United He Stands

In the past seven years the Minnesota attorney general's office has earned a rep as one of the country's toughest HMO watchdogs. So does it matter that Matt Entenza, the DFL's heir apparent to the job, is married to one of the most powerful executives in

When Matt Entenza stood outside his St. Paul home on the morning of October 26 and declared that he meant to be the next attorney general of Minnesota, no one should have been surprised. As far back as 2001, Entenza, the current minority leader in the Minnesota House of Representatives, had formed his own campaign committee as a means of stamping himself as the DFL's heir apparent to Attorney General Mike Hatch, should Hatch have opted to run for governor in 2002. That fledgling committee was disbanded shortly after Hatch chose to stay put and run for a second term as AG, but four years later—and just two days after Hatch had announced that he would challenge Gov. Tim Pawlenty in 2006—Entenza strode to the microphones as his party's presumptive nominee to succeed Hatch.

The announcement Entenza had waited years to make was, predictably, a smorgasbord of autobiography, career highlights, and political positioning. He introduced the people around him, including his wife, his three sons, his in-laws, and one of his former teachers. He said he'd be a consumer watchdog, citing "big oil companies" as a particular object of scrutiny. He noted that he'd shut down nefarious telemarketers as an assistant attorney general under Skip Humphrey, put white-collar criminals in jail as a Hennepin County prosecutor (thereby warning "the Enrons of the world" to watch out, he boasted), and was the chief author of the Legislature's "do not call" bill limiting the reach of telemarketers in the state. He cited crystal meth and sexual predators as two of the criminal problems statewide that would receive special attention under Attorney General Entenza.

But what he chose to downplay in his campaign kickoff announcement may have been as revealing as what he emphasized. Specifically, Entenza's five-minute statement refrained from mentioning the matter of health care until the next-to-last sentence, and then only in a laundry list of hot-button issues he'd watch closely as AG. This was striking for a couple of reasons: first, because it virtually ignored the keynote issue of his predecessor's two terms in office, a period that earned Minnesota a reputation as one of the most aggressive states in the country in its oversight of HMO medicine; and 
second, because the wife of 22 years who stood at Entenza's side that day, Lois Quam, also happens to be one of the more 
powerful health care business executives in the country.

Election Day 1998 in Minnesota will forever be known as the time when Jesse Ventura "shocked the world." But it was Hatch, the other insurgent winner from that night, who made a more lasting impact on the balance of political power in the state. And he did it by making good on his campaign pledge to take on the health care bureaucracy, at a time when HMO enrollment made up a whopping 98 percent of the state's health insurance market.

Minnesota, along with California, stood on the cutting edge of the "managed health care" revolution that sprung up during the 1970s and '80s with the formation of health maintenance organizations, or HMOs, to compete with traditional fee-for-service health insurers. But as the HMO model pioneered here has become increasingly pervasive across the U.S., Minnesota has remained a unique legal environment for health care, owing largely to its status as the only state that requires HMOs to operate as nonprofits. That law, coupled with the attorney general's legal authority over charitable trusts and consumer protection issues, has enabled Mike Hatch to wield tremendous influence over the practice of health care in Minnesota during the past eight years.

"Let me be blunt," says Kip Sullivan, a steering committee member of Minnesota Universal Health Care Coalition. "Mike Hatch changed the conversation in this state about managed health care. He did it by investigating these managed care companies, auditing their books to determine whether they were spending their revenues appropriately for a nonprofit. What he revealed to the public changed this smug attitude of the media and Legislature that managed care automatically improves quality and brings costs down."

Hatch, who previously worked in Rudy Perpich's administration as a commerce commissioner from 1983-1989, had spent much of the '90s in private practice, frequently representing clients whose lives were jeopardized, and sometimes lost, because their health insurers balked at providing full coverage or ruled they were ineligible for recommended procedures. The experience radicalized Hatch in some ways, and he came to the attorney general's office seething over the various ways these companies minimized their costs by cherry-picking whom they would agree to cover, stonewalling sick people, and denying access to potentially life-saving treatments ("See You in Court," CP, 3/3/99).

Three cases from Hatch's tenure stand out above the rest. In October 2000, he filed suit against Blue Cross and Blue Shield of Minnesota, accusing the company of denying its subscribers medically necessary, physician-recommended treatment for mental health, eating disorders, and chemical dependency. At first, BCBS vigorously denied the charges. But 10 months later, in a press conference announcing a settlement of the lawsuit, a Blue Cross executive acknowledged that the firm "failed these families in some important ways." Under the terms of the settlement, BCBS agreed to speed up its claim reviews, broaden its coverage, submit denied claims to a three-member review committee appointed in part by Hatch and a Hennepin County judge, and reimburse the state more than $8 million for taxpayer-paid health coverage the company should have borne. The state's other two major HMOs also subsequently agreed to submit their denied claims to the three-member panel.

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