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Hospital executives occupy top tier of California's public workers

Controller's latest report shows CEOs of hospital districts among the highest-paid public employees. Healthcare-industry experts say those salaries reflect the rigors of the job and pale in comparison to the private sector.

March 29, 2011|By Sam Allen, Los Angeles Times
  • Michael Covert, Palomar Pomerado Hospital District CEO, and Nancy Farber, CEO of Washington Township Healthcare District, are the two highest-paid public employees in California.
Michael Covert, Palomar Pomerado Hospital District CEO, and Nancy Farber,… (pph.org, left, and www.whhs.com )

Three hospital district executives have emerged as among the highest-paid public employees in California, according to a state report, including an official in San Diego County who made more than $1 million in 2009.

Palomar Pomerado Hospital District Chief Executive Michael Covert's pay is the highest out of thousands of special-district employees covered so far in a database compiled by State Controller John Chiang. The database now includes compensation figures for all employees of California cities and counties and many of its special districts.

The salary survey comes after public outrage over the high compensation of some city officials, including former Bell City Administrator Robert Rizzo, who was set to earn more than $1.5 million in 2010. The Times also found that Vernon's onetime city administrator, Eric T. Fresch, earned $1.65 million in 2008.

But hospital officials and their advocates argue that it's important to put the salaries of the hospital directors in context, given the complexity of their jobs and the fact that they are in great demand in the private sector.

"You've got to look at what the market demands," said Jim Lott, executive vice president of the Hospital Assn. of Southern California. "This is not your typical government job; a hospital CEO in the public sector is extremely sought after."

Lott said most hospital administrators work between 60 and 80 hours a week and manage large, vital organizations. "The hospital CEO is never off-duty," he said.

Covert made $1,035,709 in total wages in 2009, according to the controller's database. In addition to his $587,204 base salary, he received a $350,000 bonus and a $93,000 contribution to his pension fund, hospital officials said.

Covert said in an interview that he wasn't sure whether his compensation was in line with other executives across the state, and that he deferred to the hospital board of directors in determining the wage. "I don't really sit down and ask the other CEOs what they make," he said.

Officials at the hospital strongly defended his pay.

"There's this notion that because you're a public agency you should hire less-talented people than private companies, and if we followed that idea, PPH would not be where it is today," hospital spokesman Andy Hoang said. "We must compete for the best physicians, nurses and executives to provide the highest level of care. The community deserves that."

Hoang said that in addition to overseeing the largest public healthcare district in California — the hospital has more than 4,000 employees — Covert is managing one of the state's largest construction projects, a $950-million medical campus slated for completion in 2012.

Hoang added that Covert's pay was set based on the analysis of an independent consultant before being approved by the hospital's board of directors.

Officials at the Washington Township Health Care District in Fremont, Calif., also argued that they needed to pay "market rate" to obtain top-quality staff. The hospital's chief executive, Nancy Farber, is the second-highest-paid official covered in Chiang's database so far. She was paid about $874,000 in 2009.

The list of top-paid executives also includes Sam Downing, president and chief executive of the Salinas Valley Memorial Hospital District, who made about $791,000 in 2009, and Lee Domanico, chief executive of the Marin Healthcare District, who made about $582,000.

The healthcare publication Payers & Providers, using figures from Chiang's database, reported that the average compensation for private hospital chief executives, $732,000, far surpassed the average of their counterparts in public districts, $245,000.

Chiang's database lists public employees' total "Box-5 Wages," also known as "Medicare Wages." His office chose that figure because it captures salary as well as other forms of compensation, such as bonuses and vacation buybacks, spokesman Garin Casaleggio said.

The controller's office plans to release an additional set of data from California's special districts in May, and figures for all state employees in June, Casaleggio said.

sam.allen@latimes.com

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