruitment, Foley said.

Do then immediately called for the appointment, and Contratto was appointed on a split 3-2 vote. 

Supervisor Don Wagner, Do and Chaffee voted for the appointment.

Bartlett and Foley opposed the move.

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CalOptima manages the healthcare of hundreds of thousands of low-income Orange County children, adults, seniors, and people with disabilities – about one quarter of all residents and one third of all children.

Its multi-billion budget comes primarily from federal and state funds through publicly-funded health programs Medical and Medicare.

The appointment comes as CalOptima’s board prepares to pick a permanent CEO to replace former CEO Richard Sanchez, who quit recently after just a year on the job.

There’s been widespread reports that Do wants to move county Health Care Agency Director Clayton Chau into the CalOptima CEO job, something that would require majority support from CalOptima’s board, where Do serves as chair.

So far, Do and Chau have declined to comment on whether Chau would be moving to CalOptima.

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There’s also a controversial history at the top of CalOptima involving county supervisors.

In 2011, then-Supervisor Janet Nguyen worked with a hospital lobbyist to restructure the health plan’s board to enhance the influence of the medical industry.

Two years later, a scathing county grand jury report – called “CalOptima Burns While a Majority of Supervisors Fiddle” – blamed Nguyen’s actions for a disruptive environment that saw the departure of 16 top executives. CalOptima spent much of 2012 and 2013 with vacancies in key positions.

Meanwhile, Do has also tried to assert his own influence at CalOptima, leading a remaking of the board, attempting to take it over, and trying and failing to become its chairman, before later succeeding in becoming the health plan’s chairman.

Nick Gerda covers county government for Voice of OC. You can contact him at ngerda@voiceofoc.org.

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