SUPREME COURT: Ruling Puts Burden On New Agency
"When the Supreme Court ruled Monday that [HMOs] have the right to give doctors bonuses for keeping down health treatment costs, it recognized an uncomfortable truth: Cost controls are a bedrock principle of HMOs and can't be achieved without rationing treatment," according to a Los Angeles Times editorial. The editors argue that the ruling "will by no means end consumer disputes with HMOs." In California, the job of HMO oversight will be transferred in July from the state Department of Corporations, which the Times says was "not consumer-oriented and ill-equipped to judge medical care issues," to the Department of Managed Care. Last Sunday, a joint legislative budget committee supplemented the department's "modest" $30 million in annual funding with $5 million more to educate consumers about their rights and privileges under the newly created HMO regulator, the Department of Managed Care. The Times says that "Gov. Gray Davis (D) should promptly approve the outreach funds" and cites a new survey by the Kaiser Family Foundation showing that 90% of the health care consumers in California do not even know the name of the state agency that regulates HMOs and other health plans. The editors are not surprised by that finding because a Consumer's Union survey found that the Department of Corporations had not disseminated information to consumers in a timely fashion. When the Department of Managed Care, headed by Director Daniel Zingale, takes over regulation responsibilities next month, it will need substantial resources, the Times argues. The editors conclude, "Considering the burden that the Supreme Court just dropped on state regulators, Zingale and his staff will have little time to learn their jobs. Sufficient funding can help speed their learning, and they should get what they need" (6/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.