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Read Making a Killing

home / healthcare / in the media

Modern Healthcare
Feb 03, 2003

by Laura B. Benko

Leaving the line of fire; Ex-consumer activist Zelman exits as CAHP chief

Walter Zelman, a consumer activist who was hired to polish the image of the managed-care industry, has quietly stepped down from his post as president and chief executive officer of the California Association of Health Plans.

While heading the state's HMO lobby for more than four years, Zelman drew personal criticism from some fellow consumer activists and from physicians for his role in promoting an industry that was viewed as putting profits before patients. Last week, he told Modern Healthcare that it was time for a break.

''It was a difficult job, and managed care is in the hot seat,'' said Zelman, 59, who stepped down last month. ''I still think the industry is terribly misunderstood ... but I decided it would be good to get out of the line of fire for a while.'' Zelman said his crusade for healthcare-cost containment became more frustrating as consumers, legislators and providers pushed for expanded benefits and limits on insurers' ability to manage care.

No replacement has been named. The Sacramento-based association has hired executive search firm Berkhemer Clayton, and the search process is expected to take two months, said Bill Wehrle, the association's vice president of legislative affairs who is jointly overseeing the organization with other staffers.

As the executive director of California Common Cause in the 1980s, Zelman fiercely criticized the political influence of special-interest groups. In the early 1990s, he helped craft President Clinton's ill-fated universal healthcare plan. It was during this time, Zelman said, that he came to believe that managed care could improve quality and generate savings that could be used to expand coverage to the uninsured.

The self-avowed liberal was hired to lead the state's health-insurance lobby in September 1998, as HMOs were increasingly vilified. ''Over the past two decades, Walter has demonstrated an uncommon sensitivity to patient concerns and views of consumers,'' former association Chairman Bruce Bodaken said in a statement at the time.

Some consumer activists still simmer over Zelman's move to ''the dark side.'' Harvey Rosenfield, founder and president of the Foundation for Taxpayer and Consumer Rights, Santa Monica, Calif.-which names Zelman on its ''Goon Squad'' list of industry hired guns-said the former political watchdog failed to put a friendly face on a profit-driven industry. The CAHP ''tried to hire a reformer and consumer advocate to give them credibility. But Wally didn't have enough stature to give credibility to a group that abuses so many patients,'' Rosenfield said. ''I don't think anyone has that much stature.''

Tensions continue to run high between the health plan lobby and provider groups, which have clashed publicly over such issues as capitation rates, collective bargaining and prompt-payment laws.

In October, the California Medical Association sent a scathing letter to Zelman-copied to the CEOs of each CAHP member plan-criticizing him for using selective data to support ''what appears to be pure propaganda.'' The letter refuted assertions by Zelman that the CMA had overstated California's medical crisis and that physician compensation actually was rising. The letter was written in response to statements made by Zelman to various news organizations regarding California Gov. Gray Davis' signing of a ''physicians' bill of rights.''

''You either don't care about physician relations or you are woefully out of touch with the environment,'' the letter stated. ''In either case, your statements give physicians justification for redoubling their legal and legislative advocacy against health plans-instead of beginning to work together.''

Yet CMA Executive Vice President Jack Lewin commended Zelman for being a formidable adversary. ''Walter did exacerbate things (between the two groups) sometimes,'' Lewin said, ''but that was his job and he did it well.''

Despite criticism from consumer-rights allies, Zelman led the association in its fight against HMO reform legislation. In 2002, it won passage of a law that will require a cost-benefit analysis on all proposed legislation that would place coverage mandates on health plans.

Some CAHP members offered their praise. Chairwoman Kathlyn Mead, president and CEO of Sharp Health Plan, San Diego, called Zelman a ''wonderful asset.''

''He's a skilled communicator with a great deal of health policy experience and an excellent rapport with elected officials,'' she said.

CAHP board member Milt Camhi, CEO of Contra Costa Health Plan, Martinez, Calif., said Zelman skillfully balanced the agendas of members, which include for-profits, not-for-profits, Medicaid HMOs, and both regional and statewide plans. ''One of the biggest challenges of heading up an organization like this is trying to synthesize all your members' interests, especially when there has been very little stability at the board level,'' Camhi said.

A former professor of health policy and management at Harvard University, Zelman said he plans to explore other opportunities, including consulting for the Center for Governmental Studies, a Los Angeles-based think tank that specializes in financial ethics and campaign reform.


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