Opinion

Brown sharpens teeth in HMO regulation

A photo illustration depicting a medicine and regulation. (Image: one photo, via Shutterstock)

With Gov. Brown’s attention on landmark legislation to fight climate change, to address financing of wildfire damage and to give legal teeth to the #MeToo movement, a new law governing HMO mergers was bound to get drowned out. But everyone who was party to the California patients’ rights rebellion of the 1990s knows the governor’s signature on the new law is a very big deal.

The new law gives the Department of Managed Health Care stronger oversight over health plan mergers and authority to approve, deny or impose conditions on these deals.

I was running the nation’s leading HIV/AIDS advocacy organization in Washington, DC when, in 1999, I received a call from California Gov. Gray Davis. He and the state Legislature, addressing an uproar from HMO consumers, created a rare new government agency dedicated to defending the rights of those consumers.

But everyone who was party to the California patients’ rights rebellion of the 1990s knows the governor’s signature on the new law is a very big deal.

At the time, this new agency would be the largest health care reform project since The Great Society. But the idea wasn’t to be big; it was to create something radically different, not just another bland bureaucracy removed from the real lives and struggles of the people. And certainly not one that answered to lobbyists and the HMO C-Suite.

Davis asked me to move back to California to serve as founding director of the new entity and to bring the spirit of the HIV/AIDS patients’ rights revolution with me.

We started by throwing out the tired government org chart template and instead built everything around an HMO Help Center and consumer hotline. With the Help Center as its beating heart, the new Department of Managed Health Care broke the mold as an unapologetic champion protecting consumers through tough oversight of the state’s HMOs.

In the first few years, the Department eliminated a long backlog of consumer complaints from the previous regulator. It shut down an HMO that was failing consumers. It filed big fines against one of the state’s biggest HMOs. And its reputation was as an aggressive patient rights advocate — health advocates practically had to remind themselves that it was a governmental organization.

The Department even dipped into the national patients’ rights debate, helping to kill a fee on patients in a bill that was on the fast track in Congress.

I am proud that two governors, thousands of disciplinary actions and several department directors later, that boldness is still thriving.

Brown’s recent signing of Assembly Bill 595 is case in point.

The new law gives the Department stronger oversight over health plan mergers and authority to approve, deny or impose conditions on these deals. This is important because consumers have very little say in health plan mergers that often uppend their health care. A number of mammoth mergers in recent years affected millions of California consumers, including last year when pharmacy giant CVS acquired Aetna.

The corporate titans behind these mergers promise lower costs and increased efficiency in care. But there’s no one to hold them accountable to those promises, which is made even more difficult at a time when Californians are even more skeptical than ever about Washington DC looking out for them.

That leaves the small but mighty Department of Managed Health Care, empowered by the new merger law. The department today is led once again by a long-time consumer advocate, Shelley Rouillard. She learned first-hand about following the lead of patients when she worked for Health Rights Hotline, a highly respected non-profit that we used as the model for the creation of the new Department in 2000.

Eighteen years after the birth of the nation’s first government entity dedicated to protecting HMO patients, I can think of nowhere better to place our trust in seeing that mergers and acquisitions do not adversely affect the quality and cost of our health care. At a time when the top five health giants already control 90 percent of our health care market, I can think of nothing more worthy than finally giving voice to the millions of consumers whose health would otherwise be at the mercy of these huge companies.

The next governor will take responsibility to implement this powerful new law. Not only will he be putting HMO consumers back in the driver’s seat,  but he’ll also be showing that, even in this cynical time, getting government on the side of the people isn’t that hard. It just takes vision and the will to get it done.

Ed’s Note: Daniel Zingale is the senior vice president of The California Endowment.


Support for Capitol Weekly is Provided by: