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FOR IMMEDIATE RELEASE
Oct 04, 2002

CONTACT: Jerry Flanagan, (415) 633-1320

'HMO Light and Tight' Plan Will Restrict Access to Care


Provides Fewer Consumer Protections

Today PacifiCare announced plans to launch a new California health maintenance organization (HMO) that would severely restrict a patient's choice of doctors and hospitals. The Foundation for Taxpayer and Consumer Rights (FTCR), a non-partisan consumer advocacy organization, sharply criticized the move because such a plan will severely limit patient access to care and unfairly places the burden of rising health care costs on patients and employers.

"This is the health care equivalent of bread lines. Patients and employers will be looking to take back what they have lost at the ballot box," said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights. "'HMO Light and Tight' won't work because patients and employers have nothing left to give."

FTCR announced plans to pursue a state ballot initiative that would place more public control over health care costs. A similar program for hospitals has been in place in Maryland since 1971.

PacifiCare's plan is launched against the backdrop of double-digit annual health care premium increases. The new plan is said to be less expensive for employers. Consumer advocates argued that such a move inappropriately placed the burden of health care costs on patients and employers and does nothing to address huge cost inefficiencies and waste endemic among health insurers. The new HMO would exclude the state's most respected hospitals including Cedar-Sinai Medical Center, UCLA Medical Center and Childrens Hospital of Los Angeles.

"Less than half of Californians with health insurance are enrolled in HMOs because the quality of care has decreased dramatically. The PacifiCare plan signals the death throes of the state's HMOs because patients won't stand for further cutbacks," said Jerry Flanagan. "PacifiCare and other health insurers have used phony arguments that equate premium increases to medical cost increases. Real reform must require HMOs to put more of the premium dollar they collect into hands-on patient care not into advertising, administration and executive salaries."