Lungren, Davis Back HMO Reform

Whoever wins the governorship in November, odds are good that California’s managed care industry won’t be quite the same.

Despite clashes between Republican contender Dan Lungren and Democratic hopeful Gray Davis on other hot-button health issues--notably tobacco control and abortion--both endorse moderate but significant HMO reform.

For Lungren--the state attorney general--the approach is a way to distinguish himself from the Pete Wilson administration, which has largely left managed care alone. For both Lungren and Davis, who is California’s lieutenant governor, it is a way to tap into bubbling public frustration with the HMO industry.

In the last two years, there has been growing outcry from patients and doctors for such reforms as keeping money out of medical decisions, improving access to specialists and second opinions, and providing for redress when things go wrong.

“We really think [these candidates] are going to be more willing to reform managed care than Mr. Wilson has been,” said Dr. Robert Reid, president of the California Medical Assn., which has not endorsed either candidate.

Jamie Court, director of Consumers for Quality Care in Santa Monica, which has pushed for wholesale changes in the regulation of HMOs, considers this potentially a sea change election for managed care.

“Gov. Wilson has been holding [up] the dam to reform for two years now,” he said. “We have all been waiting for the next governor to provide some relief to patients.”

Doctor-Patient Relationship Key

Davis and Lungren are cautious, however; neither has been an HMO-basher. Both prefer instead to stress the sanctity of the doctor-patient relationship, vowing to keep it from being compromised by economic interests.

Lungren has repeatedly emphasized that he is an old-style doctor’s son. He told the medical association in April about his father’s struggles years ago against pushy insurers who put dollars first.

“I understand the problem of cost, and we can’t forget it,” he said. “But you just can’t forget the patients. . . . In the process of the pursuit of cost containment . . . we have oftentimes lost sight of the doctor-patient relationship.”

Davis sounded a similar theme before the same body in February.

“Throughout the industry, doctors are being subjected to ever-increasing levels of financial scrutiny--and decisions that should be based only on the patients’ needs are increasingly being subverted to the accountants’ needs.”

Both pledge to protect doctors from retaliation by HMOs when they make costly but competent medical decisions.

And the candidates say that they would hold HMOs accountable for their medical determinations. Davis would support plan-reimbursed review of contested cases by an independent physician within 30 days. (Although he once limited his support for such review to life-threatening illnesses, he has shifted his position to include a broader spectrum of cases.)

Lungren endorses timely external review on most procedures.

Both support patients’ right to sue their HMOs for malpractice when the organizations’ medical decisions result in harm. Davis has called for holding HMO decision-makers personally liable for any medical misjudgments as well.

The candidates both would extend the current $250,000 cap on malpractice pain-and-suffering awards against individual hospitals and doctors to cover HMOs as well, however. Since HMOs have greater resources, the proposal could tightly limit some patients’ compensation and, say consumer activists, might not provide a significant deterrent to malpractice.

Lungren says he might at some point consider raising the pain-and-suffering cap, which hasn’t been increased since its creation in 1975, and Davis too has left the door open for some adjustments.

The HMO industry is bracing--cautiously--for change.

“We will consider all ideas and are willing to work with the new governor and whoever he may be,” said Maureen O’Haren, a spokeswoman for the California Assn. of Health Plans. Although O’Haren said her group does not support liability legislation, she said it does endorse external review.

Differences in Approach, Emphasis

Some degree of reform appears inevitable in managed care--yet there are differences in the gubernatorial candidates’ approaches and emphases.

Asked about mandates for certain coverage--such as an allotted number of hospital days for certain procedures or required coverage of certain drugs--Lungren said, “I would be reluctant to get into that.” To him, determining what is medically necessary is a decision that rests with the doctor and generally should not be subject to the Legislature’s interference. He also opposes bureaucratic requirements that add to health care costs, he says.

Even on the issue of legislation requiring mental health coverage roughly equivalent with physical coverage--now on Wilson’s desk and already adopted by a score of other states--Lungren is noncommittal. He says he would have to see the cost estimates.

“We have to keep in mind overall economic impacts,” he said. “Will it be so great that it exacerbates the existing problem” of spotty health insurance coverage overall?

Davis says he supports “the concept” of parity in mental health coverage. He says he does not view legislation or lawsuits as the best way to resolve health care issues and would rather work with the HMO industry than against it.

“But I’m not going to stand by and allow California patients to be . . . abused or ripped off,” he said. “If I am convinced there is a genuine need to act, I will act.”

Earlier this year, he endorsed legislative curbs against what he called “drive-through” mastectomies.

Davis has emphasized his devotion to improving women’s health care--especially to protecting “reproductive rights,” including family planning and abortion. Lungren, a strict Roman Catholic, opposes abortion except in cases of rape, incest or a threat to the life of the mother. The Davis camp has touted the abortion issue as one of the defining issues of the campaign; the Lungren campaign has tended to play it down.

The candidates diverge more subtly on contraception. Davis favors mandated insurance coverage of contraception, which Wilson just vetoed. Lungren says he does not oppose coverage as long as employers can opt out as a matter of conscience.

Both candidates support obtaining $7 million in federal funds available for a youth abstinence-only education program--which the state has not yet tapped because of substantial Democratic opposition. Yet Davis emphasizes that he wants youngsters to have access to a full range of information in sex education, including information on contraception.

Voicing Differences on the Uninsured

The candidates part ways on another massive problem facing the state’s next governor--high numbers of uninsured residents, particularly among the working poor. About 6 million Californians lack health insurance.

The federal- and state-funded Healthy Families program, implemented in July, is aimed at insuring 400,000 children of poor working families, half of them by next summer. But enrollment is off to a slow start. Some critics blame inadequate outreach and bureaucratic hurdles. Others say the state isn’t aiming high enough.

There are 1.7 million uninsured children in California. What about the rest of them? What about their parents?

Lungren doesn’t want to tinker with the program’s approach or parameters just yet. “It’s too early to tell,” he said. “I’d like to see how this works.”

Davis says the Wilson administration did not make maximum use of the federal funds available to California to support Healthy Families--leaving hundreds of millions of dollars “on the table.”

As for outreach, “there is no question that we can do more in schools and other community-based centers to get the word out” about the program, he said.

Lungren is not big on public sector solutions. He knocks Davis for “big government liberalism,” accusing him of supporting a national health care program in the 1980s--something Davis strongly denies.

Yet Lungren is not averse to flexing government muscle on certain health care issues. He points proudly to his aggressive efforts to ensure that proceeds from the sale of nonprofit hospitals to commercial chains have gone to charitable health care purposes, to ensure that tax-exempt institutions fulfill their obligations to the taxpayers who supported them over the years. In other jurisdictions, such proceeds have gone to causes far afield from health, such as youth flying lessons.

Davis says Lungren was a weak attorney general on one of the most significant health issues of the decade: He didn’t come out swinging against “Big Tobacco.” Davis says Lungren held back far too long before filing suit last year against tobacco companies to seek compensation for the state’s Medi-Cal losses to smoking-related care.

“We were [the] 37th [state] to file suit,” said Davis, who filed a suit of his own against tobacco companies before Lungren. “We do not have a committed advocate at the table.”

Lungren and his supporters say they filed as soon as they could under California law. Lungren says he had to wait until legislators acted on his recommendation to repeal a state law that gave tobacco companies immunity, they said.

“Dan Lungren voted to ban smoking on the airlines [while in Congress] in the ‘80s, sued the industry as attorney general and is currently at the bargaining table as attorney general to negotiate a landmark agreement that protects children from tobacco advertising,” said his press secretary, Bob Brown.

“He was a real Johnny-come-lately on this one,” countered Davis.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

How to Take Care of Health

Gubernatorial candidates Gray Davis, left, and Dan Lungren disagree on some health care issues.

On Managed Care Reform

Gray Davis: Favors right to outside review of contested cases by independent physician within 30 days. Favors right to sue health maintenance organizations and HMO decision makers for malpractice, subject to California’s $250,000 cap on pain and suffering damages. Supports some legislative mandates for insurance coverage.

Dan Lungren: Favors timely external review of most procedures when denial is contested. Favors right to sue HMOs for malpractice, subject to California’s $250,000 cap on pain and suffering damages. Shies away from legislative mandates for covering procedures and drugs.

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On Family Planning

Gray Davis: Favors mandatory insurance coverage of contraceptives. Supports state-funded family planning services; supports sex education for young people that includes a full range of information about contraception and abstinence.

Dan Lungren: Does “not oppose” mandatory insurance coverage of contraceptives, as long as employers can opt out for reasons of conscience. Favors a focus on abstinence education for youngsters. Opposes distribution of condoms in schools.

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On Abortion

Gray Davis: Favors abortion rights. Opposes requiring parental consent for minors.

Dan Lungren: Opposes abortion except in cases of rape, incest or to save the life of the mother. Believes minors should obtain parental consent.

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On Healthy Families Program

Gray Davis: Says program for uninsured children of working poor should be expanded to reach more families and should take better advantage of federal dollars available.

Dan Lungren: Says he doesn’t want to change parameters or approach until he sees how the program works over time.