Associated Press

The new state Department of Managed Health Care, part of an overhaul of the beleaguered HMO system, opens Saturday, with the challenge of restoring consumer confidence after one of the state’s biggest political scandals in years.

The new department charged with the protection and education of 23.5 million Californians covered by 56 health maintenance organizations opens on the heels of allegations that insurance chief Chuck Quackenbush used millions of dollars from insurance settlements to further his own political career. Quackenbush resigned Wednesday.

Daniel Zingale, the director of the new managed health care department, said he would rather not concentrate on the Quackenbush fallout.

“I’m focused on the fact that Californians have lost faith in our managed health care system, and our primary concern is to restore faith in that system,” Zingale said.

The new agency, which Zingale says is the first of its kind in the nation, was established as part of a sweeping package of legislation that Gov. Gray Davis approved last year to improve California’s managed care system.

Armed with a $34 million annual budget and, eventually, a 400-member staff, the department’s mission is to regulate managed-care plans, force HMOs to provide good care, resolve consumer complaints about treatment, protect consumers from the insolvency of health care and educate consumers about their medical rights.

The new department assumes the duties previously under the umbrella of the Department of Corporations, which was widely criticized for being ineffective and unresponsive.

The department also has the added function of setting up a new independent review board for patients who contend a managed-care plan has unfairly denied, delayed or changed treatment. It also will have a Financial Standards Solvency Board and an Office of the Patient Advocate, a sort-of ombudsman style entity to act on behalf of patients.

“We’re going to watch the new department closely and expect strong regulatory action early,” said Jamie Court, advocacy director with the Foundation for Taxpayer and Consumer Rights. “When you’re dealing with the life and death of HMO patients, the evil is indifference and laconic responses.”

Consumers are angry, Court said. For years, they have watched health maintenance organizations reward their executives and shareholders while denying patient treatment – all with little or no punishment from the Department of Corporations’ health unit.

According to the consumer group, the former health care unit received as many as 7000 consumer complaint calls per month in 1998.

Zingale acknowledges the daunting political and bureaucratic task ahead of him but emphasizes that he thinks that health care providers, consumers and managed-care plans all share in the responsibility of reforming the system. “I don’t think the government alone can solve the problem,” he said.

To start, he said the department will provide a number of new services for patients, including a 24-hour consumer help hot line (888-HMO-2219), a toll-free phone line for physicians with questions (877-525-1295) and an online database of HMO phone numbers, accessible via its Website (www.hmohelp.ca.gov).

All are expected to be operational on Saturday.

Zingale, a former patients-rights advocate, said his department will aim to make managed care what it was designed to be.

“We’ve strayed from the founding principle … to prevent health problems from the front end and save precious health care dollars for when people need it most,” he said. “When the government has to require HMOs to provide preventive health care – that’s cause for concern.”

The managed-care bill package approved last fall included mandates that HMOs provide coverage for preventive treatments for diabetes and breast cancer. One bill also gives consumers the right to sue their HMOs. Those laws go into effect Jan. 1.

Zingale disagrees with the notion that there is an inherent conflict for a department charged with ensuring the solvency of managed-care plans while protecting consumer rights.

“I see those goals as complementary,” he said. “The central challenge is for the new department to identify the common ground between quality of care and financial solvency and put that synergy to work.”

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