HMO REFORM: Little Revealed about Department of Managed Care
Weeks after Gov. Gray Davis signed a "comprehensive package on HMO reform bills, officials still have yet to decide who will head the new Department of Managed Care and how much power and money the department will have to oversee the state's 56 HMOs, which collectively cover 23.5 million Californians. The new department, whose creation has been called a "daunting task fraught with political and bureaucratic peril," opens July 1 and will resolve complaints about treatment, protect consumers from health care provider and contractor insolvency, force HMOs to provide good care and educate consumers about their medical rights. California Association of Health Plans president Walter Zelman said, "It's all going to come down to who the governor appoints and what he wants them to do. They could be very influential and very visible, or they could just be symbolic. But the fact is, this is a flagship element of HMO reform and the governor supports it. That suggests this is all going to be more than symbolic." Maria Contreras-Sweet, cabinet- level adviser to Davis who is putting together the new department, said, "We'll have a wonderful opportunity to create a whole new culture." Staff members from the Health Plan Division, a "much-criticized" unit of the Department of Corporations that has regulated HMOs for 25 years, will make up the core of the new department. A Davis official said, "They're the only ones with the expertise, the only ones with government experience in HMO regulation." The AP/Contra Costa Times reports that the department's creation will "require an intricate bureaucratic reshuffle, including an accommodation with unions and civil service rules." Davis also is expected to release the department's final budget proposal in January, which is likely to be between $25 million and $30 million.
The New Team
Although several people have been approached to head the new department, no one has accepted the position. Contreras-Sweet will start formal interviews soon, but the governor has the final decision. One lobbyist said, "She's talked to a lot of folks. You're asking somebody to live in Sacramento, you're asking them to be in the media spotlight, you're asking them to be a team player with Davis. You're asking all this for $100,000 a year, which to a physician or an CEO is like pocket change." The AP/Contra Costa Times reports that one contender is Cliff Allenby, a budget writer, former head of the Health and Welfare Agency, former Finance Department official, former head of the Department of Developmental Services and the chair of the Managed Risk Medical Insurance Board. The department also will have several advisory panels, including an Office of the Patient Advocate that could "exercise enormous authority on behalf of patients who have disputes with their HMOs" and an independent panel of outside consultants who review patients' treatment in serious or life-threatening illnesses (Howard, 10/25).