Davis Criticized Over Health Bills

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With the state legislative session drawing to a close, Gov. Gray Davis is joining health maintenance organizations in opposing more than half a dozen bills backed by physicians, who say the legislation is needed to help seriously ill patients.

The governor’s position on the bills has touched off a fierce backlash, with some leading Democrats accusing the administration of Davis, a fellow Democrat, of compromising health care in favor of profit-making HMOs, several of which are major donors to the governor’s reelection campaign.

Senate President Pro Tem John Burton (D-San Francisco) and Sen. Jackie Speier (D-Hillsborough) sent a stinging letter to Daniel Zingale, Davis’ director of the Department of Managed Health Care, saying they “are furious over the flurry of opposition to reform measures pending in the Legislature that has been generated by your department.”


“You have let us down,” the senators said in the letter, obtained by The Times. “More importantly, though, you have let down the consumers you profess to care about.”

Burton and Speier said they were particularly troubled because they voted to confirm Davis’ appointment of Zingale, assuming they were supporting “a protector of the public.” As it has turned out, the letter said, Zingale “appears to be going out of his way to protect health plans at great cost to the public.”

In an interview, Zingale said the letter “certainly is in contrast with the 500 patients or so who get direct assistance from the department every day, and it is in contrast with what I’ve heard from patients and their advocates.”

“We’re trying to move forward to expand patients’ rights further,” Zingale said.

Although some frame the issue in terms of health care needs against HMO profits, others see it differently. Health Access, a labor- and consumer-backed group, and the Western Center on Law and Poverty sent Speier and Burton a letter Friday saying they were “deeply troubled” by the senators’ letter “questioning [Zingale’s] position as a consumer advocate.”

Beth Capell, a Health Access lobbyist, characterized the dispute as a battle between two well-heeled interests--health insurance companies and physicians, who are themselves major donors to the governor.

“A plague on both their houses,” Capell said.

The hard feelings are likely to play out in a conference committee made up of members of the Senate and Assembly that was established Monday to meld a health care proposal with several bills pending in the Legislature. The committee’s first meeting will take place today.


In several instances during the closing days of the legislative session, Davis’ Department of Managed Health Care has moved to block bills that lawmakers say would help patients. The department contends in several letters that the bills would “interfere with private contractual relationships” between doctors and HMOs.

Among those bills are measures that would:

* Give doctors and others the right to sue health insurance companies in cases in which they allege that contracts governing care and reimbursement are unfair. Davis administration officials recently surprised the bill’s sponsors by expressing reservations about the measure after it was amended to respond to their objections.

* Increase physicians’ compensation for treating AIDS patients, a move intended to improve treatment for people with that disease.

* Require that health plans cover treatment for drug addiction and alcoholism.

* Require health insurance companies to pick up the tab for high-cost medication for patients with cancer, AIDS, hemophilia and other diseases.

Bill’s Author Cites Doctors’ Financial Ills

The author of the bill for insurance companies to pay for those medications is Assemblyman Keith Richman (R-Northridge), the Legislature’s one physician. With many medical groups facing insolvency, doctors simply cannot afford medication for severely ill patients, Richman said.

“Health care is in a crisis,” Richman said, adding that Davis is doing little to address doctors’ financial troubles. “Medical groups are facing bankruptcy.”


Although the Davis administration’s positions on all of those bills have agitated supporters, the bill dealing with drug addiction and alcoholism has most angered key Democrats, among them Burton.

“It’s government’s role to protect consumers,” Burton said. “Carrying the water of the HMOs is not their job.”

The administration called the bill, SB 599 by Sen. Wes Chesbro (D-Arcata), “premature” and said: “We do not believe the data is sufficient to determine the potential cost impact of requiring this coverage in California.”

Representatives of HMOs scoff at the notion that the department is protecting them.

“They are our regulator,” California Healthcare Assn. spokesman Bobby Pena said of Zingale’s department. “We are dealing with them on regulation, legislation and implementation, going toe-to-toe with them.”

In many instances, Zingale said, the bills would force his department to become more deeply involved in mediating disputes between physicians and health insurance companies.

“We don’t want to get sucked into the managed care civil war,” Zingale said. “It will divert department staff who are working for patients.”


Burton and Speier’s letter was dated Aug. 27, two days before Davis unveiled his health care proposal for the year. At the time, the governor proclaimed that his plan would amount to an “expansion of California’s groundbreaking patient bill of rights,” which he signed into law in 1999.

But with only four days left in the legislative session, it remains unclear whether the governor can win legislative approval of the proposal. Though Davis’ proposal has some support, it includes provisions bitterly opposed by doctors. The measure would require that doctors provide care to patients for up to one year after HMO contracts terminate, although they would continue to be paid during that time. If they fail to do so, they could face jail time.

The proposal also would add to the list of conditions under which health plans would be barred from disrupting existing doctor-patient relationships.

Disputes between doctors and health insurers have forced patients to find new physicians in the middle of their contract year. Earlier this year, the Sutter Health network temporarily ended its contract with Blue Cross of California, displacing 50,000 patients in Northern California.

“The titans fight it out and the patients get used as pawns,” Zingale said. “The governor wants to give patients continuity of care.”

The combatants in these disputes also are among the titans when it comes to spending on state politics.


Health Insurers Become Major Donors

Many major for-profit health insurance companies backed Davis’ opponent, former Atty. Gen. Dan Lungren, in the 1998 campaign. Now, however, they are major donors to the governor. Blue Cross, PacifiCare, Health Net and Blue Shield have donated at least $428,000 to Davis since 1998, with the bulk of that coming since his election in November 1998.

Zingale said donations have “zero” influence on his decisions. What’s more, he said, he has no idea how much the health care industry has given to his boss.

The California Medical Assn., which represents physicians, has sponsored two fund-raisers for Davis since he took office, contributing $100,000 to him, including $50,000 in May. The medical association regularly is one of the Capitol’s top spenders on lobbying, including $752,000 in the first half of this year, and $1.38 million last year. Still, the association has fought the administration on several fronts.

Physicians’ Group Files Lawsuit

“We have been frustrated in trying to come to agreement on a number of bills where the administration seems to be representing the same position as the HMO industry,” said Steve Thompson, chief lobbyist for the physicians’ group.

The medical association filed a lawsuit last week to block the administration from implementing regulations that would require medical groups to publicly reveal details about their solvency. Zingale has said consumers and doctors will ask more questions--and perhaps make different decisions about which groups to visit--once they have that information.

The California Medical Assn. alleges that the regulations would require that medical groups make public so much information that doctors would be unable to bargain effectively with health plans over reimbursement rates for treating patients. A hearing is set for later this month.


One of the year’s hardest-fought measures is a bill, AB 1600, pushed by the physicians to give them and others the right to sue if they believe that health insurance contracts are unfair under the law. As it is, the Department of Managed Health Care has the legal authority to resolve such disputes, but it has declined to do so.

The bill’s authors, Assemblyman Fred Keeley (D-Boulder Creek) and Richman, assumed that based on statements in private meetings, the administration would not oppose the bill. But at a hearing two weeks ago, the Department of Managed Health Care’s main lobbyist, Herb Schultz, announced that the department had “grave concerns” about giving doctors the right to sue.

“That is the first I’ve heard of that,” Keeley said at the hearing, visibly angry at what he saw as a surprise attack. “That is not the rules of engagement we operate by.”

Zingale said that while permitting physicians to sue health plans might have merit, he doubts there is sufficient time left in the year to fully work out details.

“It’s a grand idea with very little time,” Zingale said.