Critical Condition: California's Department of Managed Health Care is fighting for its life.
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Read Making a Killing

home / healthcare / in the media

East Bay Express
Jan 16, 2002

by Kara Platoni

Critical Condition: California's Department of Managed Health Care is fighting for its life.

Will a court challenge from Kaiser strip the agency of its power to regulate HMOs after only nineteen months on the job?
Margaret Utterback awoke on the morning of January 26, 1996, with abdominal pain so severe that she wanted to see her doctor right away. The 74-year-old San Leandro resident and Kaiser health plan enrollee promptly dialed a number she thought would connect her to her physician, Dr. Rod Perry, at a Kaiser clinic in Hayward. But according to her family, it took five phone calls for Utterback to get an appointment, and it was eight hours before any medical professional saw her, despite showing up at the clinic almost two hours early, repeatedly begging for an earlier slot, and writhing and moaning aloud in the waiting room.

Once she saw a doctor, it took no time at all for Perry to diagnose Utterback's affliction. He immediately realized that she had a dissecting abdominal aortic aneurysm -- a swollen blood vessel in imminent danger of bursting. But despite the urgency of her often-fatal condition, it took another 45 minutes before Utterback was transported to the Kaiser Hayward Hospital, a mere mile and a half away, and the clinic never gave Utterback even basic emergency treatment such as painkillers or medicine to lower her blood pressure. All of that lost time did not bode well for Utterback. Minutes after she arrived in the emergency room, her aneurysm burst, flooding her entire body cavity with blood. Finally, Utterback was rushed to surgery, although she was given less than a one percent chance of survival. Thirty-six horrific hours later, she was dead.

Margaret Utterback's death unleashed a chain of events so complicated and acrimonious that even six years later, it remains the center of a pitched battle between California's largest health maintenance organization and the first state agency in the country designed to oversee such HMOs. State regulators say the physically active mother of five was let down by several pieces of the Kaiser system -- its advice-nurse line, appointment-scheduling guidelines, waiting room triage system, even the grievance system, which took months to respond to the family's complaints even though state law requires action within thirty days. "Every part of the Kaiser system failed my mother -- not just one," said Terry Preston, Utterback's youngest daughter and legal champion, who convinced the state to launch an investigation of her death.

Although Utterback's daughter did not easily attract the state's attention, regulators finally took a hard line in the case. In May of 2000, the state slapped the Oakland-based Kaiser Foundation Health Plan with a $1 million fine -- the largest ever levied against a California HMO.

But if the state has been forceful, Kaiser's response -- now being defended in an administrative law court in Oakland -- looks exceptionally fierce. Its appeal doesn't focus on the circumstances surrounding Utterback's death; instead, Kaiser's lawyers are throwing down a much larger and more significant legal challenge. They say the nineteen-month-old Department of Managed Health Care unlawfully overstepped its bounds in considering the case of Margaret Utterback. They complain that the agency is attempting to police territory that rightfully belongs to the California Medical Board and the federal government. They even asked a federal judge to hold the fledgling department's director, Daniel Zingale, in contempt of court if he went forward with the case. State lawyers say a finding of contempt could mean jail time for Zingale.

A Kaiser victory could neuter the nation's only state-level HMO watchdog. Kaiser's hardball strategies have convinced its critics that it is trying to intimidate the new director and play federal and state agencies off one another so that certain internal system failures are not regulated at all. Kaiser warns, on the other hand, that it is in danger of being overregulated and unjustly fined, and that the state is now attempting to enforce rules it has never before enforced. Certainly a victory by the Department of Managed Health Care would mean that Kaiser and other health plans could expect more fines and investigations.

The Utterback case will establish the balance of power between the state and the HMOs it licenses. Will the state emerge from an Oakland courtroom with a reaffirmed right to regulate the quality of care received by California's 20 million HMO enrollees, or will it be rendered toothless after only nineteen months on the job?

State regulators say Margaret Utterback had health problems that should have alerted Kaiser to her vulnerability to an abdominal aortic aneurysm. She'd had hypertension for thirty years and been diagnosed at Kaiser for atherosclerosis -- both contributing factors for aneurysm formation. Although Kaiser's appeal emphasizes the danger of aortic aneurysms, data from the Mayo Clinic indicates that the survival rate for those who have surgery pre-rupture is over ninety percent, and the American Heart Association says that even if an aneurysm begins to break apart, patients treated promptly have a fifty percent survival rate.

But the state hopes to prove far more than that Kaiser could have discovered Utterback's developing aneurysm earlier, or handled her case more effectively on that day in 1996. Rather, it argues that Utterback's death was caused by system-wide service failures that also prevent other Kaiser enrollees from accessing urgent care when they need it.

To show a pattern of barriers to access at Kaiser, the state's first formal accusation against the HMO meticulously documented the events of January 26, 1996, with great emphasis on how many times Utterback tried to communicate the seriousness of her condition but was prevented from doing so by institutional protocol. Although disputed by Kaiser in several key regards, the chronology reads like a collaboration between Franz Kafka and Stephen King.

According to the state, Utterback awoke in pain, but didn't know if she was having an emergency or had merely contracted food poisoning from some seafood she'd eaten the night before. At 8:15 she called her eldest daughter, San Ramon resident Barbara Winnie, who hurried over to her mother's house and remained with her for the rest of the day. At 8:30, Utterback made her first call to Kaiser, dialing a number she had used previously to reach the office of Perry, her primary care physician. What she did not know was that the phone number no longer reached Perry's clinic, but a centralized Hayward answering system mostly staffed not by registered nurses, but by unlicensed clerks called "medical assistants." She was put on hold for so long that she eventually hung up.

Around 9:45, Utterback tried calling back. This time, she was able to explain her symptoms, but was told there were no appointments left that day. Utterback persisted, repeating her symptoms and asking to be put through to Perry's office. Had Utterback spoken to someone with medical training, the state contends that her diagnosis would have been immediate because the symptoms she described were classic signs of an aneurysm about to burst, the thirteenth most common cause of death in the United States. Instead, she was advised to call back at 3 p.m. -- more than five hours later -- to request an urgent care appointment for later that evening.

Utterback could not wait that long. At 10:15, she called a third time, this time describing her symptoms to Mally Monton, a sympathetic medical assistant who took the call. Monton offered to send an e-mail to Perry requesting an appointment, and told Utterback that Perry's office would call her back. Although the Kaiser computer system recorded that Monton duly sent the e-mail three minutes later, and while company rules required that a hard copy be placed in Utterback's medical file, the text of that e-mail seems lost to history. Kaiser officials say they don't know what happened to it, despite repeated state requests to produce it. In any case, after reading the e-mail, Perry wrote Utterback a prescription for painkillers instead of giving her an appointment.

By 1:15, Utterback's abdominal pain was getting worse, and she still hadn't heard from her doctor. Frustrated, she called again, and was transferred several times before someone offered to connect her with the patient-assistance desk. She got voicemail instead. Utterback hung up, and immediately called back a fifth time. This time, a medical assistant told her that Perry had not granted her an appointment, but prescribed a narcotic, which Utterback refused. Utterback finally convinced the assistant to give her an appointment for 4:15, although by this time Perry's office had managed to schedule earlier "work-in" appointments for three other patients with lesser symptoms, including someone suffering from "finger pain." Utterback was now so worried that she and her daughter decided to camp out in Perry's waiting room and hope an appointment opened sooner.

But showing up early did not speed things along. The state claims that after Utterback arrived at the Point Eden clinic in Hayward, she spent more than an hour in the waiting room without her condition being assessed by the clinic staff, and despite her very visible discomfort and her daughter's efforts to secure an earlier appointment. The state asserted that a medical assistant responded to Utterback's request to be put in an examination room by looking out into the waiting room, saying "She doesn't look that sick to me," and walking away.

When Perry finally examined Utterback at 4:30 -- fifteen minutes after her scheduled appointment -- he felt the ten-centimeter aneurysm beneath her skin and diagnosed her quickly. Yet when a nurse suggested putting Utterback on a cardiac monitor and asked twice if she should start an IV line, Perry decided against it, and also did not administer oxygen or painkillers. And rather than having his staff order an emergency ambulance, Perry suggested that Winnie drive Utterback to the hospital, although he ultimately ordered a nonemergency ambulance. Emergency personnel who showed up at around 5:15 -- thirty minutes after Utterback was told she had a life-threatening condition yet had been left, untreated, in the examining room -- would later testify that the nurse told them only that the patient had complained of "lower back pain," not that she had an aneurysm on the verge of rupture.

By the time the ambulance crew finally tried to establish an IV line, Utterback was thrashing so wildly from the pain they could not insert it. Her aneurysm burst only minutes after she arrived in the ER, and Utterback lost so much blood that she had to have 24 pints transfused during surgery. According to Preston, her mother received no pain medication during her surgery because it could have lowered her blood pressure, which the medical staff was trying to raise. In fact, although Utterback was admitted to the hospital on a Friday, Preston says she was not given painkillers until Sunday evening, when a visiting non-Kaiser doctor from Stanford took compassion on the family, drawing them aside to explain Utterback's chances of survival and ordering morphine for the dying woman. Soon afterward, Utterback died.
Three years passed before the state investigated Utterback's death. In 1996, the state's HMOs were regulated by the Department of Corporations, which had no power to enforce lapses in access to care or in healthcare quality. The department's primary concern was to regulate the fiscal well-being of HMOs -- to make sure that at the end of the day, they still existed to pay for enrollees' treatments. "Everyone knew it was a joke," said Kevin Reilly, who serves on the executive committee of statewide advocacy group Vote Health. "They were set up to watch over HMOs to make sure that they were financially solvent, but not to look at anything that had to do with quality or access."

But California's health-care landscape was changing quickly in the mid-'90s, creating new pressures to regulate the industry differently. HMO enrollment surged and Kaiser, long considered the gold standard for California health care, was on its way to becoming the nation's largest HMO, with 6.2 million enrollees in California alone. One third of Bay Area residents get their coverage through Kaiser.

Kaiser's roots stretch back to 1938, when industrialist Henry J. Kaiser collaborated with Dr. Sidney Garfield, a surgeon who pioneered prepaid worker health care during the Great Depression. The two first targeted their plan at construction workers on the Grand Coulee Dam, then laborers in the Richmond shipyards. It was a revolutionary idea.
Workers contributed fifty cents a week from their paychecks, and the money was used to open a hospital full of technology not usually accessible to workers, such as X-ray machines and air-conditioning. Doctors would be paid a salary, rather than a per-patient fee, and enrollees were guaranteed care, no matter how severe their malady or how often they needed treatment. Enrollment was extended to the public in 1945.

But in the 1990s, Kaiser, by now known for its progressive thinking, vast research capabilities, and lifelong care of members, felt pressure to contain the rising cost of care. By 1992, Kaiser was already the most expensive managed care plan in the state, and there were more health-care plans on the market than ever. Kaiser attempted a balancing act -- it would compete for market share, while cutting costs at the same time.

Kaiser shortened the length of patient stays, shut down hospitals in Richmond and Martinez, and called off construction of a planned facility in Emeryville. It also replaced expensive personnel such as registered nurses with unlicensed staff, particularly on its advice phone lines. "It mainly boiled down to using fewer people to do the same job -- less people in terms of numbers, but also in terms of less-qualified," said California Nurses Association spokesperson Gerard Brogan. According to the association, Kaiser gained 450,000 new enrollees between 1994 and 1997, yet laid off 1,600 registered nurses. Union-employer relations worsened, and the association engineered six strikes in 1996 and 1997. These changes, which also played out through the rest of the industry, didn't go over well with consumers. Or, as Kaiser CEO David Lawrence wryly joked in 1999, "managed care has gone from being a communist conspiracy to a capitalist conspiracy."

As the HMO industry grew, so did complaints about abuses in the managed-care system. The nurses association warned at the time that understaffing, economic disincentives against hospitalization, and the replacement of advice-line nurses would create the sort of scenario that Utterback faced in 1996. "This wasn't new to Kaiser," Brogan said. "We, along with other individuals, had brought it to their attention that their telephone system was inadequate and dangerous and it appeared to be set up to keep patients away from medical practitioners."
The Department of Corporations simply wasn't equipped to keep up with the demand from disgruntled consumers, taking years to resolve cases and, according to Reilly, nearly as long to even answer the phone.

In 1999, California's legislature responded to public concerns by tightening up on HMOs, passing a diverse 21-bill package that gave patients the right to ask their health plan for a second medical opinion, allowed them to seek punitive damages from their HMO, and created an independent medical review system to examine denials and delays in coverage. It also included a bill sponsored by Assemblywoman Ellen Corbett (D-San Leandro) requiring that health-plan medical phone lines be staffed by people with medical licenses. But the package's chief feature was AB 78, a bill carried by Assemblyman Martin Gallegos, a health-care reformer who represented Baldwin Park as a Democrat, which took the Department of Corporations out of the HMO-regulation business by creating two new state agencies. One was the Office of the Patient Advocate, a public-health education agency that Governor Gray Davis asked Gallegos to lead after he was termed out of office in 2000. The other was the Department of Managed Health Care.

Unlike its predecessor, the Department of Managed Health Care was meant to do more than crunch numbers. The new department was charged with being an advocate for consumer rights and enforcing enrollees' access to care; its charter was written with help from the California Nurses Association, a powerful lobby that is one of Kaiser's toughest critics. Its power would be drawn from a 1975 law called the Knox-Keene Act, which lays out the rules by which a California HMO must abide if it wants to keep its license. Gallegos says California already has tougher patients' rights laws than any other state. (In fact, the best thing many health-care advocates can say about the four patients' rights bills that were floated in Congress last year is that they would almost bring the rest of the country up to California standards.) Now the state's pace-setting legislation would finally have enforcement muscle.

Zingale was an obvious choice to head the new department: part politico, part activist, part Friend of Davis. A Sacramento native who got his BA in political science from UC Berkeley and a master's in public administration at Harvard, Zingale had started his career by serving as Davis' chief of staff during his days as state controller. He moved on to the American Psychological Association, where he worked on developing models for HMO coverage of mental health care; he later became the public policy director of the Human Rights Campaign; and then spent three years as the executive director of lobbying group AIDS Action.

In January 2000, Davis appointed Zingale to head the new department, which wouldn't officially open for business until July. It was during this limbo period that the state levied its $1 million fine against Kaiser. Although Zingale's name appears nowhere on the paperwork, he was involved in the state's decision to take on the high-stakes legal case, and he was aware that the task of enforcing it would rest squarely upon his shoulders. It was a ready-made challenge for the untested agency and its director, who was already receiving mixed marks from health-care stakeholders -- that he was too much the activist to be a good regulator, or too much the regulator to be a good activist. One thing was for sure, Zingale didn't expect to be threatened with jail for doing his job. "Daniel is beginning to strongly assert his authority," Gallegos said. "And I think the health plans right now are seeing that and are beginning to want to test the regulator."

Now that they're squaring off in court, Zingale and Kaiser have both proclaimed how much they respect one another. Zingale notes that his agency has filed enforcement actions against most of the state's other major HMOs, and that Kaiser does not stand out as being a particular problem. Kaiser has tried to take the edge off its contempt charge against Zingale, calling it an "unfortunate side effect" of the company's desire for legal clarity. "Our intent is to get a legal determination and not to see Mr. Zingale in jail," Kaiser spokesman Tom Debby said. Both sides say that what they want most of all is to resolve the jurisdictional issues so that they can get on with the business of delivering health care to Californians.

But inside the courtroom, things are much more complicated. First of all, the state's version of events has not gone undisputed. Kaiser has long insisted that Utterback was given appropriate medical care. In court, they insist that Utterback was given two options that would have gotten her to a doctor sooner. First, they say, anyone calling the Hayward phone answering system would have heard a pre-recorded message advising them to go to the emergency room if they had certain symptoms, such as severe bleeding or chest pains, or if they believed they were in a life-threatening situation. Kaiser also claims that Utterback was offered an appointment with a different physician but insisted on seeing Perry.

"The Utterback case, at bottom, is a case in which a 74-year-old woman believed she had eaten some bad seafood and ... wanted to see her physician and no other physician," Kaiser attorney Steven Madison declared in his opening argument last December. "She didn't want to go to the emergency room. She didn't want to see any other physicians."

Utterback's family responds that since their mother's symptoms did not match those on the pre-recorded message, she wouldn't have understood that she should have gone to the ER. They also don't believe she refused an appointment with another doctor, although the state, feeling it could not strongly argue on this point, eventually withdrew this clause from its accusation. For its part, Kaiser has yet to produce any records showing which medical assistant allegedly made the offer of an alternate doctor, or at what time, and no tapes or transcripts were made of the calls. "The record's a little conflicted," Debby admits.

The record is equally conflicted on other points. While Kaiser says Perry's office called Utterback at home to tell her she had an appointment, the family says they never got a call. While the state originally claimed that Utterback sat in Perry's waiting room for nearly two hours, Kaiser says Utterback did not check in until 3:32 and was seen within fifteen minutes of her scheduled appointment. According to a letter sent to Utterback's family in October, 1996, Kaiser asserts that during that examination, "although she looked uncomfortable, there were no signs of acute distress," and that during the ambulance ride her condition was stable.

But although the state and the HMO disagree on many of the facts involved in the Utterback case, their central conflict is over regulatory turf. Unlike other insurance plans, the not-for-profit Kaiser Foundation Health Plan is one-third of a three-headed organization generically referred to as "Kaiser." The other two parts are the doctors, known as the Permanente Medical Group, and the Kaiser Foundation hospital chain. Kaiser says the three are separate entities, although they share mutually exclusive contractual relationships. Specifically, the insurance side of the business isn't supposed to tell the doctors what to do. This independent physician decision-making power has long been a source of pride for Kaiser. "We've been very diligent to make sure that there is no interference in the physician and patient relationship," Kaiser spokesman Terry Lightfoot said. "We are concerned that if regulators fine health plans for the actions that occur in medical groups and hospitals, it will force health plans to become even further intrusive into the relationship between physicians and patients, and we don't think that's what consumers want, or what doctors want."

Kaiser's most compelling argument before the appellate court will hinge on this point -- that as a health-plan regulator, the Department of Managed Health Care can only police the doings of Kaiser's insurance arm, and not those of its medical group, which is already subject to review by the California Medical Board. "We think the people who have worked on this case don't understand the difference with Kaiser is that it is a health plan as one entity and a medical group as another," Kaiser's Debby said. "The issues in the Utterback matter are issues that are related to actions taken within the medical group, and the Department of Managed Health Care is inappropriately going beyond its jurisdiction to regulate activities of the medical group."

The department isn't buying Kaiser's challenge. "They're insisting that the responsibility for what happened lies solely with the doctors and not with the HMO," Zingale said. "Our perspective is that when it's a system failure like this one, that the HMO must be held accountable. It's not just a simple matter of malpractice by a doctor."

Zingale's department is arguing that Kaiser's three branches aren't so separate after all, and that Utterback's death was caused not by the individual behavior of Kaiser's doctors and nurses but by long-term decisions that put institutional barriers between patients and emergency care. "There's nothing unique about Margaret Utterback and what she went through," said department attorney Curtis Leavitt. "Anyone with an abdominal aortic aneurysm who called the clinic would have gone through the exact same series of barriers, because that's what Kaiser's guidelines say are to be done."

To bolster its argument that Utterback's death was part of a larger pattern, last February the department attached two more aneurysm deaths to the Utterback case and boosted the total fine to $1.1 million, although it omitted much of the detail that was part of the original accusation. In the case of Los Angeles resident Wolfgang Spunbarg, the department says he was denied access to care because he was kept waiting in an overcrowded and understaffed ER, where he eventually collapsed. In the case of Walnut Creek resident James West, the department alleges that Kaiser failed to communicate vital information about his health, including the fact that he had recently been hospitalized, to some of the physicians involved in his treatment.

Depending on who is asked, these examples either strengthen the state's argument or muddy the waters. Kaiser's lawyers say that the department can't really connect the dots between the three cases. "Kaiser has 25 million patient visits a year to their medical groups, and over five years they have taken three discrete medical episodes -- three out of 125 million patient visits," said Kaiser attorney Steven Madison. "Kaiser Permanente's medical professionals exceeded the standards in the treatment of these individuals, and sadly, because they did have a condition that is almost always fatal, these three did not survive. But stacked against the balance of those 125 million patient visits, there is no evidence that the health plan has failed to comply with the Knox-Keene Act." Madison argues that if Kaiser truly had system-wide problems that result in the death of aneurysm patients, the state would be able to cite hundreds of cases, not just three.

Utterback's daughter Preston disagrees. She said she has been contacted personally by the families of several other aneurysm patients dissatisfied with the way Kaiser treated their relatives. "The majority of people will not file a formal complaint with the state, and those who sue Kaiser have their settlements and cases sealed from public knowledge," she said. "But we all know they're there."

Inclusion of the Spunbarg case certainly gave Kaiser more fuel for its argument that Zingale's department overstepped its authority. Unlike the other two patients, Spunbarg was also a Medicare enrolee. In August 2001, the California Association of Health Plans went to court on Kaiser's behalf and argued that since Medicare is federally administered, the federal government and not the state should regulate it. Shortly thereafter, the federal judge agreed. Ultimately, so did Zingale. In doing so, he acknowledged that his department can do little to regulate benefits for seniors covered by Medicare. "I respect the judge's order, and I understand that federal law preempts state law," Zingale said. "But I think it's unfortunate that in California, when you receive your Medicare card, you lose some of your state rights."

But Zingale's department didn't back off entirely. Department attorney Leavitt maintains that the state does have the right to ensure that HMOs serving Medicare enrollees make emergency services available around the clock. The department also insists that it is legal to include Spunbarg's case solely as another example of Kaiser's systemic problems. "Kaiser doesn't have two emergency response systems, one for Medicare patients and one for others," Zingale said. "There aren't two entrances at the ER."

Kaiser viewed the inclusion of the Spunbarg case as a flouting of the judge's order. So in November, just days before the appellate hearing began in Oakland, Kaiser's lawyers asked the court to make Zingale explain how he could include Spunbarg's name in the accusation without violating the judge's earlier order. The potential penalty is contempt of court, which department lawyers say could mean jail time for Zingale. But Kaiser's lawyers say the specter of Zingale doing time behind bars has been overblown in the press. "Jail is not a remedy in a case of civil contempt, where you're seeking to have compliance with the court's orders," Kaiser's Madison said.

Leavitt counters that if Kaiser simply wanted legal clarification, it could have asked the judge for that. "You don't need to threaten to put someone in jail if you're trying to define a legal technicality," he said. For his part, the department's attorney saw the contempt charge as little more than a method of stalling. "Their entire intent was ... to delay the beginning of the Utterback case, to get it off track, to push it back another six months or a year, hope witnesses disappear or die," he said. "It's a straight-up intimidation tactic."

Zingale won't be going to jail for the time being. After only a five-minute hearing, the judge agreed in December that the Department of Managed Health Care hadn't violated the federal ruling, and allowed the case to go forward as planned. However, he did give Kaiser the option of returning to court after the hearing is over if Zingale steps out of line. Is Kaiser planning to continue pursuing a contempt charge? "It's a completely open question," Madison said.

Kaiser's foremost complaint still stands. Is Zingale's department allowed to regulate actions taken by Kaiser's medical group, rather than its health plan? Kaiser has already undergone review by the California Medical Board, which did not find any evidence of medical malpractice. "If the folks that oversee the actions of doctors don't make a finding that something was done inappropriately, then we question the attempt to then hold health plans accountable for the actions of the physicians," said Kaiser's Lightfoot. Kaiser did concede that it improved its communications and personnel training following a separate, internal review.

But while the California Medical Board did not find reason to discipline Dr. Perry, it clearly stated in a November 1997 letter to Utterback's daughter Preston that its investigation turned up problems beyond its purview. "We also recognize that your mother attempted in every way possible to follow the protocol in seeking medical care for her condition," the letter stated. "Unfortunately, the delay in scheduling an appointment for her to be seen cannot be considered to be physician negligence. This is an issue which could be considered to be a system problem and therefore cannot be addressed by the Medical Board. You should continue to pursue this with the Department of Corporations, who has jurisdiction over health-care service plans."

The way Kaiser sees it, that would constitute double jeopardy. Its lawyers argue that Zingale's department threatens the very feature that makes Kaiser appealing to enrollees -- the independent decision-making power of its doctors. In Kaiser's opening argument, Madison painted a dire picture. "The department would have some sort of guy in a suit standing in the clinical setting or standing in the operating room or standing in the emergency room saying, 'No, no, no, guys. I'm an insurance administrator and you guys need to do this, this and this.'"

Zingale finds this notion absurd. "I understand that if it's a medical malpractice case it goes to the state medical board," he said. "This was an HMO failing to provide a system the patients could rely on when they have an emergency. The HMOs are responsible for the system."

How sacrosanct is that division between Kaiser's branches? "These are separate entities which contract with one another to provide services," Madison said. "The medical group provides treatment and the health plan administers the health plan, which is precisely how it should be." But critics such as Jamie Court, director of the Foundation for Taxpayer and Consumer Rights, which filed a false advertising claim against Kaiser in 1999, point out that Kaiser's marketing is at odds with its claim to being three distinct entities. "I've seen materials where Kaiser is intentionally trying to show the public that there's no difference between the hospitals, their doctors, and their health plan," he said. "They're doing that to say that they're a different type of HMO, the doctors are in charge and it's an integrated entity. Yet in court they claim the entities have nothing to do with one another."

The state says that if it doesn't penalize Kaiser for the systemic problems at work in Utterback's death, no one will. In fact, it contends that if the judge strips the Department of Managed Health Care of its enforcement powers, Californians will be no better protected than they were under the Department of Corporations. "Kaiser is saying that the DMHC is just like the Department of Insurance -- we just get to make sure that when the patient needs care and there are costs for delivering that care, the HMO is around to pay for it, that we really just regulate the business of health insurance," said Leavitt. "Our position is 'No, no, no! We also regulate the delivery of that care with regard to access and continuity.'"

Utterback's daughter believes the company is simply hiding behind its medical group. "They try to draw a line between the health plan and anything else, but there is no line, because the health plan provides all the money for all the services and therefore directs what those services do and what kinds of services they have," said Preston, for whom the last six years have been an emotionally exhausting odyssey. "You can't separate them. In the waiting room where my mother sat for two hours, it was grossly understaffed that day. There was one nurse when there should have been four or five. That's a staffing problem due to cost cutbacks. That's not the doctors' fault. That's not the nurses' fault. That's the CEO's fault. It's part of their strategy."

This momentous legal face-off is expected to reach its final stage when the Oakland hearing concludes January 23, after which the judge will have thirty days to rule. Still, both sides are likely to appeal if they lose, leading to yet another lengthy round of court battles. In the meantime, some health-care advocates are becoming frustrated with the time and effort already invested in the dispute. "I see resources and time being spent on these kinds of saber-rattling gestures, the health plans drawing their lines in the sand," Gallegos said. "I can't help but think that they'd be better spent improving the quality of health care, rather than playing these legal games which really amount to nothing more than seeing which side is going to blink first."



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