Editor’s note: Civil Beat is updating its Public Employee Salaries Database for the 2022 fiscal year that began July 1. Click here to see the latest from all state agencies and the three neighbor island counties, as well as all information for prior fiscal years dating back to 2011 and a portal to related articles. We’ll update with City and County of Honolulu data soon.

Some of the highest salaries in state government go to employees of the Hawaii Health Systems Corp., but its officials say the pay is essential to recruit and retain physicians and top administrators.

And they point to far-higher salaries sometimes paid to their contemporaries in the private sector.

HHSC runs a network of medical facilities around the state, with an emphasis on providing services on neighbor islands and in rural portions of Oahu. These include five hospitals on the Big Island and two on Kauai. In 2017, the operation of its three Maui County hospitals was taken over by Kaiser Permanente.

The Maui transition removed about 1,500 people from the rolls of Hawaii public employees, but there are still more than 63,000 government workers. 

Using Hawaii’s public records law, Civil Beat requested salary information from all state and county governmental agencies as of July 1, the beginning of the 2022 fiscal year. We’ve been collecting and publishing the salary data since the news site launched in 2010.

When University of Hawaii football coaches haven’t been the highest-paid public employees in the islands, HHSC physicians have been. As of July 1, five doctors were among the 10 highest-paid government workers.

‘Look At What The Private Sector Is Paying’

Dr. Linda Rosen has been chief executive officer for HHSC since late 2014 and now holds the additional title of president. Her current salary of $387,651 is 25.3% higher than it was two years ago.

She said that raise is the result of a 2018 study that compared the salaries of HHSC physicians and administrators to their counterparts in similar positions on the mainland. MGT Consulting Group established minimum, midpoint and maximum salary levels for various positions.

Many HHSC physicians “were not at the minimum,” Rosen said, adding the low end for her position was $344,000.

The boards of directors for HHSC’s various regions all voted to raise the pay of employees who are exempt from collective bargaining agreements to at least the minimums set by the consultant, she said.

Being the top administrator of a medical network can be far more lucrative in the private sector.

Raymond Vara Jr., president and CEO of Hawaii Pacific Health Medical Group, was paid $2.7 million for fiscal year 2020, according to tax documents. The position of president/CEO of The Queen’s Health System, currently held by Jill Hoggard Green, also paid more than $2 million for the same period, tax filings show.

Rosen is not the highest-paid HHSC employee in the database. As of July 1 that was staff physician Kitty Victoria at $485,000, followed by Lovina Sabnani at $457,406 and Lyric Santiago at $410,000.

And they are not necessarily the highest-paid doctors making the rounds at facilities run by HHSC, which also works with physician groups whose individual doctors are not included in the database. Such is the case with cardiologists Mark Hansen and Carl Juneau, who have now joined physician groups. As of fiscal year 2020, Hansen was listed at $550,000 in the database and Juneau at $475,000.

It’s difficult to recruit and retain top-level physicians — specialists in particular — when the cost of living is so high in the islands, Rosen said.

Another HHSC employee who has advanced rapidly on the pay scale is Dan Brinkman, CEO of the East Hawaii region that includes Hilo Medical Center. He was earning $200,008 in fiscal year 2016 and as of July 1 is up to $350,000, a 74.9% increase over six years.

Most of Brinkman’s adjustments occurred before the salary study. One factor was that he was initially earning less than a regional CEO, since departed, for the smaller HHSC West Hawaii region, Rosen said.

“If you look at what the private sector is paying and what it would take to replace him with somebody as good or better, I think it’s fair,” she said of Brinkman’s salary.

Savings Through Privatization

HHSC generally operates hospitals in parts of the islands that are not attractive to the private sector. When changing demographics made Maui County the exception, the state started looking at the option of privatizing Maui Memorial Medical Center, Kula Hospital and the Lanai Community Hospital.

It wasn’t easy, because it meant the transfer of about 1,400 unionized state workers to Kaiser Permanente in the private sector. A legal battle was finally resolved when the state agreed to offer severance payments and pension benefits to the employees.

In all, about 1,500 employees left the public payroll when the privatization took effect in July 2017, and today the total HHSC payroll is about 30% lower than it was in fiscal year 2016.

Despite the initial outlay of additional money to the employees affected by privatization, HHSC estimates the move has saved the state about $87 million so far.

Rosen said health care has actually improved with the investments Kaiser made. Meanwhile, the company is profiting from its Maui County operations, and one reason is no doubt that it spends less on employee benefits than the state would for union workers.

No further privatization of HHSC facilities is being contemplated, Rosen said. In fact, the reverse occurred a year ago when management of the Yukio Okutsu State Veterans Home near Hilo was transferred from Avalon Health Care to the East Hawaii Region of HHSC after concerns were raised over Covid-19 infections and deaths at the 95-bed facility.

Still, for fiscal year 2022 the Civil Beat database contains 2,177 HHSC employees — far fewer than the 3,520 employees in fiscal year 2016 before the Maui privatization.

Coming soon: A closer look at some of the other state departments in the database, and a first look at Hawaii’s four county governments.