CALIFORNIA: DEPARTMENT OF CORPORATIONS OVERSIGHT QUESTIONED

      Not only the appropriateness, but the ability, of the
 California Department of Corporations to oversee managed care in
 the state is being challenged, BUSINESS INSURANCE reports.  "Some
 politicians and health care analysts suggest" that the state
 Department of Insurance, which currently "regulates health
 insurers," would be a better choice for overseeing the managed
 care industry.  Others call for the creation of a new agency. 
 The Department of Corporations was "given its mandate" to
 regulate managed care plans in 1975, "long before the explosive
 growth in managed care."  Department of Corporations detractors
 say Keith Paul Bishop, who was appointed to head the department
 approximately four months ago, and the recent appointee to
 assistant commissioner, Gary Hagen, formerly of Foundation Health
 Corp., are soft on the managed care industry.  In addition, the
 selection of the Joint Commission on Accreditation of Healthcare
 Organizations (JCAHO) and California Medical Association
 subsidiary Institute for Medical Quality (IMQ) to review HMOs was
 criticized.  Opponents alleged that IMQ has a conflict of
 interest and JCAHO is inexperienced in HMO evaluation (see AHL
 8/13).  Critics of the Department of Corporations also cite its
 opposition to legislation that would mandate the annual release
 of quality analysis for HMOs in the state, a move that is
 supported by consumer groups and the HMO industry.    
      HELP?!:  State Rep. David Knowles (R), chairman of the
 Assembly Insurance Committee, said, "There is a strong perception
 that the Department of Corporations is an inadequate department
 to continue the licensure and regulatory oversight of HMOs in
 California.  That's strongly felt, I believe, by Democrats as
 well as Republicans."  Currently, six state agencies are involved
 in monitoring health care in California.  A bill introduced but
 never acted on in the last legislative session, would have
 transferred "licensing and regulatory responsibilities" for
 "health care service plans" to the insurance department.  Similar
 proposals are expected to be introduced in the next session. 
 While Knowles charged that a move to the Department of Insurance
 would be "premature," there is support for consolidating the
 responsibility for HMO oversight.  Steve Richter of Watson Wyatt
 Worldwide in Los Angeles, said, "I could see some logic in having
 all health care plans regulated by the same organization."  The
 Department of Insurance responded that a shift of
 responsibilities was an "intriguing prospect ... but this is a
 call the Legislature is going to have to make."  A Department of
 Corporations spokesperson defended the department's ability,
 saying, "There is no reason to believe the Department of
 Insurance or any other entity can do the job better than the
 Department of Corrections does."
      ANYBODY?:  Peter Boland, health care policy analyst and
 president of Berkeley, CA-based Boland Healthcare Inc., said,
 "I'm not sure either one of them has sufficient expertise to do
 an adequate job in relation to a rapidly changing marketplace. 
 Both departments are going to have a hard time keeping up with
 the pace of changes in the marketplace.  The marketplace is
 basically outstripping the capacity of regulatory institutions to
 do an adequate job."
      SPEAK OUT WITH YOUR VOTE:  California voters will voice
 their opinions in the November elections, when two HMO regulation
 ballot initiatives, Propositions 214 and 216 (see AHL 9/19), will
 be decided (Greenwald, 9/23 issue).