Insurance Commissioner's First 100 Days:Raids, State Fund Mess

Poizner has took part in insurance fraud raids around the state, directed aid to farmers hit by this winter's crop freeze and overseen investigation of the state's largest workers' compensation insurer, the State Com-pensation Insurance Fund, where leaders recently left amid charges of mismanagement and conflicts of interest.

I thought I'd spend a big chunk of time putting together my executive team and just meeting all the people. The department has more than 1,300 employees. We've done that but also had to put out a few fires in between. My second full day on the job I was participating in one of the largest insurance fraud busts in the history of the state, arresting people who were staging auto accidents and over-billing insurance companies to the tune of millions of dollars.

We've had to deal with a real meltdown there. The president was fired a few weeks ago and two board members resigned over conflicts of interest. I've sent in a team of auditors and fraud investigators, and we're going over the place from top to bottom. I've run a number of companies, been involved with a lot of business organizations, but I've never seen anything like it. This was a state agency that was run like a fiefdom. They didn't have a chief financial officer or a board audit committee. They have a $20 billion investment portfolio, but no chief investment officer.

Transparency has long been a problem with the State Fund. Until last year, when the Legislature made clear that the insurance commissioner had full oversight, regulation really fell through the cracks. When they didn't like what an auditor said, they'd throw them out.

I'll resist with all of my might any attempt to roll back the reforms. The reforms have worked to bring premium rates down from $32 billion in 2003 to $22 billion now. There's a long ways to go to get rates down to the national average. But the reforms do need some tweaking. Some insurance companies, for example, have gone overboard in putting too many utilization reviews into the process so that it is taking too long for some workers to get medical treatment.

I regulate around $120 billion in premiums each year, about 15% of the state's economy. We're the fourth largest insurance market in the world. I don't believe that running a state agency is just like running a business. But business techniques can be used. My job is not to be the friend of the insurance industry. But it's not to drive the insurance industry out of state either. My goal is to make the department the best consumer protection agency in the country.

We want to increase affordable options for insurance consumers. Ensure consumers are well informed about options and responsibilities. We're working on programs, especially updating our Web site, to enable that. It's also important to protect insurance consumers from bad actors and unfair practices. I am the chief insurance cop in California, and we've been doing that, in cooperation with district attorneys around the state.

One thing that is frustrating for me is that the regulation of health insurance in California is so fragmented. In 49 states, you have one regulator over the entire industry. In California, HMOs are managed by the Department of Managed Care. The Depart-ment of Insurance regulates the rest. That's only 30% of the market. I don't want to get involved in things where I have limited potential for impact. That's why I have decided to focus my attention on cost containment initiatives.

Electronic medical records is going to be a big focus of mine because it can really increase efficiency, improve care and reduce costs. This patient recordkeeping on a clipboard has got to end. Health insurance companies can be encouraged to make some strategic investments, but they are unlikely to do it on their own. As insurance commissioner, I can pull the entire industry into a room to discuss this without having antitrust issues come up.