CALIFORNIA: INITIATIVES’ OPPONENTS RELEASE HMO STUDY

      A group opposing California's upcoming ballot initiatives
 that aim to tighten regulation of the managed care industry
 released a study last week showing that the measures would cost
 the state "between 27,000 and 60,000 jobs and lead to sharply
 higher medical insurance premiums," LOS ANGELES TIMES reports. 
 The study, funded by Taxpayers Against Higher Health Costs, and
 conducted by Washington-based Barents Group, an economic research
 unit of KPMG Peat Marwick, is one of the "first shots in what is
 expected to be an intense battle over two competing versions of
 HMO regulatory initiatives" on the November ballot.  The study
 found that the measures could raise medical premiums "as much as
 14.5%" and cost employers in the state "between $1.3 billion and
 $2.7 billion" next year.  David Gross, a Barents health economist
 who headed the study, said, "The initiatives would severely
 restrict health plans' use of tools that reduce costs and control
 quality."  
      TAKING SIDES:  The HMO industry said the measures, which
 supporters claim would "protect against excesses by HMOs"
 including "gag" orders and exorbitant physician profits, would
 "dramatically expand government's role in health care and impede
 HMOs' ability to control health care costs."  But supporters of
 Proposition 216 and Proposition 214 said consumers need the
 measures to protect them from "abuses" such as "fees imposed on
 hospitals that restructure and on" other health care mergers. 
 Robin Kane, a spokesperson for Proposition 214, called the
 study's results "outrageous," adding that it "failed to account
 for [a] significant difference between the two initiatives" in
 terms of costs.  Harvey Rosenfield, an author of Proposition 216,
 said, "It's the same old story of the powerful HMOs and insurance
 companies trying to distract voters ... with a phony study
 concocted by industry hacks and pseudo-economists."
      DUPLICATE:  The HMO industry said the two ballot measures
 are "unnecessary" because they partially duplicate "existing
 regulations or pending legislation" that include a ban on gag
 clauses.  HMO executives said "the Legislature, not the
 initiative process, is the proper arena to regulate the industry"
 (7/25).