Doctor Stepping Into Driver’s Seat With Health Systems Deal : Health care: A decade ago, Malik Hasan was in private practice. Now he’s at helm of nation’s biggest publicly held HMO.

Health care executive Malik M. Hasan has prospered by driving hard bargains with doctors and hospital executives.

Now he’s about to step into the driver’s seat as chairman of the nation’s largest publicly held managed-care company, following Monday’s announcement that WellPoint Health Networks will acquire rival Health Systems International for $1.89 billion.

Hasan’s ascent to one of the most highly visible jobs in health care has been rapid. Just a decade ago, he was a neurologist in private practice in Pueblo, complaining with his fellow doctors about a new-fangled health maintenance organization that was slashing physicians’ fees. To better control their own destiny, Hasan and the other doctors started their own HMO.

And things just kept on rolling for Hasan. Now Hasan will play a major role in delivering medical services to 4.4 million people.

Hasan is described by admirers and detractors as “tough,” “charming,” and “a visionary.”

“He’s extremely brilliant in that he’s a physician and has a good grasp of medical issues. And he’s also a remarkable businessman who has tried to find a middle ground between good medical care and good business practices,” says Kenneth R. Pelletier, an associate professor at Stanford University’s Medical School who is also a director of Health Systems.

David Drucker, chief operating officer of the Palo Alto Medical Foundation, who has sat across the negotiating table from Hasan, describes him as “a very smart, tough, hands-on executive and negotiator. He has created something from nothing.”

But Hasan has angered many health care providers with his demands that they sharply discount their fees.

“Malik has tried very hard to ratchet down the costs of medical services,” said one executive of a larger Southern California medical group. “But he’s done it so much that many medical groups are having difficulty meeting their financial commitments and are having to cut programs that are probably very valuable to patients.”

Some medical group officials say that Health Systems, under Hasan’s leadership, has gained a reputation as willing to build market share at almost any price. They say Health Net will aggressively cut premiums to gain favor with employers, then make up for the lost revenue by squeezing the profits of physicians and hospitals. Meanwhile, these officials say, Health Systems continues to wrack up strong profits itself.

Earlier this year, Health Net slashed medical premiums for its biggest customer, the California Public Employees Retirement System, by 7%.

Hasan’s emphasis on cost cutting rubs many doctors and hospital executives the wrong way. And his fondness for arriving at doctors’ meetings in large white, chauffeur-driven limousines “sends exactly the wrong message,” said one medical group executive.

Hasan acknowledges his reputation as a tough negotiator but says he is not anti-physician.

“It’s obviously in our interest, and our members’ and shareholders’ interests, to get the lowest price we can get,” Hasan says. “But it’s not in our interest to drive doctors out of business because then who’s going to take care of my patients.

“I would like to describe myself as tough, thoughtful, involved and fair,” he adds. “It’s not like you can go in there with a cannon and say, ‘This is what I want you to do.’ ”

Hasan was born in 1938 in a suburb of New Delhi and was reared in Pakistan. His wealthy, landowner parents did not encourage Hasan’s ambition to become a doctor. But he persevered, studying medicine in Pakistan and neurology in England.

Hasan and his wife, Seeme, immigrated to the United States in 1970, settling first in Chicago where Hasan practiced for five years before moving to Pueblo, a mid-sized industrial city in southern Colorado.

In 1985, Hasan and a small group of doctors founded Qual-Med Inc. to fend off a new health maintenance organization that was sharply cutting back on doctors’ fees. Qual-Med found it could cut medical costs by putting doctors in charge of case management and focusing on quality of care, Hasan said.

At Qual-Med, Hasan developed a computer system that tracks patient records so that company medical directors can quickly review requests for referrals to expensive specialists. The system also ranks monthly doctor-care costs for each patient as well as things like use of lab services, outside specialists and hospital services.

Qual-Med grew quickly by acquiring ailing HMOs and returning them to profitability with the help of its cost-control system. Lower health care costs translated into lower prices to Qual-Med’s corporate customers.

Qual-Med startled the industry by going after the much-larger Health Systems in 1993. After a prolonged court battle, Qual-Med and Health Systems settled their dispute by merging.