Million-Dollar Nurses Show California’s Struggle to Cut Payroll

California (BCAX) has paid Lina Manglicmot $1.5 million since 2005, an average of $253,530 a year, to work as a prison nurse in the agricultural town of Soledad.

Manglicmot is one of 42 state nurses who each made more than $1 million in those six years, mostly by tapping overtime, according to payroll data compiled by Bloomberg News. Together, those nurses collected $47.5 million. In 2008, Manglicmot was paid $331,346, including $211,257 in overtime.

The extra pay that allows some nurses to triple their regular compensation underscores a broader trend in California, where government workers are paid more than in other states for similar duties and civil-service job protections hamper efforts to close budget gaps. Governor Jerry Brown said this week that revenue will fall short of expectations, triggering $1 billion in cuts to school busing, libraries and care for children, the elderly and the disabled, among other programs.

“California taxpayers should be outraged,” said Lanny Ebenstein, an economics lecturer at the University of California at Santa Barbara and president of the California Center for Public Policy, a research institution critical of public-sector compensation. “Taxpayers should insist that this is no longer acceptable because what government does is important and it’s important that government run effectively.”

California is home to city managers whose compensation is higher than the governor’s, prison doctors who make more than counterparts elsewhere, Los Angeles firefighters who collect twice the national mean and state workers who reaped $1.7 billion more than their regular salaries last year, from overtime and unused vacation pay to physical-fitness incentives.

Above National Average

Public nurses make far more in California than they do in New York or Texas. Their pay also places them well above the $67,720 national average for registered nurses, according to the U.S. Bureau of Labor statistics.

The highest-paid nurse in New York last year earned $186,909 working in a prison north of Manhattan, according to payroll data from the state comptroller’s office. Seventy-five nurses in California made more than that in 2010, and the top earner was paid $269,810, including $179,800 in overtime.

The director of nursing for the Texas prison system makes $165,000 a year, while rank-and-file registered nurses are paid $68,000 to $72,000, said Owen Murray, vice president of offender health services for the University of Texas Medical Branch. The state’s prison nurses aren’t unionized, and overtime payouts to the penal system’s health-care staff are limited, Murray said.

‘No Way Possible’

“There might be some overtime opportunities, but it would never be more than a handful of hours in a pay period,” Murray said. “So there is no way possible, even at time-and-a-half, that you would reach the ranges that you are talking about in California.”

An array of union-sought laws and regulations keeps nurses’ pay high in California. A rule limits mandatory overtime, yet doesn’t control how much extra time employees can work voluntarily. California must offer extra hours to state employees first, even when officials estimate that a temporary nurse would be cheaper. The state isn’t allowed to hire new prison nurses to fill in for the 10 percent who are on long-term sick leave.

California paid the overtime as the state grappled with more than $100 billion in budget shortfalls since 2008, forcing it to cut spending by 16 percent. The six-year period in which the 42 nurses collected $24.6 million in overtime coincided with the recession that damaged housing markets and curbed tax revenue in California and elsewhere.

$98.7 Million in Overtime

Last year, the state’s nurses were paid a total of $98.7 million in overtime at one-and-a-half times their normal hourly wage -- an average of $17,692 each. Since 2005, California has paid more than $424 million in overtime for nurses, data obtained from Controller John Chiang shows.

Most of the overtime is concentrated in prisons and mental- health hospitals, where 83 percent of the more than 6,000 nurses for those two agencies collected extra pay in 2010, according to the data.

Union officials say they have urged the state corrections and mental health departments to consider more efficient scheduling, which they say would reduce overtime.

“We actually have looked at this and tried very hard to get them to understand that mandatory and even voluntary overtime is not the way to go,” said Nancy Lyerla, former chairwoman of the bargaining unit for prison nurses at the Service Employees International Union Local 1000, the largest union of state employees in California. “It’s very expensive. We recognize that and have had lengthy discussions with them about that.”

State officials have taken some steps to curb overtime.

Looking For Fixes

Clark Kelso, the court appointed receiver put in charge of California’s prison health system after inmates filed a legal challenge to the quality of care, sent a management team to prisons with especially high overtime and sick-leave totals to examine the reasons and find fixes, said his spokeswoman, Nancy Kincaid. Kelso has sought lower costs from companies that offer temporary contract nurses to the state, she said.

Critics such as Ebenstein don’t understand how much the agency has worked to improve prison medical care efficiencies since 2006, Kelso said in a statement.

‘Examples of Mismanagement’

“We have been tackling these examples of mismanagement,” he said. “Over the last several years, we have improved medical care significantly while saving taxpayers more than $400 million. There is still more to do. We focus every effort on improving the system through increased efficiency and reduced costs.”

For example, the department has hired more nurse assistants and licensed vocation nurses to handle duties such as medication management and round-the-clock suicide watches, Kincaid said. In the past, that duty has fallen on the registered nursing staff, boosting overtime costs.

Before 2009, California law allowed personal-leave hours to be counted as time worked in calculating overtime. A state audit in 2009 found a worker at the Sonoma Developmental Center who was paid for 160 hours of overtime in a single month, even though the employee took 167 hours of leave during that period.

That rule has since been changed, so that only approved leave and not sick leave can be calculated toward overtime and only if the employee is ordered to work the extra hours.

While the day-to-day causes of overtime vary, such as when a prison is locked down and a nurse already on duty must remain past her regularly scheduled shift, prison health-care executives are limited by state law in their ability to use contract nurses to cover for employees who are ill or on vacation.

Long-Term Leave

Labor laws also prohibit the state from hiring a new civil- service nurse to fill in for those on long-term leave.

“The constitution says that if a civil servant can do the job, we must hire or use a civil servant and not an outside contract,” Kincaid said. “So we’re required to offer the overtime to staff before we can go outside to fill it.”

Kincaid said the agency tries to anticipate what staffing level is needed for a given shift based on inmate population and the severity of medical issues. It schedules extra employees in anticipation that the ratio may change because of patient needs or workers who call in sick.

Not Enough

That’s often not enough, she said. During two hunger strikes by inmates throughout the state’s prison system in July and September of this year, nurses had to work an extra 7,000 hours of overtime to ensure proper medical care, Kincaid said. Three-day-a-month furloughs in 2009 through 2011 also thinned the staff, requiring more overtime, she said.

At a prison drug-treatment center in California’s central valley, 160 miles north of Los Angeles, nurse Milacris Andres has been paid more overtime than regular pay in each of the past six years, payroll data show. In all, she has collected almost $700,000 in overtime pay since 2005, boosting her income during that time to $1.24 million. Through Kincaid, Manglicmot and Andres declined to comment.

“I have never heard of a nurse making that kind of money,” said Lorry Schoenly, a Philadelphia-based prison health-care risk and quality of care consultant. “I’m shocked that they would have any openings left. California Department of Corrections and Rehabilitation may benefit from a fresh look at their staffing patterns and hiring practices.”

Nurse Overtime Triples

Overtime pay at the Department of Corrections has declined by 27 percent to $475 million last year since reaching a high of $648.5 million in calendar year 2007, payroll data show. Overtime for nurses more than tripled since 2005, to $54 million last year.

At the Department of Mental Health, also operating under federal oversight, overtime costs have soared about 75 percent to almost $100 million last year, from $56.6 million in 2005, payroll data show. Overtime pay for nurses in the agency more than doubled during that period to $41.2 million.

Maria Theresa Sicad was paid $227,014 last year as a nurse at the state mental-health hospital in Napa, even though her base pay was $86,427. Since 2005, she’s been paid $823,905 in overtime pay. Through agency spokeswoman Beth Willon, Sicad declined to comment.

The agency has been understaffed for years partly because of the difficulty of recruiting nurses in some rural locations, said the agency’s acting chief deputy director, Kathy Gaither. Another factor that taxes the staff is federal oversight of the mental-health department, which requires nurses to spend many hours documenting patient care, she said.

Accumulating Overtime

Labor contracts for the nurses require that overtime be offered first to volunteers, so the agency doesn’t have a choice in which employees work the extra hours. That allows some workers to accumulate large quantities of overtime hours. The agency can’t assign mandatory overtime until there are no more volunteers willing to take the hours.

California has made efforts to curb its payroll costs, include a hiring freeze ordered by the governor in February. According to the controller’s office, the number of full-time employees of the state payroll has shrunk to 201,408 in October from 205,635 when Brown took office in January.

He and the state legislature passed a plan to ease crowding in prisons by shifting responsibility for thousands of criminals from state control to county jails and local probation.

The Department of Mental Health recently announced an overhaul that includes ways to make staff-to-patient ratios more flexible and technology and documentation improvements that will move nurses from paperwork duty back to direct patient care, Gaither said.

‘Each Patient’s Need’

“Because we are returning more staff back to the unit, we are able to make improvements in how staff are employed and at lower costs,” she said. “It’s really looking at each patient’s need and staffing based on those needs rather than doing a one size fits all.”

At least 15 states have privatized prison health-care to curb costs. Corizon, Inc., a Tennessee company that provides private healthcare to more than 400,000 inmates in 31 states, keeps a pool of temporary nurses on its payroll to fill in when an additional worker is needed.

Those nurses are paid regular hours instead of overtime wages and are not offered full-time benefits, helping to keep costs down, said Rich Hallworth, Corizon’s chief executive officer.

“Sometime overtime is required,” he said. “But when we do, what we try to make sure is that the number they are working isn’t excessive. It’s a patient quality care issue. If you are working a 24-hour shift how attentive can you be?”

To contact the reporter on this story: Michael Marois in Sacramento at mmarois@bloomberg.net;

To contact the editor responsible for this story: Jeffrey Taylor at Jtaylor48@bloomberg.net.

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