OC Watchdog gets the low-down on Cal Optima Executive Pay

CalOptima staff gets raises while cutting fees to doctors
September 7th, 2008, 6:00 am · 3 Comments · posted by Jennifer Muir

We told you last week that CalOptima, the county’s $1 billion health care safety net, was cutting pay to doctors by 10 percent to pass along the expense of expected cuts to the state budget and that the agency was paying doctors from its reserves even though they haven’t been reimbursed from the state in months.

CalOptima just sent over documents this week that show that while cutting pay to doctors, the agency recently gave one top administrator a 10 percent raise and gave their employees $600,000 in pay raises.

The records also show that CalOptima’s CEO didn’t take a raise at all, and that the agency shaved $1.4 million from what it would have paid for administrative costs if the state budget wasn’t in such trouble.

Disagreement over just how much doctors should be paid during all the budget uncertainty erupted last month at a county Board of Supervisors meeting. At the meeting, Michele Revelle, a lobbyist for the doctor’s group Orange County Medical Association, criticized CalOptima for giving its staff raises and other administrative spending while paying out less to hospitals and doctors.

The argument reinforces the tough situation for both CalOptima and doctors trying to plan their futures when they don’t know whether the state will slash their funding and they don’t know when lawmakers will figure out a solution.

“In a time that’s so desperate and doctors are barely surviving, they’re cutting costs to doctors and still getting all these things,” Revelle said last month. “If you’re going to make all these cuts to physicians that are dying on the vine, we want to look at what you’re spending on, and we need proof.”

So we asked for that proof. Read on to find out what they sent.

Cal Optima sent over a list of salaries for its top five administrators for fiscal year 2007-2008. COO Gary Buchert got the biggest raise this year, 10 percent, bringing his salary to $275,000. A spokesman said Buchert took on some new responsibilities this year.

“You’re also dealing with medical doctors here who have an opportunity to go out into the market and have a potential to realize a bigger salary,” said Ben Boyce, vice president of the PR firm Laer Pearce and Associates, who returned calls to CalOptima on Friday. “It’s all part of competing for the best talent, which ultimately benefits the thousands of patients that CalOptima serves.”

CEO Richard Chambers, who earns $312,700 a year, was among the three top administrators that didn’t receive a raise at all. A fourth administrator got a two percent salary increase.
CalOptima also sent over a breakdown of the administrative costs for its 2008-2009 budget. About $600,000 of the agency’s $26,030,504 salary and benefits budget will pay for merit increases. The money for those raises came from a previous budget surplus.

The rest will pay for new employees, who are needed to take on work for a new shared-risk program, and increases to employee health insurance premiums.

Overall, the budget for salaries and benefits increased nearly $1.5 million, or six percent, from $24,536,823.

CalOptima’s board will likely revisit its entire operating budget once the state budget is passed.
“The board’s approach in connection with facing that shortfall was to share the pain of that,” CalOptima spokeswoman Margaret Tatar said. “I can’t underestimate how dire the state situation is. I totally empathize with the providers … “

Revelle explained just how dire it is for doctors, warning that if the cuts continue, up to 44 percent of the group’s 2,700 local physicians could stop taking new patients enrolled CalOptima, according to an informal survey of doctors.