HMO REFORM: All in the Governor’s Hands Now
The Legislature Friday finalized a package of bills that would overhaul how managed health care is delivered in California. Under the various measures, health plans would be required to pay for second medical opinions and decide whether a procedure requested by a doctor will be covered within five days, or three in urgent cases. Patients who believe they have been wrongly denied care may appeal to an independent panel of medical experts, after which they may sue or submit to arbitration for "substantial" physical or financial harm. A new Department of Managed Care would be created to regulate the industry, and fiscal solvency standards would be created for health plans. Health care companies would be forbidden from accessing patient records without permission from the patients ( Orange County Register, 9/11). Gov. Gray Davis has already indicated he will sign a majority of the legislation, and in "the final days of the session, he appeared more receptive" to several coverage mandates that also passed the Legislature, including measures requiring health plans to cover prescription contraceptives and mental health treatment (Lucas/Glendhill, San Francisco Chronicle, 9/11).
Everybody's Two Cents
Some doctors were less than enthusiastic about the package of reforms, arguing the measures "may ultimately be remembered as no more than a desperate attempt to protect a dying industry from itself, a grab bag of fixes treating all of the symptoms but not the disease." Dr. Scott Smith, medical director of the Yorba Park Medical Group, said, "Someone is going to have to pay for those second opinions. We're legislating ourselves into a box that's going to end up increasing the cost of care." Walter Zelman, president of the California Association of Health Plans, said, "Ultimately our analysis may have to be that these things give consumers more protections, more benefits, more services, and maybe it's not for us to say that people shouldn't have that. But people are going to have to be prepared for the cost. No way you can add those kinds of benefits and services without an impact on premiums" (Weintraub/Kowalczyk, Orange County Register, 9/11). But, he added, "[O]verall, the Legislature produced some major improvements and steps forward for consumers, while generally avoiding the kinds of proposals that might have had a significant impact on premiums." American Association of Health Plans President Karen Ignagni even said, "I believe it's a model that could be applied at the federal level." Analysts said they do not expect cost increases to be significant. Edmund Kroll of S.G. Cowen said, "In general, the changes are all very manageable. It could have been a lot worse" (Rundle, Wall Street Journal, 9/13).
For all the legislative Democrats demands on HMO reform, the Sacramento Bee reports that "when the curtain fell on the legislative session, Davis had received the HMO bills he wanted and little more." Most of the larger initiatives had been tailored to his desires, not those of consumer advocates (Smith, 9/12). State Sen. Jim Brulte (R-Rancho Cucamonga) said, "Gray Davis is firmly in control of his political party. And while Democrats grumbled and growled about 'implementing his vision,' they have become lapdogs" (Gladstone/Ingram, Los Angeles Times, 9/12).