By Tiffany Rider - Senior Writer

February 14, 2012 - When John Molina earned his juris doctorate degree from USC in 1989, he received an offer to join a firm in Century City.

“I would have been the number 75 person on their masthead, or I could have been number two at Molina,” he said. Molina decided to ask his father, Molina Healthcare Inc. founder C. David Molina, if he could stay on with the family business.

“He said, ‘If you pass the bar exam, you can stay.’ I actually had to pass the bar exam, but I never practiced.”

Today, Molina serves as chief financial officer at Molina Healthcare by overseeing all corporate development and financial functions of the business. The company went public in 2003 (MOH on the New York Stock Exchange), expanding its operations from four to 16 states and more than doubling the number of Medicaid patients it covers.

Molina’s community involvement includes his membership on the California State University Foundation Board of Trustees, the Long Beach Convention and Visitors Bureau Board of Directors and the California State University, Long Beach (CSULB) Board of Governors. He is also the vice chair of the Aquarium of the Pacific Board of Directors, and was appointed to the Federal Reserve Bank Los Angeles Branch Board of Directors in March 2011.

A Long Beach resident, Molina is a product of the local education system, from elementary school through his undergraduate studies in economics at CSULB. In this interview, Molina discusses healthcare reform, weighs in on a variety of local issues and describes his passion for the International City and its future.

LBBJ: How is Molina Healthcare doing?

Molina: We are doing very well. We continue to expand. We now operate in 16 states, cover 1.7 million people and have about 5,000 employees.

LBBJ: How has the federal healthcare reform act impacted Molina Healthcare?

Molina: Healthcare reform doesn’t really kick in until 2014. If healthcare reform goes in as originally passed – which is debatable now because the Supreme Court is going to rule on various pieces of it – 15 million more people who are currently uninsured are going to get covered through the Medi-Cal or Medicaid programs, which is the market that we look at. There are probably another five to 10 million people whose income is less than 300 percent of the federal poverty level who can get covered through the insurance exchanges. The folks that are at about 200 percent or 250 percent less than the poverty level, again, that’s the market that we address. So this would potentially be a very big expansion.

Now, even without healthcare reform, there are nine million people who are covered both by Medicare and Medicaid. These nine million people are the most expensive folks to cover. They are in uncoordinated care right now, and they are really what’s behind a lot of the budget deficits and the increase in state and federal spending for health programs. So the states and federal government are looking to health plans like Molina to improve access and lower the costs. That is, again, a large market. Although there’s only nine million people, that’s $300 billion in annual spending. So California is looking to move those folks into coordinated care systems starting in 2013.

LBBJ: What about other states?

Molina: We also operate in Michigan, Washington and Ohio, which are right behind California in terms of getting programs up. Over the next couple of years, even without healthcare reform, taking care of what we call the “dual eligibles” will be a very important part of what Molina does, as well as opening up more clinics.

We have 22 clinics today in three states – California, Washington and Virginia. We anticipate opening another 15 in 2012 ... in California, New Mexico, Texas, Florida and Ohio.

The interesting thing about healthcare reform is that it was mostly insurance reform – giving people access to coverage. It didn’t do a whole lot to address the shortage of physicians.

LBBJ: Just to clarify what you mean by “shortage of physicians,” these are physicians who take Medicare and Medicaid patients ...

Molina: There’s a shortage of physicians across the board, but it is especially difficult because Medicare and Medicaid tend to pay lower than your commercial insurance.

LBBJ: So what really needs to happen is a reform of the pay scale that physicians receive now, and what they need to receive in the future?

Molina: We’ve got to figure out how to handle that.

LBBJ: Let’s talk about the recent purchase of the ARCO building in Downtown Long Beach. How has it been for Molina Healthcare?

Molina: The purchase is terrific. We’ve been in this building for a number of years, so we had built a great relationship with the [previous owners] Swigs. We were very happy to have a transaction that I think went well for both parties.

LBBJ: What are your plans for the building?

Molina: We’re looking to do a few things. First of all, with Molina’s growth plan over the next year to 18 months, we’ll continue to build out some of the vacant space that’s here. We’re looking at putting in a gym for folks on the 1st floor, and probably an area for receptions on the 15th floor.

LBBJ: In addition to your role at Molina Healthcare, you serve on the Los Angeles Board of the Federal Reserve. Since accepting the position, how has your experience been serving on the board?

Molina: Being on the Federal Reserve has been a wonderful experience. It’s a very diverse group that is on the board with me. We have [chairman Keith Smith], the CEO of Boyd Gaming from Las Vegas, so we get to learn all about how the gaming industry works. We have Andy Sale. Andy is an auditor for [Ernst & Young]. He’s also the auditor who does the Golden Globes and the Oscars. So we get to see Andy when he’s not dressed in a black tie. So it’s a wonderful, diverse group. We talk about the Southern California and Vegas economy, from San Diego up to Santa Barbara. There are bankers and folks from aerospace. We also get to peek behind the curtain, so to speak, and understand how the Fed looks at things and what their resources are.

LBBJ: Let’s talk about some things happening locally. Do you have any comments on the recently approved Downtown Plan?

Molina: I do. I think that overall it was a good thing. My wife and I invested in the property at 6th Street and Pine [Avenue] back in 2005, when it was going to be residential. If the Downtown Plan had been in place back in 2005, that would have been built and sold. But because it wasn’t – I think it stopped about a block south – we had to go through a very long and arduous process to get it approved. By the time it got approved, the economy collapsed. So I think it will help.

I know there’s a great amount of concern that people will be displaced, that developers are going to run amok. I don’t think that’s the case. Developers are not going to come in and build things unless there is a demand. It’s not like field of dreams: If you build it, they will come. You’ve got to have the demand ahead of time. So I think what you’re going to see is people come in and build things that fit within the community. If we learned anything, we learned that the downtown residents are a very passionate group. I think that they will not welcome things that don’t fit in with the fabric of downtown.

LBBJ: Do you support the decision to eliminate redevelopment?

Molina: I don’t support the elimination of redevelopment. There are an awful lot of good things that redevelopment has done for us. There are more things that it could have done for us. But I think it was sacrificed so that they could redirect the money.

LBBJ: What is your opinion of the council’s vote against the second+pch project?

Molina: We live close to second+pch. We live in Naples. So I think that everyone would like to see a quality development at 2nd Street and Pacific Coast Highway. I think the challenge is who gets to define what a quality development is and how you do that. I am hoping that the parties that are involved – both those that were in favor and the owners/developer – can regroup and come to a compromise that people will like. I think it’s inevitable that there will be increases in traffic. The irony is that when the 7th Street [Bridge] was closed, that traffic was mostly diverted down to 2nd Street. You had increased volumes already, and you didn’t get a lot of complaints. So I don’t know if the traffic issue is real or not, but you can’t put something more on that property without giving up something. But I also feel for the folks that own the property, who spent a lot of time and money, and basically got shut out. I think that there is a compromise in there somewhere; it’s just a matter of who’s going to take the first step toward the middle.

LBBJ: How do you think developers look at Long Beach? Do you think they see Long Beach as a business-friendly city?

Molina: I don’t really know a lot of developers. I think that, having heard the dialogue and discussion on both sides, you have an awful lot of people who say Long Beach is not business friendly because it’s in their interest to say that. They want less regulation. Our experience with the city has been that the city staff is very aware of their responsibilities. They want to do the right thing. They want to improve the city. But they also want to stay within the guidelines they’ve been given.

LBBJ: How well situated do you think today’s Long Beach economy is for the future?

Molina: I think the Long Beach economy is very well situated. The Port [of Long Beach] continues to invest. As the economy picks up, more and more goods are going to go through the port. That’s a double-edged sword because it does cause pollution. They’re doing a wonderful job creating a green port. It’s kind of like going back to second+pch. If you want to improve things and make them bigger, there’s a tradeoff. I have asthma. My daughter has asthma. I get those folks. I get those complaints. On the other hand, it’s going to happen somewhere regardless. It’s one of the things I love about Jerry Schubel at the Aquarium of the Pacific. Jerry never talks about protecting the environment at the expense of people. He said it’s not an either-or. People aren’t going away. The port’s not going to go away. If you stop growth of a business, if you stop growth of the port, it will die. So the question is, how do you allow it to grow and expand, and minimize the downside. Some of the things they’re doing with the Clean Trucks program and [adding] more trains is the right thing to do.

We’ve got great schools. I’m a product of the Long Beach school system, from Kindergarten through college, and proud of it. You can’t find a better group than Chris Steinhauser, Eloy Oakley and King Alexander. It’s something we should be really proud of. All of those systems are doing great. We’ve got the Cal State system headquarters here. Those are a lot of great jobs.

Healthcare is another big industry for us here in Long Beach. We’ve got St. Mary’s and Memorial and SCAN Health Plan and Molina. And the tourism – nobody in the country does a better job than Steve Goodling. Once a week, my wife and I get an e-mail from Steve that is just right on. He does a great job.

We need that one more industry that can take up for the dip at Boeing. The port has helped a lot, healthcare, tourism, but there’s still that void. So how do we attract that industry that has spinoff work? That’s the real question.

LBBJ: How do you envision Downtown Long Beach 10 years from now?

Molina: I wouldn’t limit it to downtown. Every grand city has a vibrant downtown. Just think about the cities you want to visit, whether it’s New York or San Francisco or San Diego’s Gaslamp District, or Paris or Rome. It really is the buzz of the city. Ten years from now, we’re going to have that. We’ve already got the convention center, and with the stuff they’re doing now with the arena to make that into a bigger ballroom, that’s great, along with the investments that some of the hotels are making. Pine [Avenue] will get there. East Village is doing great. The folks in Bixby Knolls are doing great. We want to connect the various parts of the city so that, although the heartbeat may be in downtown, it goes everywhere. I think that we really need to figure out how to do a better job connecting the city. Whether you’re talking about the Cambodian corridor on Anaheim [Street], or the great murals over on the Westside that a lot of people in Long Beach don’t even see, to California Heights, El Dorado Park ... Right now, we see those almost as islands. So the question is how do we connect them.

LBBJ: If you could add one business to downtown, what would it be?

Molina: I would love to see a Google or a Facebook or something really creative like a gaming company; something that’s going to bring a bunch of 20- to 30-year-olds to work everyday in downtown. That would be really cool. That would provide a nice shot in the arm for all the local businesses, add some character and, frankly, a nice shot in the arm for the economy. If you do something like that, you’ll get your favorite restaurant to open up. We don’t want Google; we want the next Google.

LBBJ: If you could be the mayor of Long Beach today, what would be your first action?

Molina: Ask my wife what the hell I should do. She’s the smartest person I know. First of all, I think the mayor and the city council have done a very good job at getting this city through a very tough past four years. So I’m not sure there’s a lot I would change, because people say, when you change things, that you’re changing them because you’re criticizing them. So I want to start off with that.

I think that, as the most culturally diverse city in the country, we need to do more to connect the people. We’ve been known as the International City for a long time, with the port and the people. The strength of Long Beach has always been the people. So it’s really figuring out how to marshal the brains, talents and hearts of the citizens of this town. I’ve lived here my whole life, so it’s funny that, as big as Long Beach is, I still refer to it as a town because it really does have a small-town feel, in many cases. But there are a lot of wonderful things going on, and you just need to make sure that these things bubble up and get spread out.

... I think we need to get to the point where we view our leaders not necessarily as the politicians. The politicians are a component of that, but the real leaders of our community are the ones who are good neighbors, who are starting their own businesses and employing people, who are making sure the parks are clean ... who are going to the local arts performances, who are supporting Long Beach State basketball and Long Beach City College football – because that’s what makes a community good – they have all these things going on that people participate in. Being a leader doesn’t happen on Tuesday night from 5 to 9 [p.m.]. That’s just a component of it. Those leaders are probably there right now, we just don’t give them the recognition.