Kaiser, 2 Other HMOs Join to Back Laws to Protect Patients


Breaking with their industry in an attempt to address growing consumer anxiety about managed health care, Kaiser Permanente and two other leading HMOs have teamed up with health advocacy groups to support tough new government consumer protection legislation.

The HMOs and two influential advocacy groups--the American Assn. of Retired Persons and Families USA--are proposing “legally enforceable standards” to protect the more than 140 million Americans enrolled in managed-care plans.

Wednesday’s move by Kaiser, the nation’s biggest health maintenance organization, Group Health Cooperative of Puget Sound and New York-based HIP Health Insurance Plans, was quickly criticized by other health industry groups, which said they opposed legislative mandates.

Federal mandates will “impede quality and innovation and raise costs,” said Heidi Wagner-Hayduk, spokeswoman for Healthcare Leadership Council, an industry group representing health insurers, drug companies and hospitals.


“The market is working” by prompting health plans to respond to consumer concerns through voluntary measures, she said.

But the three HMOs and consumer groups said that is not happening quickly enough to satisfy the public, which is concerned that HMO cost-cutting efforts are lowering standards of medical care. What is needed, they said, are consistent national standards that would apply to all health plans.

“We all agreed that the health-care system is in danger of losing something of fundamental importance to its success: the trust of people it serves and those who care for patients,” said David Lawrence, chairman of Oakland-based Kaiser Permanente, the nation’s largest HMO. “We hope today marks a major step toward enhancing trust in the health-care system.”

The proposal already has been sharply divisive within the HMO industry, which once walked in lock-step against most of the managed-care reform bills proposed in state legislatures and Congress in the last few years.

“This has been very polarizing in the industry,” said an official with one of the consumer groups. This official said the industry’s leading trade group, the American Assn. of Health Plans, “tried to discourage Kaiser from sitting down with us.”

Last year, the AAHP launched a voluntary campaign for patient rights, dubbing it “Patients First.”

The group, commenting Wednesday on the effort by three of its members, said: “Rather than micro-manage, government should provide a framework in which the marketplace can play its proven role in driving innovation and continual improvements in quality care and service to patients.”

In an interesting twist, Phil Nudelman, chairman of Group Health, is due to become AAHP chairman in June.


Kaiser and the other HMOs said they hope some of the industry’s leading players will follow their lead. However, the chief executives of two of California’s biggest HMOs, PacifiCare Health Systems and Foundation Health Systems, are members of the Healthcare Leadership Council that blasted the initiative.

Still, Kaiser and the Seattle-based Group Health Cooperative wield considerable influence within the industry. Both are nonprofit firms that helped pioneer the HMO concept and are regarded by many policymakers as models of cost-efficient, quality health care.

Although health plans are subject to a bevy of state and federal regulations, they are “inconsistent and crazy quilt,” said Ron Pollack, executive director of Families USA, a Washington-based health policy group.

“What makes this proposal so important is that you would have legally enforceable rules, so that when a consumer gets denied something, you could do something about it,” Pollack said.


Those standards, the plans and consumer groups agreed, should include:

* The right of women to choose an obstetrician and gynecologist as their primary doctors; standing referrals to specialists for patients who frequently need to see specialists; the right to see an outside specialist if a plan does not have a doctor with appropriate expertise, and the right to choose or change primary-care doctors at any time.

* A choice of health plans for people enrolled through their jobs (more than 50% of employer-insured consumers have no choice of plans).

* For people suffering from serious illnesses or women in their second trimester of pregnancy who were forced to switch health plans, the right to have their new plan pay for visits to their old doctors for a specified period.


* The right to drugs not normally covered by a plan if a doctor deems them medically necessary.

* The right to independent review for seriously ill patients whose health plans have refused to pay for experimental treatments. Access to an outside ombudsman to assist consumers with complaints and grievances.

Times staff writer David Olmos can be reached by e-mail at or by fax at (213) 473-2481.