Davis Urges Slowdown on Health Care Reform

Gov. Gray Davis, facing a tidal wave of bills to overhaul the managed health care industry in California, has asked lawmakers to slow down, legislative and administration sources said Wednesday.

Reform advocates said the governor’s announcement caught them off guard and immediately triggered fears that a thorough reform of health care may be delayed for a third straight year.

“For me, it’s deja vu of the Wilson administration,” said Sen. Liz Figueroa (D-Fremont), citing former Gov. Pete Wilson’s successful strategy in 1997-98 to kill a wholesale overhaul of the embattled system.

Michael Bustamante, the governor’s spokesman, sought to ease those concerns. “The big difference is that Gov. Davis is interested in enacting HMO reforms” and Wilson was not, Bustamante said.

Davis outlined his position at a private meeting in his office Monday night with Democratic leaders of the Legislature’s insurance, health and appropriations committees.

Sources who spoke on condition of anonymity said Davis made it clear that he did not share a vision of a major overhaul of health care financing, delivery and performance this session.

More than 60 bills on those issues are pending and moving swiftly toward his desk. “He only wants four to six bills,” one Democrat said.

Davis did not indicate which bills he would sign or spell out his still-evolving policies on HMO reforms. But he said he intends to activate an administration task force during the next month that would make recommendations to him as the Legislature prepares to wind up the current session, according to the sources.

The task force would consult with insurers, health experts, employers and legislators to arrive at what Bustamante described as a common-sense consensus that would satisfy consumers and business interests alike.

The governor’s action came on the heels of a fund-raiser Friday for Davis hosted by health insurers, who favor some changes but want a “go slow” approach. A spokesman for the insurers said no legislation was discussed with Davis at the event. “We know the rules,” he said.

In 1997, Wilson found himself in circumstances similar to those now confronting Davis.

At the time, more than 80 HMO bills headed Wilson’s way. Backed by the industry, he promised to veto them all. He also appointed a task force of experts to study the issue and make a report in 1998.

When the task force issued its report, lawmakers scrambled to introduce bills that reflected its findings. Wilson all but ignored the recommendations and continued vetoing the bills.

Many of the same issues face Davis. They include bills that would allow HMOs to be sued for damages by patients, require insurers to offer mental health policies and submit patient appeals of HMO decisions to independent experts for a ruling.

Figueroa, author of the “right to sue” bill, which is based on a Texas law supported by Gov. George W. Bush, told reporters that Davis’ task force plan reminded her of Wilson’s strategy to kill reform bills.

“I hope that’s not the case here. We’ll have to wait and see,” she said.

Sarah Nichols, a health reform lobbyist, said consumers will not tolerate any more delay, and demand action now.

Sen. Jackie Speier (D-Daly City) said Davis’ refusal to embrace wide-ranging reforms indicated he wants to find a middle ground. “I think he’s going to take a moderate approach,” said Speier, who attended the session.

On Friday, Davis attended the unpublicized campaign fund-raiser for himself in Los Angeles, hosted by chief executive officers of the biggest health care insurers.

Several sources estimated that the event raised $400,000 to $600,000 for the governor’s campaign accounts, but Walter Zelman, president and chief executive officer of the California Assn. of Health Plans, insisted that the sum was $100,000 to $125,000. The official amount will be reported in a few weeks.

Still, word of the governor’s stance apparently caught the health care industry as a welcome surprise. Managed care spokesmen have argued that an uncoordinated, overlapping and redundant reform scheme would drive up health care costs dramatically.

Zelman said Davis needed to step in and “take control over the process, slow it down at bit and try to find a consensus.”

“I hope, and I presume, that we are not talking here about some kind of strategy to undermine managed care reform,” Zelman said.