Reform Urged as Rx for HMOs


As a tactic that resonates with voters, HMO-bashing is a no-brainer this political season.

Signs of the public’s sour mood toward managed care are everywhere--and political consultants and candidates have not missed them.

Audiences cheered Helen Hunt’s expletive-powered diatribe against HMOs in the movie “As Good as It Gets.” Millions of television viewers watched in horror as a man unfurled an anti-HMO banner on a Los Angeles freeway ramp before fatally shooting himself. And a 36-year-old newspaper publisher in Massachusetts who killed himself left a suicide note describing his struggles to get treatment from his HMO for depression.

So it’s not surprising that the three leading Democrats running for California’s gubernatorial nomination are calling for tough reforms for health maintenance organizations. All support legislation that would give HMO patients the right to sue their health plans--not just doctors--for medical malpractice. And they favor giving patients the right to appeal HMO decisions to an independent review board.


“Medical decisions should be made by doctors, not accountants,” Al Checchi says in a TV ad.

“HMOs must start putting people ahead of insurance company profits,” insists an ad by Rep. Jane Harman, a doctor’s daughter whose brother is a Kaiser Permanente oncologist. Harman says she belongs to an HMO, as do rival Democrat Lt. Gov. Gray Davis and the presumptive Republican nominee, state Atty. Gen. Dan Lungren. Checchi is not a member of one.

Davis, in campaign speeches, has highlighted HMO issues affecting women, expressing concern about so-called drive-through mastectomies and the need for pregnant women to be able to continue seeing their doctors even when their employers switch health plans.

Lungren has hinted that he too supports the right of HMO patients to sue.

“I may be the only person in the room who’s ever sued an HMO,” Lungren said in a speech to physicians in April. He told how, as a private attorney in 1977, he represented a patient who nearly died because of poor medical care from her Southern California HMO.

‘A Real Depth of Anger’ Among Public

Four years after President Clinton’s sweeping plan fizzled, health care reform is again a hot political issue. Opinion polls show that concern about the state of health care in this country ranks near the top of issues on the public’s mind.

“I think we have yet to see this issue reach its full maturity,” said Bill Carrick, Harman’s campaign manager. “It’s going to be a very big issue over time.”


Managed care “is the only issue other than juvenile crime that generates not only concern but a real depth of anger” among the public, said Michael Schroeder, the state Republican Party chairman. “Managed care has reached a critical mass in California, where if people are not in a managed care plan themselves, they have family or friends who are and they’ve heard some complaint.”

Of the Democratic gubernatorial candidates, Checchi and Harman are most vocal in their criticism of managed care and are backing a “patients bill of rights” among other changes.

Harman supports requiring HMOs to allow consumers to see any doctor, regardless of whether the physician is in the HMO’s approved network, provided that the doctor is willing to accept the insurer’s discounted fees.

Industry executives contend that that would undermine the system’s ability to help slow medical inflation and measure health care quality.

Harman also supports requiring HMOs to pay for second opinions and to disclose their criteria for authorizing or denying medical care.

Checchi, like Harman, believes that health plans should have to disclose more to consumers. He would require the plans to fully disclose information about all available medical treatments, “not just those that are the least expensive.”


Davis’ HMO reform proposals are similar to those of his two opponents, although his approach is often more conservative. He would allow HMO patients to seek outside second opinions only in the case of life-threatening medical conditions.

Like Davis, Lungren is more inclined than the other candidates to rely on marketplace reforms--an approach the industry prefers. A significant exception would be if Lungren decided to support legislation by Rep. Liz Figueroa (D-Fremont) that would, in effect, allow patients to sue and collect damages from HMOs in malpractice cases. Although Lungren said he supports the bill in concept, he declined in an interview to say if he would sign it.

“I think that HMOs stand in the shoes of the physician . . . and of the insurance company, and ought to be required to have both obligations and responsibilities,” he said.

Dozens of Bills to Tighten Regulation

Candidates using the HMO issue to win votes “are tapping into a very real public anxiety about change occurring in the health system and managed care,” said Drew Altman, executive director of the Kaiser Family Foundation, a health care charity not affiliated with the Kaiser Permanente health plan.

Public anger about managed care was reflected in a Kaiser Foundation-Harvard University study last year that found that 56% of Californians believed managed care makes it harder for sick people to see a specialist.

California lawmakers have said HMO problems are among the most frequent complaints they receive from the public. And nearly 6% of insured Californians--about 400,000 people--said they had contacted a legislator or an attorney about problems with their health insurance plans, according to a survey last year by researchers at UC Berkeley.


Those findings have not been lost on Sacramento. Republicans and Democrats alike have introduced dozens of bills to tighten regulation of HMOs. And the state’s HMO industry, which for years has fiercely resisted tighter government controls, has eased it stance and is endorsing a slate of modest reform proposals.

“The whole water table has risen in terms of the level of reforms that the plans themselves are willing to sponsor,” said Richard Figueroa, a health policy consultant to state Sen. Herschel Rosenthal (D-Van Nuys). “They understand that if nothing is done, there is a gorilla behind the door, and more drastic reform may follow.”

Even so, HMO executives complain that some candidates seek to make their organizations the scapegoat for public dissatisfaction with health care changes that are more complex than the actions of HMOs.

“It’s just too easy to bash managed care, because you can make these glib comments that everyone can agree with,” said Maureen O’Haren, acting chief of the California Assn. of Health Plans, a trade group. “Accountants are not making medical decisions at HMOs.”

And industry executives say some candidates’ ads have focused on “problems” already addressed by California lawmakers.

They cite a Harman TV ad in which the candidate declares: “It’s an insult when women need permission to see their own gynecologists.”


Several months ago, the Legislature passed--and Gov. Pete Wilson signed into law--a bill that grants women in HMOs direct access to obstetrician-gynecologists, effective January 1999.

Health care issues “are very complicated and don’t lend themselves to being communicated in 30-second commercials,” said Nancy Monk, vice president at PacifiCare. “When you tag on promises to fix things that already have been taken care of, it just adds to the confusion.”

In a speech before the California Medical Assn. in February, Davis, 55, talked about going to his HMO doctor to inquire about a prostate cancer screening test known as PSA. The American Cancer Society recommends such tests annually for men over 50.

Davis said his doctor agreed to order the test, but only after telling him that the roughly $30 procedure was not “economically justified.”

“If HMOs are giving you a difficult time about making decisions that cost $30,” he told the influential medical society, “then we really have to work together to build a system that’s fair to everyone.”

Times staff writer Maria L. LaGanga in San Francisco contributed to this story.


Where the Candidates Stand

HMO Liability: Democrats Al Checchi, Gray Davis and Jane Harman say they would sign into law an existing bill, AB 2436, that would, in effect, allow consumers to sue their HMOs for medical malpractice. Republican Dan Lungren said he supports the “intent” of the bill but declined to say if he would sign it.


HMO Oversight: All three Democrats and Lungren support transferring oversight of HMOs from the Department of Corporations to another agency. But the candidates have not specified how a new agency would be organized.

Independent Review: Checchi, Davis and Harman support the idea of enabling patients to seek an independent review when medical treatments are denied by an HMO. Lungren said he supports that concept as long as determinations are made by medical personnel.