CALIFORNIA: DEPARTMENT OF CORPORATIONS OVERSIGHT QUESTIONED
Not only the appropriateness, but the ability, of theThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
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).