State’s New HMO Regulator Must Walk a Fine Line

Daniel Zingale told a recent gathering of top health-insurance executives that he feels like the new sheriff in the Mel Brooks classic “Blazing Saddles”--greeted with suspicion at every turn.

Indeed, by accepting Gov. Gray Davis’ appointment to run the new Department of Managed Care, the 39-year-old Sacramento native stepped into the middle of one of the modern era’s most contentious relationships: that of patients and their health-maintenance organizations.

To establish himself as a credible go-between, Zingale has some convincing to do.

Representatives of the state’s 23 million HMO enrollees are poised to pounce on any hint of compromise, while health-plan executives are struggling to accept a man who has spent the past seven years advocating for AIDS patients’ rights in Washington, D.C.

Even for Zingale, becoming a government bureaucrat requires some adjustment because, “for the last decade I’ve spent most of my time holding people like myself accountable.”

At this point, every word uttered by the new managed-care director carries extra weight.

When Zingale told the HMO leaders in his San Diego speech that patients must come first, HMO spokesman Walter Zelman rolled his eyes. Such rhetoric misses the key dichotomy between patients and consumers, said Zelman, who lobbies the Legislature on behalf of 36 HMOs as president of the California Assn. of Health Plans.

“Even he doesn’t get it,” Zelman said. “As consumers, we see the value of keeping health care costs down, but as patients in the doctor’s office, we don’t care what it costs.”

Creation of the Department of Managed Care was Davis’ response to mounting criticism of state HMO regulation as impotent at best. It was the heart of last year’s package of 21 HMO reforms, considered among the nation’s most sweeping.

To increase consumer responsiveness, the HMO watchdog functions will be removed from their longtime home at the Department of Corporations. The new department will also include a beefed-up consumer hotline and an official patient advocate (yet to be appointed by the governor).

While Zingale waits for the governor to release funds so he can get started--which happens automatically July 1 if Davis does not act sooner--he is in a listening mode, he says. And he’s getting an earful.

Attorney Dale Bonner, who regulated HMOs for a year as Gov. Pete Wilson’s commissioner of corporations, has urged Zingale to go slow in implementing the new laws.

“I think the key thing is, can everybody take a deep breath, see if this works before we push forward?” Bonner said. “It’s better to take the time and get it right.”

Health-plan honchos are imploring Zingale to focus first on consistent regulation, complaining that the Department of Corporations was chronically unpredictable.

“The department was tortuously long, inconsistent, quixotic in terms of what it chose to beat up on somebody about,” said Beau Carter, director of Integrated Healthcare Assn., a Bay area trade association for HMOs.

Legislators are even now trying to feed Zingale a fresh set of HMO reforms before he’s had time to digest last year’s. And those consumer advocates who found the 1999 reforms lacking are suggesting the department flex its new muscles quickly and often to let HMOs know who’s boss.

“If you’re the new sheriff in town, you flash your badge, you show your gun and the only door you keep open is the one to the jail,” said Jamie Court, advocacy director for the Foundation for Taxpayer and Consumer Rights in Santa Monica.

Putting the Spotlight on Prevention Issues

Zingale is keeping many of his intentions to himself for now, saying that, until the governor makes the position official, he does not want to preempt the Department of Corporations.

But details are beginning to emerge. During the San Diego speech--his first since accepting the job--Zingale asked health-plan executives to join him in emphasizing preventive care issues ranging from education to health screening.

“With dollars saved by keeping more enrollees healthy, there will be no excuse for not providing those who are in need with quality care,” he said.

He wants 24-hour coverage on the hotline, a responsive Web site and an in-house medical advisor--probably a doctor--plus a policy department to act as a think tank.

In addition, Zingale plans to hire a senior financial advisor to help him deal with solvency problems that have ended in the failures of several HMOs.

He also committed to streamlining bureaucracy and said he was extending “a rhetorical handshake” to the industry by promising to emphasize real problems, not small infractions.

Reaction to the comments was swift: “I think we’re all very encouraged,” said Aetna US Healthcare executive Thomas R. Williams. But consumer advocate court accused Zingale of offering an olive branch when a big stick is needed.

Zingale’s measured approach is consistent with his polite but straightforward manner. He is tall but hardly imposing, with a thin face and light stubble on his chin only slightly longer than the hair on his head. During his San Diego speech, he joked that his health plan had turned down his request for a Rogaine prescription.

He considers the governor his mentor, having first worked for him as an Assembly fellow 15 years ago. After completing a graduate degree in public administration at Harvard University, Zingale returned to become Controller Gray Davis’ chief of staff.

Davis is a notoriously tough boss, but Zingale said he came to appreciate that discipline.

“I always felt he had very high standards for himself and those around him,” Zingale said. “He taught me a great deal about regarding public service as a privilege.”

Zingale left the Davis fold after his partner, Chuck Supple--they met as undergraduates at UC Berkeley--was offered a job in Washington, D.C.

Beginning as a lobbyist for the American Psychological Assn., Zingale moved on in 1993 to develop public policy for the Human Rights Campaign, the nation’s largest gay and lesbian rights organization. Four years later, he became director of AIDS Action Council, the disease’s leading national lobby.

Under Zingale’s leadership, AIDS Action shifted its emphasis from treatment and cure to prevention and access to care. The organization backed voluntary HIV testing for the first time.

He was known for his innovative ideas--he staged a yearlong “e-march” on Washington over the Internet--and his glib remarks. President Clinton’s refusal to pay for distributing needles to intravenous drug users, he once said, was like saying, “We acknowledge the world is not flat, but we’re not going to give Columbus the money for the ships.”

But Zingale also helped put a more moderate--some would say more politically palatable--face on the fight against AIDS by including a broader spectrum of activists.

That meant reaching beyond the core group of gay white men to minority groups experiencing the fastest growth in AIDS infections.

One of Zingale’s lobbying techniques was running issue campaigns, a tactic he wants to employ as California’s top HMO regulator.

At AIDS Action, he launched the “virtual vaccine” campaign--calling for prevention activities such as mandatory condom commercials on major network programs rated “S” for sexual content. In his new job, he talks of staging prevention campaigns and informing HMO patients of their legal rights.

Elated to Take on a New Challenge

As the governor talked about the HMO regulator’s job during the months leading up to the legislation’s passage, Zingale was increasingly excited about the potential challenge.

Further sweetening the offer, Davis agreed to appoint Supple to head the state’s Commission for Improving Life Through Service, which promotes community service.

But there was something else on Zingale’s mind, too. While in D.C., he and Supple adopted a son, now 5. For Zingale, the prospect of bringing his son closer to his own parents clinched the deal.

“He’s their only grandchild,” Zingale said. “Getting the three of them together is just magic.”

Zingale’s immediate concern is lining up candidates for the top dozen openings in his department--no easy feat when it means a significant pay cut, especially for those from the health-care field.

As he outlines the sales pitch he is perfecting, Zingale could just as well be talking about himself: He took a salary hit, dropping from about $140,000 at AIDS Action to $112,000 in his new post.

“The right people recognize what a rare opportunity this new department is,” he said. “It’s the first of its kind in the nation and all eyes are on it.”