healthcol//1stjc/21inches/mark2nd
BEN SULLIVAN Staff Reporter
They’re at it again. State Sen. Herschel Rosenthal, D-Van Nuys, and Keith Bishop, commissioner of the Department of Corporations, have been waging a letter-writing war against each other over the pending mergers of Health Systems International with Foundation Health Corp., and FHP International Corp. with PacifiCare Health Systems Inc.
Now they’ll get a chance to talk the matter over face-to-face.
Rosenthal, who chairs the Senate Insurance Committee, had earlier sent Bishop a pair of letters asking him to delay the mergers until the Legislature can weigh in on the issue.
Specifically, Rosenthal wants time to submit legislation that would require the Department of Corporations to ensure that HMO mergers would not lead to reductions in service and competition.
It took Bishop two weeks to respond, but when he did it was to tell Rosenthal to not hold his breath.
“I have given careful thought to your suggestion,” Bishop wrote in his three-page response. “I have concluded that any delay in reaching a decision would be contrary to the public interest and unnecessary.”
That wasn’t what Rosenthal wanted to hear. So he quickly fired off another letter, summoning him to appear before Senate committee hearings Rosenthal has scheduled March 5.
“I do not share your view, and intend to explore this matter further with you,” Rosenthal wrote. “I look forward to your testimony.”
Right now, Bishop still holds the cards. Since Rosenthal’s legislation hasn’t gotten to square one, Bishop is free to approve the merger at any time.
Addicts need not apply
Budget cuts of another sort will raise crime and public health problems across the state, unless offset by local funding, according to the UCLA Center for Health Policy Research.
The UCLA study determined that new rules cutting federal aid for 43,000 Californians undergoing drug treatment “mean that there will be less drug treatment, which has been shown to reduce crime and cut other costs associated with substance abuse,” according to Carole Gresenz, an economist at the Rand Corp. in Santa Monica, who helped author the report.
The cuts, which went into effect Jan. 1, mandate that people disabled by drug or alcohol abuse are no longer eligible to get monthly payments from federal disability insurance and health insurance from Medi-Cal or Medicare.
Because the recipients could receive payment only when they were undergoing substance abuse treatment, the cuts eliminate a major motivation for many to seek help for their addiction. Without local moneys to make up for the budget cuts, the report concludes, many will return to their addictions and to crime to help support their habits.
Haug’s here
The Healthcare Association of Southern California named Bill Haug, president and CEO of the Motion Picture and Television Fund, as its 1997 chairman.
Haug will head the health care association’s 17-member board of directors in setting the group’s agenda and prioritizing lobbying efforts.
The association is the inheritor to the 73-year old Hospital Council of Southern California, which changed its name in 1995.
The Motion Picture and Television Fund, which Haug has headed since 1988, is a non-profit focused on health services. A sister organization, MPTF Corp., in Woodland Hills, is a holding company for the fund that owns a 256-bed hospital and a skilled nursing and long-term care facility on a 40-acre campus in Woodland Hills.
Before joining the motion picture fund, Haug spent five years as president and executive director of the 350-bed California Hospital Medical Center in Los Angeles and another five as chief operating officer at Desert Hospital District in Palm Springs.
All’s not well at WellPoint
A federal judge in Detroit issued a temporary injunction blocking Woodland Hills-based WellPoint Health Network’s proposed purchase of the group health business of John Hancock Mutual Life Insurance Co.
The injunction came as the result of a lawsuit filed by SelectCare, a provider-sponsored managed care organization based in Michigan. SelectCare and John Hancock have jointly provided health care services to 400,000 enrollees in southeast Michigan in recent years and SelectCare argued in court that it had the right to approve the assignment of contractual obligations and the disclosure of confidential information to outside parties, which presumably would have happened under the WellPoint deal.
The deal, which had been valued at nearly $88 million, is now on hold until at least March 1, representatives of the companies have said. It was to have closed at the end of January.
Last year WellPoint bought the health business of Massachusetts Mutual Life Insurance Co.
