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State's HMO 'Report Card' Fails in Meaningful Evaluation of Health Care Quality and Ignores Affordability

SANTA MONICA, Calif., Oct. 18 /PRNewswire-USNewswire/ -- The annual HMO report card released today by the Schwarzenegger administration is so vague and incomplete that it does not allow consumers to accurately evaluate HMO quality or safety. The report omits key consumer information including costs, medical failures and illegal behavior that is rampant among the state's HMOs, according to the Foundation for Taxpayer and Consumer Rights (FTCR).

FTCR noted that today's release was timed to coincide with the governor's legislation that would require Californians to buy health insurance, even if it is unaffordable and of poor quality.

"Car buyers get more complete information about auto quality, reliability and safety from Consumer Reports; even Zagat tells us more about where to get good ravioli," said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights (FTCR). "This report, and as far as we can tell, the entire state Office of the Patient Advocate, is a waste of taxpayer money, more concerned with the political protection of HMOs than with informing patients of life-threatening problems at HMOs."

The worst behavior of California HMOs -- the illegal cancellation of coverage when patients get sick or the wholesale throwing overboard of kidney dialysis patients by Kaiser -- wasn't even mentioned in the report. It is easy to get good grades when the teachers ignore bad behavior, said FTCR. This vague and incomplete analysis gives consumers a false sense of security about the quality of HMOs.

The HMO report gives every HMO "gold stars" in broad, vague categories with no explanation of what went right or wrong at individual plans.

"Instead of receiving stars, HMOs should receive bad grades with detailed descriptions of the offense when they fail to uphold standards of patient care," said Flanagan. "By making all HMOs look safe and ethical, this report seems more concerned with furthering Gov. Schwarzenegger's deeply flawed health care plan."

In the report:

** Blue Cross was awarded two stars for "meeting national standards of care" even though regulators found in a report released in March that Blue Cross illegally canceled health policies in 90 out of 90 cases reviewed. Read more here:

** Kaiser was awarded three stars for "members rate their HMO" even though enrollees are paying for care they don't get, with the premiums going to Kaiser "reserve funds" that are 13 times more than the state requires;

** Kaiser Northern California scored highest for "clinical quality" despite the fact that the HMO's kidney transplant office yanked patients from a successful program to an unready in-house one that ultimately contributed to the death of several patients, untenable delays for many others.

** Out of the nine HMOs, 6 received three stars for "members rate their HMO," which does not describe medical quality, and 6 received two stars for "meeting national standards of care," which are not well-defined in the report.

FTCR said that a true report card would at least include the following types of information:

** information about the kind and number of patient complaints against each HMO;

** information collected about HMO quality in independent audits performed the Department of Managed Health Care, including illegal policy cancellations;

** information garnered from arbitration reports in cases of medical negligence;

** information about the real cost of plans for families and individuals with pre-existing conditions, as well as information about applicants denied policies for even minor conditions.

FTCR is California's leading public interest watchdog. For more information, visit us on the web at

SOURCE Foundation for Taxpayer and Consumer Rights
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