HMO REFORM: Industry Launches ‘Counteroffensive’
The California Association of Health Plans, anticipating a sustained push for HMO reform by the state Legislature this year, has begun a lobbying blitz starring a former champion of universal coverage. CAHP President Walter Zelman "went to the offensive" last week -- "calling attention to a variety of studies on health care costs that show managed care has yielded tremendous savings to California businesses that have produced higher wages and increased business investment." He said, "Our biggest concern is that the Legislature and the public may undervalue the most positive aspects of the managed care story." He noted that premium increases have gone from an average of 15% per year in the 1980s to a 5% average increase after 1994, due largely to the advent of managed care. Furthermore, he noted that "there is no data that suggests the quality of care provided by HMOs is any worse than that offered through traditional insurance programs" (Herdt, Ventura County Star, 1/22).
CAHP has drawn on Zelman, former head of Common Cause and a proponent of universal coverage under President Clinton, in the hopes that his experience and "career as a public-interest advocate" will resonate with "the state Capitol's new Democratic power brokers." During Gov. Pete Wilson's tenure, HMOs could count on him to veto most regulatory attempts by the Legislature, but Gov. Gray Davis appears to be much more receptive to HMO reform. "I will be urging HMOs to get ahead of the curve and demonstrate that they put patient care at the top of the list. The reason we in the governor's office and the Legislature are asked to essentially practice medicine is that there's widespread dissatisfaction with patient care," Davis said. Assemblyman Martin Gallegos (D-El Monte), chair of the Assembly Health Committee, suggested that as Davis will be more "committed to enforcing the existing regulations," the Legislature won't need to send him "scores of laws." Still, lobbyists and consumer advocates expect that in the next six months Davis and the Assembly will create "a new regulatory agency for HMOs, expan[d] access to coverage and allo[w] patients the right to sue their HMOs." Zelman said, "We're going to go along with as much change as possible" (Ainsworth, San Diego Union-Tribune, 1/25). But he noted that such reforms will only raise costs and reduce the number of Californians with health insurance, citing a study "that concluded 40,000 people lose coverage for each 1% increase in premiums." He said, "There are literally thousands of small employers hanging on to insurance by the skin of their teeth. None of us should lose sight of the fact that the greatest need is not of those who are well insured to get a little more but whether those with some insurance get nothing" (Star, 1/22).