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May 19, 2004 - 11:40 AM

Will HMO Be Able To Pay-For-Rubberstamp On Major Acquisition?

by Jamie Court
Arnold Watch has noted the unequal access of average people with real problems to this Governor. Now Schwarzenegger's Department of Managed Health Care is breaking with a tradition that goes back to the Wilson Administration of holding public hearings for every major HMO merger and acquisition.

The deal at issue is Anthem's $15 billion acquisition of Wellpoint Health Networks, parent company of Blue Cross of California, which serves 7 million Californians. Blue Cross and its executives have given the Governor's various committees $92,400. The execs that control those PAC contributions stand to make hundreds of millions of dollars if the acquisition is approved without wrinkles. Wellpoint CEO Leonard Schaeffer will make up to $335 million in cash and stock options. Wellpoint is also a corporate client of the investment firm Dimensional Fund Advisors, which the Gov reports owning at least a $1 million share of on his economic interest statement .

The sunshine governor should keep with the tradition of HMO regulators over the last decade and give patients, doctors, nurses, businesses and pharmacists the opportunity to comment at public hearings on the potential problems of Indiana-based Anthem, which is being sued by Connecticut doctors for outrageous billing abuses, taking over care for millions of California patients. Pete Wilson's regulator even made material modifications to other HMO mergers based on public hearing comments. Our letter documenting the need for hearings can be read at: .

In particular, there are two Blue Cross patients who might like to have their say - Pat and Dave Parker. They're the 60-something couple who tracked Arnold down at his Lakers sky box fundraiser in December to deliver a letter about their problems with Blue Cross premium increases. (Read more about them at: Even though a Schwarzenegger aide promised they would be receiving a call from the Gov's office, five months later no one from the Gov's staff has bothered. Of course, the Parkers didn't pay to get in. We suspect Leonard Schaeffer gets his calls returned much faster.

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