"The purpose of requiring HMOs to be nonprofit is so they will focus on the quality of health care delivery and not on a return to their shareholders," Baumgarten says. "Theoretically, nonprofits won't compromise care to maximize profits. But the reality is that people do business in a variety of ways, mostly to respond to what their customers are asking for. And customers are coming to Medica and Health Partners and saying they want to design their plans in a different way, which is why you are seeing so much business outside the HMO."
What this means, for practical purposes, is that although the for-profit UHG is technically not part of the Minnesota HMO establishment, it is still a major player in the state—not only for its arguable control of Medica, but also owing to the increasing number of ancillary products it sells here. For example, Medica clients who move outside the state can transfer their coverage to a UHG policy through United's "Passport" program. Those Minnesotans who would rather insure themselves through a health savings account will soon be able to take advantage of UHG's newly acquired Definity division. To aggregate health care data as a means of cutting costs or identifying "best practices," UHG offers their Ingenix program on a business-to-business basis. And this month, United began selling Medicare Plan D drug coverage through Quam's company, Ovations.
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On that last count, David Schultz wonders aloud about the possibility that Attorney General Entenza might one day be called upon to bring a class action suit against his wife's company. "Lois Quam is a major United Health Care executive who is probably going to be selling a product that is very popular," he notes. "But Medicare Plan D is also probably going to be a hotbed for all kinds of litigation, because it is a new law, it is very complicated, and it is unclear what your obligations are [and] what is paid for under Plan D. You are going to have patients suing health care companies, alleging XYZ. But if enough of those complaints are filed by consumers, this is where the attorney general comes in and says, 'We will file a class action on the part of the state.' That is one of the most important steps he can take—we expect him to be an advocate for Minnesota.
"So, yeah, I think there are all kinds of interesting conflicts for Matt to navigate."
When I mention Schultz's scenario to Entenza, he first dismisses it. "All that stuff is federally regulated," he says, referring to Medicare. "But I suppose it could be a consumer issue." He pauses, then starts again in a tight voice. "I'd have to recuse myself, the same way Jeff Johnson would have to recuse himself if anything had to do with Cargill, where he used to work, or all the business clients he's had as a corporate lawyer. Anyway, I would make the call to the professional prosecutors in my office and let them do whatever needed to be done.
"I don't have a hypothetical opponent. I have a real one," he continues, the heat rising in his voice. "I suppose you could ask him how he is going to deal with all these potential conflicts he has from the companies he represents. Again, I have a history as a watchdog. The business lobbies never supported me in my races. I'm not the candidate of the Chamber of Commerce." Calming down, he concludes, "But without question, if there was an issue with United Health Care, it would go to the professional prosecutors in my office, and I would not be involved."
But who would decide if there was "an issue" with UHG in the attorney general's office? For practical purposes, wouldn't important calls such as whether to pursue a class action as a result of multiple complaints, or to launch an audit or broad investigation, necessarily originate with the man in the big chair? "No, not at all," Entenza replies. "I used to be there, and I know that the office gets hundreds of complaints every year. Some go up to the attorney general and some don't. But if there are any complaints or issues of any sort that arise, the professional prosecutors would have full rein to do whatever they need to do."
But it stands to reason that the tone of the office is set at the top. "Some of the state law is vague as to what constitutes appropriate use of monies by a nonprofit, what constitutes an HMO, what constitutes fraud," says Kip Sullivan of the Minnesota Universal Health Care Coalition. "There is a lot of room for creative use of those laws by an attorney general that knows HMOs can constitute bad policy, and that company officials can engage in bad practices. But if you assume as an AG that managed care is wonderful, then you are going to take an entirely different attitude toward using the scarce resources of the attorney general's office."
