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By Henry A. Barrios / The Californian
BY JAMES BURGER AND RACHEL COOK Californian staff writers firstname.lastname@example.org, email@example.com
Paul Hensler's tenure as CEO of Kern Medical Center started with great hope he'd turn the hospital's troubled finances around and ended in great controversy.
When he assumed the helm in April 2007, the county-owned hospital was not only struggling financially but dogged by conflicts between the Kern County Board of Supervisors and doctors over salaries, and plagued by disorganization.
Hensler told The Californian he'd been pointedly asked upon accepting the position, "Why would you want to do this?"
His answer, he said, was that he liked a challenge.
"I thought of a friend of mine who does mountain climbing all over the world -- big-league stuff -- I wonder why he would want to do that, " Hensler told The Californian.
County leaders believed Hensler could take on that challenge. He'd had more than 30 years of hospital leadership experience including CEO stints at Thornton Hospital, a part of UC San Diego Health System, the University of Southern California Doheny Eye Institute and Holy Cross Medical Center in Los Angeles.
Hensler was, at the time of his hiring, CEO in the San Diego region for Prime Healthcare Management, which owned a chain of eight hospitals.
"He seems to have a vision for the hospital," Kern County Supervisor Mike Maggard said back then. "He is direct and articulate enough that my hope is people will buy into his vision."
Hensler's three-year agreement included a starting salary of $325,000 a year plus a benefits package with $160,500 for retirement, $13,500 for health insurance and a $7,008 auto allowance. The agreement also included an automatic renewal for another three-year term.
A couple years into Hensler's tenure, things looked hopeful.
Hensler said in 2009 that a mix of new funding from the federal government and reforms he had enacted to the revenue flow would return the hospital to profitability that year.
He planned to pay down the debt to the county general fund and, eventually, build a new hospital building.
That July, he announced the hospital made a $10 million profit in the 2008-2009 fiscal year. The hospital's general fund loan from the county was $40 million.
But in early 2010, the hospital's budget slipped into a negative balance.
Hensler angered many in the medical community in early 2012 when he decided not to hire a class of resident doctors for the family practice teaching program -- the first step to closing down the program.
After a passionate burst of opposition from people who credited the program with developing and keeping badly needed general practice physicians here, supervisors ordered Hensler to hire the student doctors and search for a way to move the teaching program out of KMC.
Then in August 2012, the hospital was thrown into temporary panic when supervisors balked at raising the county's loan to the hospital yet again -- casting doubt on KMC's ability to pay its vendors.
The Board of Supervisors ultimately raised the loan limit then and again throughout the next year, resigned to the fact it had limited control over it.
Hospital administrators drew supervisors' ire again in early August of this year when they asked for the loan cap to be raised to $154 million. They questioned the request and vowed to more closely inspect the hospital's finances, but ultimately granted an incremental increase.
The loan balance was $97 million on Aug. 16, according to county reports.
Hensler's compensation has changed over the years.
Hensler's first contract outlined that his salary could be raised through five step levels, with a maximum increase of 5 percent per level topping out at $395,040. He did not seek any step increase until October 2012 because of a freeze on department head increments that started in 2009, according to an April letter to the board.
In April, supervisors voted to amend and extend the county's agreement with Hensler for one year with a base annual salary of up to $395,040.
They also agreed to pay him $132,273.70 for retroactive payment of step advances he had not received in the past but was due under his agreement with county.
The contract said if Hensler was involuntarily terminated, he could collect severance benefits equal to his "base salary multiplied by the number of months" left in his contract. He would continue to receive severance payments regardless of whether he got another job in the following year.
Hensler had about seven months left in his contract.