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.

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