Gov. Davis’s HMO Reform Plan Weaker Than Texas Reforms Under George W. Bush

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If HMOs Don’t Disclose Treatment Options Can Help, They Are Not Liable

Governor Davis’s HMO reform plan — announced today at 4:30 pm after most reporters’ deadlines — is weaker than reforms enacted in Texas under George W. Bush.

Most significantly, patients can only sue their HMO in catastrophic cases and if they have a doctor’s note recommending care. (Public employees can now sue without these qualifications.) If patients die because the HMO or HMO doctor failed to disclose a potential cure for them due to financial incentives, patients have no remedy.

“This plan looks like it was drafted behind closed doors with HMO executives and no patients, doctors or nurses present,” said Jamie Court, advocacy director for the Foundation for Taxpayer and Consumer Rights, sponsor of HMO liability measure SB 21. The Foundation requested a meeting with the Governor on behalf of 47 HMO victims with no remedy, but received not response. ” The centerpiece of Davis’s plan is a private, bureaucratic review system not a public civil justice system. Any HMO reform plan a governor would be proud of is not released at 4:30 PM when reporters have no time to research experts’ views on its details. The proposal is weaker than that enacted in Texas under George W. Bush, the only state with an HMO liability law. Doctors and HMOs today have financial incentives not to disclose treatments options and this proposal denies patients the right to sue when HMOs or HMO doctors withhold information about a potential treatment and the patient does not know to get a doctor’s note requesting it. The written outline of the plan appears to be ridden with loopholes, which one can expect when doctors, nurses and patients are left out of the planning process.”

In addition the proposal continues to house HMO oversight in the Business, Transportation and Housing Agency, which is dedicated to business growth not consumer protection. The Agency is also headed by Maria Contreras Sweet, a former board member of Blue Cross of California.

“The culture in Business, Transportation and Housing — the current landlord for HMO oversight — is not that of regulation and consumer protection, but rather one in favor of business growth,” said Court. “A serious HMO oversight plan would transfer authority to an agency dedicated to consumer protection or medical oversight. This plan stinks from the status-quo.”

With regards to the independent review process, Court noted: ” While the details of the external review process described are generally pro-consumer, the review system itself is a bureaucratic mechanism that HMOs can and often do manipulate. In Texas, patients need not go through the review process in most circumstances before they can sue their HMO, Governor Davis’s plan appears to require patients to always go through the process — even when the delay could result in death or injury — unless the harm has already occurred.”

“The loopholes abound in a plan that cosmetically looks aggressive,” said Court, “For instance, the Governor’s plan does require HMO decision-makers to be California doctors, but does not deal with the financial conflicts of interests foisted on doctors by HMOs today. The devil in all these proposals will be in the details as they are worked out in the legislature.”


Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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