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County Medical Contracts Sewn Up, Critics Say

Competition: They contend bidding policy excludes doctors not in the system. Officials say others are welcome to submit proposals for the highly sought jobs.


Ventura County spends more than $22 million each year to hire doctors to serve the poor, using noncompetitive contracts that critics say amount to sweetheart deals that should be open to bidding.

A Times analysis shows that 50 of those contracts exceeded $50,000 last year. Nine contracts were worth more than $1 million each. The most lucrative paid nearly $2 million to Dr. Miguel Cervantes, the operator of a bustling south Oxnard clinic.

For years, when insurance companies let private physicians set their own fees, these public contracts were hardly considered plums. Now, with private physicians being squeezed by tightfisted HMOs, these contracts are more attractive, especially since they often cover hefty overhead expenses such as rent and malpractice insurance.

But local doctors who want to bid on contracts at the county hospital and its network of clinics say they have found a closed society built on personal relationships and perpetuated by habit.

Dr. Leland L. Sprague is one of those who wants a piece of the action. And he thought he had a good shot a few years ago, when he underbid the county's chief anesthesiologist by about $200,000, he said. He still lost out to the doctor who had held the county contract for many years.

"The whole system is based on close-knit associations," said Sprague, 68, now a doctor in Ojai. "We feel that taxpayers are the losers, and we wonder what sort of oversight the Board of Supervisors is using in all of this."

Adding fuel to the controversy is a nasty six-year feud between the county's hospital and private Community Memorial. Critics say county officials have hired doctors who sided with them.

Dr. Samuel Edwards, administrator at the county hospital, offers no apologies for a system of medical care he says is already high-quality, efficient and a bargain for taxpayers.

"I'm very proud of the doctors I have for the money I spend," he said. "I'd challenge anyone to do better."

It's true, Edwards said, that the county staffs its health care system without a formal bidding process. But you can't build a stable medical staff based on low bids, Edwards said.

Instead, the county hires experienced local physicians and keeps them together as a team to treat patients and to teach 39 young doctors-in-training at the general hospital.

"The bottom line is that all physicians are not equal," Edwards said. "You don't pick the cheapest one. Getting the right mix of physicians to do what we need is very difficult."

Ventura County's health care system exists to provide a safety net for the indigent and working poor--about 25% of all local residents. Founded a century ago, the system employs about 120 doctors to staff its 180-bed general hospital in Ventura and to direct 21 far-flung clinics. Together they provide services ranging from brain surgery to emergency medicine. At The Times' request, the Health Care Agency compiled a list of the county's top 50 physician contractors in 1998 based on overall payments.

The amounts ranged from nearly $2 million for Cervantes to operate the 10-doctor Las Islas clinic to about $52,000 for a group of Ventura lung specialists paid on a per-surgery basis. Five physicians who both headed departments at the county hospital and operated community clinics held two large contracts each in 1998:

Pediatrician Christopher Landon was paid nearly $1.9 million; obstetrician Robert Lefkowitz was paid nearly $1.7 million; family practitioner Joan E. Baumer was paid about $1.3 million before moving away at midyear; general surgeon James Holden was paid about $1.15 million; and internist Robert Gonzalez, medical director of the clinic system, was paid nearly $1.1 million after taking over operation of a Baumer clinic for six months.

Those totals reflect all payments for service, and do not show how much contractors cleared after paying their employees and covering an array of expenses not reimbursed by the county.

Contracts Attractive to Outsiders

Many local physicians say those county contracts look good to them, and they want a chance to bid against current contractors.

"Competition is what democracy is all about," said Dr. Gus Iwasiuk, a Santa Paula general surgeon and former president of the Ventura County Medical Society. "A free economy wants open bids and wants an open market. That may hurt individuals' feelings, but it doesn't hurt quality."

Dr. John Keats, medical director at Ventura-based Buenaventura Medical Group, said his 40-doctor partnership would like a chance at the county contracts, which are automatically renewed every year. Particularly attractive to Keats, an obstetrician and gynecologist, is the county's $1.1-million contract for women's care.

"I certainly believe it is possible for my organization to provide those obstetric services at a cheaper rate," Keats said. "Do they really need four full-time obstetricians over there? I don't think so."

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