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Brown asks Saxton to resign after years of controversy and Portland Tribune article on secret smear plan

OREGON HEALTH AUTHORITY - Oregon Health Authority Director Lynne Saxton resigned at the request of Gov. Kate Brown over a secret smear plan and enrollment chaosFor some, Gov. Kate Brown's removal of Oregon Health Authority director Lynne Saxton happened with surprising rapidity.

Others are wondering why it took so long.

Saxton's departure after more than two years at the helm of the 4,000 person agency leaves a slew of critics and problems in her wake.

The agency has lost a large number of capable staff and managers under Saxton, leaving an agency that many feel is ill-equipped to tackle enrollment problems and needed reforms to the Oregon Health Plan that serves more than 1 million low-income Oregonians.

While the final straw for Saxton's departure was a controversial communications plan that many saw as unethical, there had been a drumbeat of criticism before that — over everything from enrollment problems to a new round of tech failures, to a failure to grasp the vision and direction of Oregon's 2012 Medicaid reforms.

"I don't think she necessarily shared that vision," Rep. Mitch Greenlick, D-Portland, said in the wake of Saxton's resignation. Under Saxton, he said, "The culture of the Oregon Health Authority had gone wrong."

Saxton and her aides did not respond to a Portland Tribune request for an interview. Gov. Brown's office also declined to comment, citing the personnel decision of having requested Saxton's resignation on Aug. 8.

Communications plan

Saxton resigned following a Portland Tribune article describing an OHA plan that called for influencing lawmakers by planting negative articles about FamilyCare, a nonprofit tasked with delivering health care to members of the Oregon Health Plan.

One aspect of the plan was to find HIV patients to complain to the press about the company, and use intermediaries to disguise the state agency's role — allowing it to maintain a false appearance of neutrality.

Why the cloak and daggers? FamilyCare and OHA had been locked in a rate dispute in court, one that Saxton's leadership team considered a threat to the agency's "reputation," documents show.

Saxton greeted the plan approvingly, but in the wake of the article she publicly blamed her staff for raising ideas "in the heat of litigation."

In reality, Saxton directed the plan be prepared when no court cases were active, just one business day after signing a mediation agreement to act in "good faith" toward FamilyCare.

A former nonprofit executive with scant health care experience, Saxton was initially envisioned as a short-timer.

In October 2014, as controversy intensified over the appearance of influence-peddling by his first lady, Cylvia Hayes, Kitzhaber emailed Saxton asking her to consider taking the job "for a year or so."

She agreed, and Kitzhaber named Saxton in December, then resigned in February 2015. In March, the new governor, Brown, submitted Saxton for confirmation.

Saxton came in with a strong interest in mental health as well as children but scant government experience, little knowledge of Medicaid and no experience running a large agency.

She brought on personal acquaintances who also lacked experience overseeing a Medicaid program such as Mark Fairbanks, a former hospital executive, and BethAnne Darby, a former lobbyist for the Oregon Education Association.

Micro-managerial style fueled brain drain

Saxton and her team soon concluded they'd inherited an agency that had become a bloated fiscal mess. Saxton launched a series of layoffs and reorganizations that removed what some described as key personnel.

She also sought to reduce the number of people enrolled in the Medicaid-funded Oregon Health Plan, which is her agency's primary function.

"She expressed in her very first public meeting that she thought her job was to reduce the number of people on Medicaid," recalled Greenlick.

Current and former OHA staffers say she could be gracious and warm personally, but also dictatorial and bullying.

Staff members who questioned Saxton's initial moves in an early staff meeting received reprimands, and over time managers began to avoid eye contact with her out of fear, said Dr. Ken Rosenberg, who was the chief science officer for the agency's public health division before retiring in June.

Many capable managers left the agency voluntarily, disillusioned by the cuts and by the style of Saxton's leadership team, he added. "Everybody who could leave, did ... The morale is very low."

Saxton and her team displayed an extreme micromanagerial style, several people said.

Among other things, Saxton's team insisted on reading and approving the text of every report and research paper before publishing — to ensure control over the agency's message. Over time, the task was so draining that staff was urged to do less publishing, Rosenberg said. "She was a big fan of centralizing control."

Secrecy emphasized

This need for control extended to information as well.

In early June, Saxton's Medicaid director, Lori Coyner, gave notice of her intent to leave the health authority. Saxton's team, however, decided to keep the decision a secret until after the legislative session ended in Salem. The goal: to avoid unnerving lawmakers who had developed significant questions about the health authority's budget.

Coyner could not be reached for comment late last week, but the account was confirmed by informed sources. Coyner's departure was announced in mid-July, after lawmakers had gone home.

Saxton's secretive style extended to records, too On several occasions since last year, the agency was later found to have improperly withheld records requested by the Portland Tribune, including, initially, the communications plan about FamilyCare.

Others complained of secrecy at the agency as well. In June, a group representing the insurance plans serving the Oregon Health Plan blasted Saxton's agency for " lack of transparency" in an important behavioral health collaborative that was a Saxton priority, saying it provided for "little to no public process."

Seeds of destruction

Eventually, Saxton's control-oriented style bled over into the FamilyCare rate dispute, contributing to her downfall.

FamilyCare is one of 16 coordinated care organizations, or CCOs, set up by state reforms to act much like insurance plans or HMOs to provide low-income patients with health care under the Oregon Health Plan. FamilyCare has been the most vocal CCO, often accusing state officials of incompetence or seeking to do the nonprofit harm, including in the pending litigation.

The communications plan was prepared as FamilyCare and the state were entering mediation over whether OHA is giving FamilyCare a fair rate of reimbursement for its care of low-income Medicaid patients.

Saxton and her top aides became involved personally in the dispute in several ways:

• Saxton called for the communications plan and reviewed drafts.

• Fairbanks, the former hospital executive who became Saxton's second-in-command, personally managed the work of the actuarial firm tasked with setting rates, documents show.

• More recently, Saxton put Darby, the former education lobbyist, in charge of the complex recertification process by which CCO's renew their contracts with the state.

But the actuarial process used by the health authority was unfair to FamilyCare and fundamentally flawed, escalating the tensions that led to Saxton's downfall, according to Greenlick, who heads the House Health Care Committee.

And the secrecy did not help. Sen. Betsy Johnson, D-Scappoose, said the plan and similar moves show that problems at the health authority go beyond Saxton, including a culture of secrecy and spin that she considers "unconscionable."

"I think there's a huge problem at OHA," Johnson said. "It appears to me that there is a layer of middle managers, especially in the communications section, who are happy to put words in the mouth of the agency with little or no oversight or accountability."

In the wake of Saxton's departure, Greenlick and others say the agency is in desperate need of a leader who understands health care and can fix the problems that arose under Saxton.

But given the state of the agency and its massive responsibilities, "It's be going to be very hard for someone to right that ship," Greenlick said.

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