HMO Association Chief Leaves After Four Tough Years

[CAL/AAEM News Service]

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From: California Healthline [mailto:CALIFORNIAHEALTHLINE@ADVISORY.COM] 



HMO Association Chief Leaves After Four Tough Years

by Stephen <mailto: sjrobitaille@earthlink.net> Robitaille

January 06, 2003

Walter Zelman, chief executive of the California Association of Health Plans (CAHP), left his post at year's end, calling his decision a personal one that will give him the chance to take a well-deserved rest from the state's punishing managed-care landscape. 

And after a four-year stint at the helm of California's HMO trade association, in an era which included numerous legislative battles, widespread public and provider frustration with managed care, and the establishment of the nation's toughest HMO watchdog agency, Zelman will have plenty of unwinding to do. 

During his tenure, Zelman earned a reputation as somewhat of an enigma. Colleagues and adversaries praised him as a tough negotiator; a skilled advocate, who made effective use of public relations to advance CAHP's agenda; and a thoughtful analyst of public policy, who argued in articulate fashion for greater coverage of the uninsured and improvements in health care quality. 

Yet consumer advocates also voiced a lingering distaste for the fact that Zelman, a former advisor to President Clinton and executive director of California Common Cause, a nonprofit advocacy group that works for campaign finance reform, went to work for the HMO industry at all. 

In a recent interview, the 58-year-old Zelman remained pugnacious and unrepentant over his choices, saying managed care has saved hundreds of billions of dollars nationwide in health care costs-money which has helped provide health insurance coverage to more people and funded other necessary services. 

"It's a personal decision based on the feeling that I need a bit of a change of direction. I need to relax a little bit. I need to be out of the line of fire a bit. And I need to put more time into my family, who is in Southern California," said Zelman. "I never saw this job as going from one side to the other because I believe in managed care. I know it has saved money, and saving money is good because that means money is available for other things-more health care, the environment, cops on the street, education." 

HMO Association Chief Took Over Amid Tumultuous Times

When Zelman came to CAHP from Harvard University, where he had been a professor at the School of Public Health, the HMO industry faced the California equivalent of angry villagers at the castle gates, with pitchforks in hand. Public frustration with the strictures of managed care had prompted state legislators to start crafting competing packages of HMO reform bills-more than 20 in all. 

CAHP fought hard to soften the landmark legislation, the centerpiece of which was the creation of the state Department of Managed Health Care (DMHC), but ended up opposing only one component of the plan, which allowed patients to sue their HMOs. Yet Zelman won kudos from Daniel Zingale, who is chief of the new DMHC, for the persuasiveness of his arguments on the need for cost containment and for his commitment to quality improvement. 

"I have nothing but good things to say about Walter. I hold him in high regard," said Zingale, himself a former AIDS activist. "The history of consumer advocacy always gave us a starting point, but he has always been one of the most thoughtful, knowledgeable people on the scene. He's very patient, and his arguments are always well constructed." 

"I think he has altered the debate on managed care in terms of the importance of cost containment. I think all of us have come to realize that affordability is a critical piece of patient protection," said Zingale. "The rising costs of health insurance have certainly hammered that home. Our first priority as a regulator has been to ensure access to care when HMO's inappropriately deny care, but we also feel it's important to contain costs." 

Accomplishments, Frustrations

Zelman pointed to the end product of the HMO reform process, and CAHP's ability to compromise on a package that in his words "horrified" large portions of the HMO industry in its early incarnations, as one of the highlights of his tenure. 

Another accomplishment for Zelman, also in the realm of cost containment, was passage of a law in the 2002 session that will require a cost-benefit analysis on all proposed legislation that would place coverage or treatment mandates on health plans. 

Despite his reputation as a persuasive advocate, Zelman said one of his most enduring frustrations was his inability to get the message across that HMOs were not the health care bad guys as characterized by consumer groups, physician organizations, and large sectors of the public. Rather, he believes they are brokers of competing demands between patients and those who foot their medical bills. 

"I have had a high level of frustration at being unable to consistently get audiences to understand the fundamental conflicts that run under health care economics," said Zelman. "On the one hand, you have a society that understandably wants all these benefits, options, new technologies, but isn't paying for them out of their own pocket. On the other, you have employers and government wanting to control costs. The health plans are in the middle." 

"The health plan is the arbiter of the demands of the consumer and the needs of the employer and government, who pay for it all. Part of this arbitration is cost control. Someone has to do it, but it is certain to produce ill will from everyone involved. Yet it has to be done, or we will have nine million uninsured in California, not six million," said Zelman. 

Consumer Advocates Still Simmer

What still puzzles some consumer advocates was why someone with Zelman's background felt he had to head up an HMO industry trade group, and defend an industry that has been cited in numerous, high-profile cases of restricting or refusing necessary medical care. 

"I think we'd call it shocking that he went there," said Betsy Imholtz, director of the San Francisco office of Consumers Union, a national advocacy organization. "My hope is now that he'll go on and work with us for universal health care-come back to the advocacy community." 

Zelman countered that the savings from managed care have helped provide health insurance benefits to hundreds of thousands of Californians, who otherwise would have joined the ranks of the uninsured. 

"You look at the last three years-the efforts of consumer advocates have been about giving well-insured people more coverage. It's not an illegitimate goal, but it has not been about making sure that everyone has coverage," said Zelman. "I have had a long-standing concern about the uninsured and affordability of health care. Lots of my liberal consumer-advocate friends are advocating what is in effect upper-middle-class health care." 

Imholtz also criticized CAHP and health care quality supporter Zelman for opposing successful Consumers Union-sponsored legislation in 2002 that mandate public reports on death rates, by hospital and individual surgeon, for a number of common surgical procedures. 

Zelman said that he personally supported the legislation, but that opinion among member HMOs was mixed, which doomed any hope of CAHP support. 

"The association functions on consensus, and while the majority of plans were willing to support it, some plans didn't want it," said Zelman. "While I would've liked to have seen us support that legislation, some plans felt differently."

HMO Industry Battled Physicians, Hospitals

While the HMO industry's battles with consumers have quieted substantially after passage of the legislative reform package, the action has been heated with doctors and hospitals. The California Medical Association (CMA) pushed repeatedly and unsuccessfully for legislation that would've allowed doctors to bargain collectively with HMOs, while hospitals pushed successfully for new prompt payment laws. 

Yet both Jack Lewin, CMA's executive director, and Duane Dauner, president and chief executive of the California Healthcare Association, the state's hospital trade association, praised Zelman's tenacity and acumen. 

For his part, Zelman said he has worked to improve relations between medical groups and health plans. Although attempts to find common ground between plans and hospitals today appear fated to fall prey to disputes over spiraling hospital costs, their impact on rising health insurance premiums, and how to rein them in. 

However, he is also looking forward to viewing that battle from the sidelines. "I'm sorry that we had to play so much defense, that we haven't been able to offer our ideas on how we could improve the system. I think we've made some progress in the relationships between medical groups and health plans," said Zelman. "Both sectors care about the uninsured, [and] Medi-Cal under-funding. Both realize there are improvements to be made in streamlining billing and payment systems, and if we get out of the war zone, we could find more peaceful ground on which to negotiate."

Zelman left CAHP at the end of December and a search is under way for his replacement. 

More on the Web: See Mr. Zelman's <http://www.calhealthplans.com/zelmanbio.htm> biography at the California Association of Health Plans Web site. 


Brian Potts 
Managing Editor, CAL/AAEM News Service 
MS-IV, UC Irvine 
MD/MBA candidate 
pottsbri@yahoo.com


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<P>-----Original Message-----</P>
<P>From: California Healthline [</FONT><A href="mailto:CALIFORNIAHEALTHLINE@ADVISORY.COM"><U><FONT color=#0000ff size=2>mailto:CALIFORNIAHEALTHLINE@ADVISORY.COM</U></FONT></A><FONT size=2>] </P>
<P></P>
<P>HMO Association Chief Leaves After Four Tough Years</P>
<P>by Stephen &lt;</FONT><A href="mailto: sjrobitaille@earthlink.net"><U><FONT color=#0000ff size=2>mailto: sjrobitaille@earthlink.net</U></FONT></A><FONT size=2>&gt; Robitaille</P>
<P>January 06, 2003</P>
<P>Walter Zelman, chief executive of the California Association of Health Plans (CAHP), left his post at year's end, calling his decision a personal one that will give him the chance to take a well-deserved rest from the state's punishing managed-care landscape. </P>
<P>And after a four-year stint at the helm of California's HMO trade association, in an era which included numerous legislative battles, widespread public and provider frustration with managed care, and the establishment of the nation's toughest HMO watchdog agency, Zelman will have plenty of unwinding to do. </P>
<P>During his tenure, Zelman earned a reputation as somewhat of an enigma. Colleagues and adversaries praised him as a tough negotiator; a skilled advocate, who made effective use of public relations to advance CAHP's agenda; and a thoughtful analyst of public policy, who argued in articulate fashion for greater coverage of the uninsured and improvements in health care quality. </P>
<P>Yet consumer advocates also voiced a lingering distaste for the fact that Zelman, a former advisor to President Clinton and executive director of California Common Cause, a nonprofit advocacy group that works for campaign finance reform, went to work for the HMO industry at all. </P>
<P>In a recent interview, the 58-year-old Zelman remained pugnacious and unrepentant over his choices, saying managed care has saved hundreds of billions of dollars nationwide in health care costs-money which has helped provide health insurance coverage to more people and funded other necessary services. </P>
<P>"It's a personal decision based on the feeling that I need a bit of a change of direction. I need to relax a little bit. I need to be out of the line of fire a bit. And I need to put more time into my family, who is in Southern California," said Zelman. "I never saw this job as going from one side to the other because I believe in managed care. I know it has saved money, and saving money is good because that means money is available for other things-more health care, the environment, cops on the street, education." </P>
<P>HMO Association Chief Took Over Amid Tumultuous Times</P>
<P>When Zelman came to CAHP from Harvard University, where he had been a professor at the School of Public Health, the HMO industry faced the California equivalent of angry villagers at the castle gates, with pitchforks in hand. Public frustration with the strictures of managed care had prompted state legislators to start crafting competing packages of HMO reform bills-more than 20 in all. </P>
<P>CAHP fought hard to soften the landmark legislation, the centerpiece of which was the creation of the state Department of Managed Health Care (DMHC), but ended up opposing only one component of the plan, which allowed patients to sue their HMOs. Yet Zelman won kudos from Daniel Zingale, who is chief of the new DMHC, for the persuasiveness of his arguments on the need for cost containment and for his commitment to quality improvement. </P>
<P>"I have nothing but good things to say about Walter. I hold him in high regard," said Zingale, himself a former AIDS activist. "The history of consumer advocacy always gave us a starting point, but he has always been one of the most thoughtful, knowledgeable people on the scene. He's very patient, and his arguments are always well constructed." </P>
<P>"I think he has altered the debate on managed care in terms of the importance of cost containment. I think all of us have come to realize that affordability is a critical piece of patient protection," said Zingale. "The rising costs of health insurance have certainly hammered that home. Our first priority as a regulator has been to ensure access to care when HMO's inappropriately deny care, but we also feel it's important to contain costs." </P>
<P>Accomplishments, Frustrations</P>
<P>Zelman pointed to the end product of the HMO reform process, and CAHP's ability to compromise on a package that in his words "horrified" large portions of the HMO industry in its early incarnations, as one of the highlights of his tenure. </P>
<P>Another accomplishment for Zelman, also in the realm of cost containment, was passage of a law in the 2002 session that will require a cost-benefit analysis on all proposed legislation that would place coverage or treatment mandates on health plans. </P>
<P>Despite his reputation as a persuasive advocate, Zelman said one of his most enduring frustrations was his inability to get the message across that HMOs were not the health care bad guys as characterized by consumer groups, physician organizations, and large sectors of the public. Rather, he believes they are brokers of competing demands between patients and those who foot their medical bills. </P>
<P>"I have had a high level of frustration at being unable to consistently get audiences to understand the fundamental conflicts that run under health care economics," said Zelman. "On the one hand, you have a society that understandably wants all these benefits, options, new technologies, but isn't paying for them out of their own pocket. On the other, you have employers and government wanting to control costs. The health plans are in the middle." </P>
<P>"The health plan is the arbiter of the demands of the consumer and the needs of the employer and government, who pay for it all. Part of this arbitration is cost control. Someone has to do it, but it is certain to produce ill will from everyone involved. Yet it has to be done, or we will have nine million uninsured in California, not six million," said Zelman. </P>
<P>Consumer Advocates Still Simmer</P>
<P>What still puzzles some consumer advocates was why someone with Zelman's background felt he had to head up an HMO industry trade group, and defend an industry that has been cited in numerous, high-profile cases of restricting or refusing necessary medical care. </P>
<P>"I think we'd call it shocking that he went there," said Betsy Imholtz, director of the San Francisco office of Consumers Union, a national advocacy organization. "My hope is now that he'll go on and work with us for universal health care-come back to the advocacy community." </P>
<P>Zelman countered that the savings from managed care have helped provide health insurance benefits to hundreds of thousands of Californians, who otherwise would have joined the ranks of the uninsured. </P>
<P>"You look at the last three years-the efforts of consumer advocates have been about giving well-insured people more coverage. It's not an illegitimate goal, but it has not been about making sure that everyone has coverage," said Zelman. "I have had a long-standing concern about the uninsured and affordability of health care. Lots of my liberal consumer-advocate friends are advocating what is in effect upper-middle-class health care." </P>
<P>Imholtz also criticized CAHP and health care quality supporter Zelman for opposing successful Consumers Union-sponsored legislation in 2002 that mandate public reports on death rates, by hospital and individual surgeon, for a number of common surgical procedures. </P>
<P>Zelman said that he personally supported the legislation, but that opinion among member HMOs was mixed, which doomed any hope of CAHP support. </P>
<P>"The association functions on consensus, and while the majority of plans were willing to support it, some plans didn't want it," said Zelman. "While I would've liked to have seen us support that legislation, some plans felt differently."</P>
<P>HMO Industry Battled Physicians, Hospitals</P>
<P>While the HMO industry's battles with consumers have quieted substantially after passage of the legislative reform package, the action has been heated with doctors and hospitals. The California Medical Association (CMA) pushed repeatedly and unsuccessfully for legislation that would've allowed doctors to bargain collectively with HMOs, while hospitals pushed successfully for new prompt payment laws. </P>
<P>Yet both Jack Lewin, CMA's executive director, and Duane Dauner, president and chief executive of the California Healthcare Association, the state's hospital trade association, praised Zelman's tenacity and acumen. </P>
<P>For his part, Zelman said he has worked to improve relations between medical groups and health plans. Although attempts to find common ground between plans and hospitals today appear fated to fall prey to disputes over spiraling hospital costs, their impact on rising health insurance premiums, and how to rein them in. </P>
<P>However, he is also looking forward to viewing that battle from the sidelines. "I'm sorry that we had to play so much defense, that we haven't been able to offer our ideas on how we could improve the system. I think we've made some progress in the relationships between medical groups and health plans," said Zelman. "Both sectors care about the uninsured, [and] Medi-Cal under-funding. Both realize there are improvements to be made in streamlining billing and payment systems, and if we get out of the war zone, we could find more peaceful ground on which to negotiate."</P>
<P>Zelman left CAHP at the end of December and a search is under way for his replacement. </P>
<P>More on the Web: See Mr. Zelman's &lt;</FONT><A href="http://www.calhealthplans.com/zelmanbio.htm"><U><FONT color=#0000ff size=2>http://www.calhealthplans.com/zelmanbio.htm</U></FONT></A><FONT size=2>&gt; biography at the California Association of Health Plans Web site. </P></FONT><BR><BR><STRONG>Brian Potts <BR>Managing Editor, CAL/AAEM News Service</STRONG> <BR>MS-IV, UC Irvine <BR>MD/MBA candidate <BR>pottsbri@yahoo.com<p><br><hr size=1>Do you Yahoo!?<br>
<a href="http://rd.yahoo.com/mail/mailsig/*http://mailplus.yahoo.com">Yahoo! Mail Plus</a> - Powerful. Affordable. <a href="http://rd.yahoo.com/mail/mailsig/*http://mailplus.yahoo.com">Sign up now</a>
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