MANAGED CARE: New Regulatory Department Proposed
Gov. Pete Wilson Friday proposed to create a new Department of Managed Health Care, which would assume the managed care regulatory functions currently held by the state Department of Corporations, the Sacramento Bee reports (5/2). Under Wilson's proposal, the other functions of the Department of Corporations would be transferred to a new Department of Financial Services, effectively abolishing the Department of Corporations. Wilson said in a statement, "This reorganization plan is a fundamental first step towards ensuring that government keeps pace with the enormous changes occurring within the health care industry." He added, "I'm confident that creating this department is the most expedient way of providing consumers with improved quality control, accountability and efficiency in the administration of California's health care laws" (AP/Los Angeles Times, 5/2). Under Wilson's plan, the department would be headed by a single director appointed by him and would include "a new enforcement arm and additional staff in the consumer services unit." Consumer advocates and state Senate Democrats have been advocating for a commission comprised of "appointees of the governor and the Legislature," the Bee reports. The plan will go into effect July 1, 1999, "unless one house of the Legislature rejects the proposal" (5/2).
Jamie Court, director of Consumers for Quality Care, said the governor's plan is "'a slick and ineffective response' to problems in the managed health care industry" (AP/Los Angeles Times, 5/2). Noting that the "single-appointee state HMO regulator oversight system has woefully failed consumers," he said, "This is a placebo for patient problems. This is aspirin for an open wound. A single gubernatorial appointee to oversee HMOs is accountable to no one but the governor and, inevitably, the governor's campaign contributors, the HMO industry" (release, 5/1). Howard Owens, president of Health Access California, said, "Simply splitting the Department of Corporations into two parts ... is not nearly good enough. That is just reshuffling the boxes on the organization chart" (release, 5/1).