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Mentions how Anthem and WellPoint Health Networks won approval from California's insurance commissioner for their $16.4 billion merger in order to create the nation's largest insurer. Pledge of both companies to spend $265 million to help improve health services in the state; How the companies together will cover 28 million people in 10 states and Puerto Rico; Consideration of how the California commissioner John Garamendi blocked the deal at first on claims that it represented a payoff to company executives; Claims from the companies that they would not increase the premiums that members will pay.

Reports that Bruce G. Bodaken, chief executive of Blue Shield of California, is proposing a legislation that would provide public or private health coverage for every resident of California as of December 3, 2002.

Reports that Blue Shield of California, one of the largest nonprofit health plans in the U.S., will announce an incentive program for hospitals that meet accepted standards for high-quality care. How it is introducing the program after criticism by some of the state's hospitals; Focus on evaluating hospitals in terms of quality and cost-effectiveness; Details of the plan.

Reports on a ruling issued by the California Supreme Court in May 2001, which makes it easier for Medicare patients to sue their health maintenance organizations.

Reports that the California Medical Association filed a civil lawsuit under the Racketeer Influenced and Corrupt Organizations Act, or RICO, against three insurance companies in the United States. Details of the case against WellPoint Health Networks, Foundation Health Systems, and PacifiCare Health Systems; Allegations of coercing doctors and interfering with physician-patient relationships for financial reasons. INSET: Applying RICO To Civil Cases.

Reports the statement of Phil Angelides, a California state treasurer, that he would press the state's two big public employee pension funds to sell off their large holdings of tobacco company stocks. Action taken by Philip Morris Cos. in response to Angelides statement; Shares of Philip Morris projected in the New York Stock Exchange; List of some universities that sold tobacco stocks.

Reports that a consumer advocacy group has asked a California court to halt advertising by Kaiser Permanente, a health maintenance organization. Contention of the advocacy group; Comments from Francis J. Crosson, executive director of the Permanente Federation of Kaiser physician groups; Information on another case involving Aetna Inc.

Features Walter A. Zelman, president and chief executive officer of the California Association of Health Plans. Career and family background of Zelman; Insights from Zelman; Criticisms from industry critics.

Reports that on November 8, 1996 the California Attorney General accused the directors of Sharp Healthcare of undervaluing their business by $100 million to $200 million in a joint venture with Columbia-HCA Healthcare Corporation. Threats sent by the Attorney General to the directors in a letter; Background on the Columbia and Sharp deal.

Discusses the impact that California's decision to review its managed care health system is having on the debate over managed care across the country. Proposals for tighter regulation of managed care; The appointment of a joint commission to recommend improvements; Growing skepticism toward managed care; The story of Joyce Ramey, and its impact on managed care in California; What defenders of managed care say about changes; The response of consumer groups and doctors.

Relates that a feud between Leonard D. Schaeffer and Dr. Malik M. Hasan threatens a proposed merger between their California managed-health-care companies. Claim by Hasan, head of Health Systems International, that Schaeffer reneged on an agreement to let Hasan control the making of certain deals in the merged company; Schaeffer's company, Wellpoint Health Systems.