Sign of the times: California opens department to regulate HMOs

With HMOs deeply embedded and deeply troubled in the state, California sets up the nation's first regulatory agency specifically for managed care.

By Leigh Page, AMNews staff . July 24, 2000.

Managed Care: What's Next?"
With the managed care system drawing complaints from all quarters, doctors, patients, payers and even insurers themselves found themselves looking for alternatives to a concept that hadn't met its promise of improving care while reducing costs. This 2000-02 occasional series highlighted what physicians and others were doing to come up with a way to improve the system -- or replace it with something else.

The director of the brand-new California Dept. of Managed Care has come to raise HMOs, not to bury them. Armed with a generous budget and a raft of new laws that he calls the strongest in the country, Daniel Zingale hopes his department can rebalance a managed care system that many think has gotten out of control.

"Let's restore Californians' faith in their managed health care system," Zingale recently told a meeting of HMO executives.

The 40-year-old director and his boss, Gov. Gray Davis, have a two-pronged strategy for the nation's first regulatory agency developed exclusively for managed care, which assumed regulatory powers on July 1.

First, the state's mostly for-profit HMOs must rediscover the industry's original goal of preventive care.

"Prevention has become the central passion of my professional career," said Zingale, whose last job was director of the AIDS Action Council in Washington, D.C. He told the HMO executives that "with dollars saved by keeping more enrollees healthy, there will be no excuse for not providing those who are in need with quality care."

Second, Zingale wants to stabilize California's financially shaky managed care system, which has put many doctors' groups at the edge of bankruptcy. This will involve his financing skills from another old job, working for Davis when he was state controller.

It's safe to say that few so far are matching Zingale's zeal. Zingale said he feels like a new sheriff in town, who meets with suspicion everywhere he goes. HMO executives think he should campaign hard to keep costs in check. Patient advocates want him to go after the plans with hammer and tongs and levy heavy fines. Doctors want him to help them win adequate reimbursements. [...]