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California Psychiatrists Paid $400,000 Shows Bidding War

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Photographer: Noah Berger/Bloomberg

Inmates wait for appointments at a prison's mental health clinic. Close

Inmates wait for appointments at a prison's mental health clinic.

Photographer: Noah Berger/Bloomberg

An inmate sleeps in a medical cell at prison in California. Close

An inmate sleeps in a medical cell at prison in California.

Photographer: Noah Berger/Bloomberg

A correctional officer stands watch at a prison in California. Close

A correctional officer stands watch at a prison in California.

Mohammad Safi, a graduate of a medical school in Afghanistan, began working as a psychiatrist at a California mental hospital in 2006, making $90,682 in his first six months. Last year, he took home $822,302, all of it paid by taxpayers.

Safi benefited from what amounted to a bidding war after a federal court forced the state to improve inmate care. The prisons raised pay to lure psychiatrists, the mental health department followed suit to keep employees, and costs soared. Last year, 16 California psychiatrists, including Safi, made more than $400,000, while only one did in the other 11 most populous states, according to data compiled by Bloomberg.

America's Great Payroll Giveaway: a Six-Part Series

The jockeying between agencies for the same doctors demonstrates a payroll system run amok and chronic mismanagement, said Jeffrey Sonnenfeld, senior associate dean at the Yale University School of Management and founder of a training institute for chief executive officers.

“Even though this all took place in California, such apparent recklessness is almost too over the top for Hollywood,” Sonnenfeld said. “These irresponsible public officials have artificially constrained the market with an unnaturally limited supply pool, either due to laziness, incompetence, corruption or all of the above.”

17-Hour Days

Safi’s compensation was almost five times as much as Governor Jerry Brown’s last year. The psychiatrist was paid for an average of almost 17 hours each day, including on-call time, Saturdays and Sundays, although he did take time off, said David O’Brien, a spokesman for the Department of State Hospitals, formerly the Department of Mental Health. Safi is under investigation by the department, and he was placed on administrative leave July 12, O’Brien said in an e-mailed statement.

“I made so much because I work a lot,” Safi said in a brief interview at his Newark, California, home.

The comparatively high pay of mental-health physicians in California is among the findings of a data review in which Bloomberg compiled payroll records for 1.4 million employees of the 12 largest states. The compensation of public workers is far greater in California, from prison operations to health care, base salary to overtime, the data show.

Brown, who granted state workers collective-bargaining rights during his first tenure as governor more than three decades ago, has sought to reduce costs by limiting pensions for new employees, while leaving most retirement benefits for current workers intact. Last year, the 74-year-old Democrat ordered an overhaul of the mental health agency aimed at reducing overtime and the use of outside staff.

Bidding War

The 2007 bidding war for psychiatrists in California took a human toll, said Michael Bien, a lawyer for prison inmates who successfully sued California over mental-health care. A mental hospital drained of such specialists was the scene of two suicides within three months of the salary increases at prisons. The state settled a lawsuit filed by one family for $975,000 without admitting liability.

Management failings by state officials were to blame, Bien said. While the salary increases that enticed psychiatrists to leave mental hospitals for higher-paying prison jobs were court- ordered, it was the state that determined who would get pay raises and created the disparity, according to Bien and a Jan. 30, 2007, report filed by Michael Keating, a court-appointed monitor of the prison mental-health system.

‘Tremendously Disruptive’

“What they did was tremendously disruptive to the department of mental health,” Bien said. “Why would anyone not take a salary increase of 50 percent or more?”

The pay boosts caused staff costs for mental-health practitioners to rise elsewhere, said Stephen Mayberg, head of California’s mental health department in early 2007, when the raises started. Psychiatrists are among the highest paid employees in California, Florida, Georgia, Michigan, New Jersey, New York, North Carolina and Pennsylvania, data show.

“The psychiatrists were working with the same patients, just in different systems, and followed the higher salaries, putting the systems in conflict,” Mayberg said in an interview. “With higher salaries, recruitment across the nation became easier. Of course that had a ripple effect on other states.”

Most Generous

Even in California, the most generous state among the country’s 12 largest, psychiatric compensation stands out, data compiled by Bloomberg show. Last year, 93 California psychiatrists made more than $300,000, a level matched by only 12 in the other states, according to the data.

Cliff Allenby, the 76-year-old acting director of the state hospitals department, declined to be interviewed, said O’Brien, the agency’s spokesman. Allenby has worked for the state for about 42 years, under seven administrations, O’Brien said.

Allenby has retired and returned to run the hospitals department part-time, said his son Craig Allenby, a prison guard who earned $106,957 last year, according to state records.

“Instead of paying a director a full salary, they’re using him to temporarily fill the job,” Craig Allenby said. “They’re able to fill the job for less and draw on his experience to work through some of the big problems they have there.”

Safi worked an average of more than 76 hours a week in addition to his regular shifts, according to records provided by O’Brien. Four other highly-paid mental-health department psychiatrists worked an average of 24 extra hours, prompting critics to question the quality of care.

‘Watching Quality’

“At some point someone becomes ineffective,” Bien said. “You have to wonder if someone is watching quality. Who is managing Dr. Safi to make sure he’s actually functioning well enough?”

Stuart Bussey, president of the Union of American Physicians and Dentists, which represents California’s psychiatrists, said he doesn’t believe the doctors are fatigued from the extra hours, which include time when they’re sleeping.

“They’re not clinic hours,” Bussey said. “You’re not working the same intensity as you would during regular clinic days, and I don’t think there’s a fatigue issue.”

The bidding war’s effect on the state’s mental-health costs is evident in the Bloomberg payroll data, which shows that from 2005 to 2008, the median income for California’s government- employed psychiatrists rose 58 percent to $251,060. Psychiatrists in the U.S. earn a median income of $194,748, according to salary.com, a website that tracks salaries for various professions using data collected from employers.

In 2006, when he worked half a year, Safi earned $90,682. In 2008, his next full year of state employment, he got $236,108.

‘Aren’t Enough’

“They ask me to work because there aren’t enough people, and then they send me home,” Safi said in the interview. He said the state has forced him to take leave and declined further comment.

An increase last year in patient capacity at Safi’s mental- health facility added pressure on him to put in more hours, said Ed Caden, his lawyer. As chief psychiatrist, Safi was required to cover shifts when others wouldn’t and was allowed to do some of the work from home, phoning in needed prescriptions to nurses, Caden said.

Last year, in addition to his regular salary of $273,950, Safi earned $548,352 in extra-duty pay, working 3,990 additional hours as the “medical officer of the day” at the prison mental-health facility in Soledad, about 130 miles (209 kilometers) south of San Francisco. His home in Newark, about 100 miles north of the prison, is valued at $730,000, according to the Alameda County assessor’s office.

Reaping Rewards

Safi isn’t alone in reaping rewards from court intervention and the competition for mental-health professionals.

Husband-and-wife psychiatrists Joginder Singh and Mohinder Kaur earned a total of $4.7 million from 2005 through 2011, according to California payroll data. In an interview outside his Coalinga home, Singh said he retired from a mental hospital in Napa in 2006, and returned the next year to Coalinga State Hospital, where he was appointed medical director, for the higher pay after the court intervened.

“When the pay scales went up, that’s when I joined as medical director,” Singh said. “If you join the job again, and work for at least three years, then you are entitled to an enhanced pension.”

In 2006, Singh earned a base salary of $145,965. In 2008, his first full year back, his base was $270,258, an 85 percent jump. Kaur, who also retired in 2006 and then went to work at Coalinga in 2007, saw her base pay almost double, to $252,796 from 2006 to 2008, state records show.

Better Hours

The two were married in India and immigrated to California in 1991, Singh said. Until then, he had practiced internal medicine for 20 years. He switched to psychiatry for the better hours and started working for the state in 1995, Singh said.

Bussey, the union president, said higher salaries were needed to get good doctors to take difficult jobs.

“You have to get someone to leave a nice cushy office in San Francisco where they’re making $233,000, and go out to the desert and deal with rapists and armed robbers,” Bussey said in an interview. “You have to give them an incentive.”

Psychiatrists receive the same medical training as other physicians and are typically paid salaries matching that expertise. Many at the top of public payrolls in California, Pennsylvania, Michigan, Ohio and New Jersey attended foreign medical schools.

On Call

Each of the five states has rules requiring mental-health agencies to have a trained medical therapist on call at all hours. That allows psychiatrists willing to put in extra shifts to earn more than other employees.

Some states have been able to hold down compensation for the specialists, data compiled by Bloomberg show. In Michigan, only 12 psychiatrists made more than $200,000 last year, led by Laurence Co at $301,996. Unlike California, where on-call hours are paid at a straight hourly rate, Michigan’s Community Health Department psychiatrists are paid one hour for every five hours they’re on-call, said Angela Minicuci, an agency spokeswoman. Through Minicuci, Co declined to comment.

The events that led to escalation of California’s psychiatrist pay started in June 2006, when U.S District Judge Lawrence Karlton brought the mental health department into a lawsuit that had already led the court to take over prison mental health services, after determining that care was so poor it was unconstitutional. The mental health department provided psychiatric care to inmates in state hospitals and some prisons.

Vacancies Increased

In response to the order, the department was required to recruit more psychiatrists. Yet psychiatrist vacancy rates increased, and Keating, the monitor, asked the state to develop a plan for salary increases to attract more.

The state proposed that a chief psychiatrist’s pay rise to $24,267 per month from $13,311. Left out of the plan were psychiatrists working at mental hospitals including Atascadero, Coalinga and Patton, and mental wards inside prisons at the California Medical Facility in Vacaville and Salinas Valley State Prison in Soledad.

In a Dec. 18, 2006, court filing, Bien, the attorney representing the inmates, said psychiatrists would follow the pay raise to the prisons department because it wasn’t applied evenly.

“In a system consistently plagued by clinical staff shortages, it is not only imprudent, but reckless and indifferent, to implement a salary proposal that will inevitably exacerbate staffing difficulties for inpatient psychiatric programs,” Bien wrote, pressing for a salary increase for all mental health department psychiatrists who worked with inmates.

Not ‘Justified’

The state agreed to include the wards in Salinas Valley and Vacaville though not the hospitals. Such a pay raise would go beyond the court’s purview and “cannot be justified,” the state said in a Jan. 17, 2007, response to Bien’s request.

The next day, three mentally ill inmates were denied admission to Atascadero State Hospital as the departure of psychiatrists left those behind with caseloads of more than 100 patients each, according to a Jan. 23, 2007, letter to Keating by the mental health department. A previous court order required a ratio of one psychiatrist for every 15 patients suffering from the most acute mental health issues.

“It took six months to get pay raises at Atascadero and the other hospitals,” Bien said in a telephone interview. “In the interim, lives were lost.”

Patient Suicides

In the first three months of 2007, two patients at Atascadero committed suicide. Matthew Miller hanged himself from his bedroom locker in February, and Roland James did the same in March, according to court documents in a lawsuit filed by Roland James’s mother on behalf of the four sons the 43-year-old left behind.

“His sons are doing the best they can, trying to live without their father and make good decisions,” James’s mother, Christine James, said in an interview. “Your son isn’t supposed to die before you.”

Michael Lisiak, James’s psychiatrist at Atascadero, told state investigator Bill Swift that the hospital was understaffed.

“Our pay was low and we were losing docs rather than gaining physicians,” Lisiak said according to Swift’s report on the James suicide. “We had doctors running around putting out fires.”

$975,000 Settlement

California settled the lawsuit for $975,000 last year without admitting liability. O’Brien said the state generally doesn’t comment on litigation.

Efforts to reach Lisiak for comment, including phone calls and a visit to his home in Pismo Beach, California, were unsuccessful. Lynda Gledhill, a spokeswoman for the California’s attorney general’s office, which defended the state in the lawsuit, also declined comment.

Understaffing is a common problem in California’s mental hospitals and is one of the reasons state psychiatrists make so much, said Singh, the former medical director at Coalinga State Hospital. When pay rose at psychiatric facilities operated by the prisons department in 2007, it was only natural mental- health professionals would follow the higher salaries, he said.

“Pleasant Valley Prison and Coalinga Hospital, they are next to each other,” Singh said. “If the prison system offers more money, then people will move from the hospital to the prison.”

450 Patients

When Singh came out of retirement to take advantage of the higher pay, he was the only psychiatrist at Coalinga hospital for its 450 patients, he said.

By April 2007, Atascadero hospital had a 70 percent psychiatrist vacancy rate, according to a court document filed by Bien. In June, Karlton ordered the state to raise pay for psychiatrists at mental hospitals.

The rising salaries “stopped the migration of psychiatrists from mental health to the prison system,” said Mayberg, the former mental health department director. “We tried to make sure the systems weren’t competitive with each other after that.”

Psychiatrists continued to clock extra hours that boosted their pay well beyond their base.

America's Great State Payroll Giveaway: Read Bloomberg's full reporting on how out-of-control pay burdens states around the country.

Other states also pay extra to keep psychiatrists on duty at all hours. The highest-paid state employee in Ohio last year who didn’t work for a public pension fund was Zinovi Goubar, who earned $318,261 with $164,820 coming from 2,747 hours in addition to his 40-hour work week, according to data compiled by Bloomberg and Trudy Sharp, a spokeswoman for the Ohio Department of Mental Health. Goubar didn’t return phone calls seeking comment.

Less Expensive

Placing physicians on call is less expensive than hiring more, and the state monitors performance to ensure quality, said Mark Hurst, Ohio’s medical director for state hospitals.

California’s O’Brien also said relying on the state’s own psychiatrists rather than outside contractors is cost-effective. A mid-step California staff psychiatrist earns $122.73 an hour, O’Brien said. A contracted doctor can earn up to $180 an hour, he said.

Bussey, the California union president, said the state pays more for its psychiatrists because it’s more focused on controlling contractor costs than other states, and it’s more expensive to live there.

A nationwide shortage of psychiatrists is helping raise their salaries everywhere and is one reason why so many of the highest paid are foreign-trained, Bussey and Hurst said.

Hurst said the long hours don’t affect care.

“There are people who can do that and there are people who can’t,” Hurst said. “We first trust people to monitor that internally.”

To contact the reporters on this story: Freeman Klopott in Albany at fklopott@bloomberg.net; Rodney Yap in Los Angeles at ryap@bloomberg.net; Terrence Dopp in Trenton at tdopp@bloomberg.net

To contact the editor responsible for this story: Jeffrey Taylor at jtaylor48@bloomberg.net

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