HMOS AIM TO KILL BALLOT MEASURES : PROPOSITIONS OFFER CHOICES ON HEALTH CARE MANAGEMENT.

Byline: Dawn Yoshitake Daily News Staff Writer

Sitting on the set of a mock newscast, twins are interviewed by a reporter.

One twin, labeled Proposition 214, espouses changes to managed health care more sweeping than those favored by the other, Proposition 216. As the debate wraps up, an announcer steps in and declares that both are bad.

The TV ad, launched three weeks ago, marks the first salvo fired by a coalition of managed health care companies that wants to kill both initiatives appearing on the Nov. 5 ballot.

While differing in some of the particulars, Prop. 214 and Prop. 216 both zero in on health maintenance organizations.

The initiatives would end financial incentives that medical professionals get for denying treatment. They would require that patients receive information on all available treatment, even if it's not covered by the provider.

Such proposals take direct aim at HMOs and their cost-cutting ways. But, by extension, Prop. 214 and Prop. 216 would apply to doctors, nurses and physician groups that contract with insurance providers.

Other elements of the initiatives include whistle-blower protection for doctors, nurses and licensed care givers; requiring written criteria for denial of care, and requiring a physical exam and written explanation to a patient when care is denied.

``These changes are needed because the landscape of health care has changed,'' said Kit Costello, president of the Sacramento-based California Nurses Association, which backs Prop. 216.

``It's a race to the bottom line. In managed care, the only way to make money is by rationing treatment,'' he said.

Initiative supporters believe that state lawmakers have been too timid in making HMOs more responsive and accountable to consumers.

But if proponents of the two propositions share a distrust of the medical establishment and disdain for legislative efforts, the backers of the two ballot measures also have some significant differences.

Prop. 216, the Patient Protection Act, would create a nongovernmental, voluntary watchdog group to ensure the proposed law is followed, establish a self-funding mechanism and require a two-thirds vote by the Legislature to make any changes to the measure. In contrast, the Legislature would need only a simple majority to alter Prop. 214.

Ralph Nader, consumer advocate and supporter of Prop. 216, said the Patient Protection Act is stronger than Prop. 214.

``What is the point of going with an initiative (like Prop. 214) if you only require a simple majority? It's easy to get a simple majority,'' he said.

Nader, who was nominated as the Green Party's presidential candidate, noted that Prop. 216 will be self-funded by levying fees on health care executives' salaries and the proceeds from company mergers and conversions to for-profit HMOs. The fees could raise as much as $5 billion over five years and fund the enforcement of the new law.

Harvey Rosenfield, author of the auto insurance reform initiative, Prop. 103, is co-author of Prop. 216.

Supporters of Prop. 214, the HMO Patient Rights Act, note that their measure is more inclusive by encompassing nonlicensed medical workers as well as doctors and nurses.

``Our initiative focuses on health care and managed care and doesn't get off on taxes and government agencies,'' said Beth Capell, campaign manager for Prop. 214.

Supporters include Health Access, a coalition of health-care-reform organizations, and Neighbor-to-Neighbor, a health care advocacy group. Both groups focus on changing health care policies and are funded by members, along with grants and donors, including the Service Employees International Union.

``Our initiative doesn't need any funding and it may even save large employers money because it requires insurance companies to provide information that may help companies purchase health care more carefully,'' said Capell.

She added that the simple-majority rule is designed for flexibility. ``If it turns out there are problems with the initiative in implementing it, changes will be needed.''

Nader blasts Prop. 214, calling it a ``Trojan horse.'' He declares, ``SEIU, which has many members working for Kaiser (an HMO), is pushing forth an initiative to destroy Prop. 216 and arrange a sweetheart deal for its union with Kaiser.''

The Taxpayers Against Higher Health Costs coalition, largely funded by the HMO industry, says there are big problems with both initiatives. The group predicts that medical expenses will rise if either proposition passes.

The coalition's advertisements warn that the measures will drive up costs by expanding government's role and requiring more staffing at hospitals and other medical centers.

Those costs already are on the rise. A report prepared for a taxpayers coalition, Barents Group LLC, said the state's health care costs will climb by 5.8 percent to 12.1 percent - or by as much as $2.7 billion - in 1997.

``As costs go up, small employers will clearly drop their health care,'' said Allan Zaremberg, a spokesman for the California Chamber of Commerce and the coalition.

The HMO industry finds problems in the wording of both initiatives, including the provisions about bonuses and incentives.

Kaiser Permanente of Southern California was embroiled in a controversy last year about its business plan, which linked doctor compensation to reducing pharmacy costs. Bonuses also were tied to reducing hospital stays to 253 days per 1,000 members in 1995.

Kaiser officials contend that the business plan did not refer to individual doctors, but to physician groups that achieved those benchmarks.

``There (are) no individual incentives, so clearly that provision in the initiatives (would) not apply to us,'' said Jim Anderson, a Kaiser spokesman. ``Our physicians are concerned for their patients' well-being. . . . This is a practice that has been in place for years and will continue.''

A few cost-cutting programs, however, have gotten some health plans in trouble.

In 1994, family members for the late Nelene Fox of Riverside won an $89 million jury award against Woodland Hills-based Health Net. Fox died of breast cancer after the company refused to pay for a bone marrow transplant to treat the disease. The family and Health Net subsequently agreed to an undisclosed settlement smaller than the original judgment.

PROP 214 & PROP 216 How they are the same:

- Ban financial incentives to doctors or nurses for denying care.

- Prohibit ``gag orders'' against doctors and other medical professionals for critizing an HMO and advocating a patient's needs.

- Allow doctors and nurses to make decisions regarding a patient's treatment, rather than HMO administrators.

- Require a patient receive an exam and written explantion when treatment is denied.

- Order state health officials to set ``safe'' staffing levels.

- Require guidelines on how HMOs can deny treatment.

How they differ: Prop. 214 (Health Care Patient Act)

Requires a simple majority of the Legislature to make changes in the law.

Includes all employees in the health care industry, not just licensed professionals.

Health care companies would not only be prevented from firing healthcare workers who advocate a patient's right, but they would also have to show ``just cause'' before firing a health care employee or contractor.

Prop. 216 (Patient Protection Act)

Requires a two-thirds vote of the Legislature to make changes in the law.

Establishes a watchdog group to enforce the law.

Funds up to $5 billion in health care to the poor via fees on HMO mergers and taxes on chief executives' compensation in excess of $2 million.

CAPTION(S):

Box

Box: PROP 214 & PROP 216 (see text)

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