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Clinton realized in the wake of Perot's surge that he couldn't stick with an expensive, government-run system such as "pay or play." This also meant that the great liberal hope, a single-payer system in which the government would become everyone's insurer, was a nonstarter. Clinton needed a new approach. In August his health advisers began moving toward the notion of providing universal coverage but relying on market forces to hold down costs. Known as "managed competition," the system would create regional alliances that would buy coverage in large, economical packages from rival groups of doctors, hospitals and other health-care providers.
On the morning of Sept. 22, Clinton was hurriedly briefed on the plan in a crowded Holiday Inn suite in East Lansing, Michigan. Ronald Pollack, the executive director of Families U.S.A., a foundation that develops programs for the elderly, told Clinton that managed care was a secret weapon he could spring on Bush. Clinton could strike a populist chord by helping business lower costs, by providing Americans with cradle-to-grave coverage and by standing up to such special interests as doctors, drug companies and insurance firms. Best of all, the plan required no new taxes. Clinton loved it. As he heard the details, he punched the air with his fist time and again.
< Clinton was so excited that he asked if he could release cost estimates based on the managed-care idea to the public. Magaziner was all for it. Others opposed the move, however, saying the numbers would stir debate, even if the new approach was sound. Pollack told Clinton that his group would soon release a "bipartisan" report detailing managed competition's effect on the budget. Why not, Pollack said, let his group put numbers out? Clinton agreed. That way the numbers would be available but could not be directly linked to Clinton's plan. Two days later, after a 48-hour marathon of speech writing, Clinton spelled out his new, improved plan to an audience at the Merck pharmaceutical company in New Jersey. Clinton's blueprint for reform was now in place.
A FOUR-ALARM FIRE
One week after Clinton took the oath of office, Magaziner circulated a secret 26-page memo to the First Lady, Cabinet officers and a few close political advisers of the President. Drawing on the Merck speech, Magaziner asserted flatly that managed competition -- with caps on payments -- was the model for Clinton's reform. Ruling out more radical approaches, Magaziner's memo said further that the chief goal of the coming months was to work out the most controversial aspect of the plan: how to finance the new system.
Magaziner and the Clintons cooked up the task force during the transition as a way to buy time to work out the details, build consensus among the experts and lobbyists, keep skeptics at bay, generate more ideas, and test the financial assumptions on the government's supercomputers. But most of all, Magaziner needed to conduct what one task-force member called "Ira's own heuristic process. This is the way Ira decides things," the official said. "He gets as many people in a room and talks for as long as everyone can stand." Of course, to a lesser extreme, it was also the way Clinton decided things. "Managed competition was a thesis that needed to be proven," admits Mark Gearan, White House communications director. "That's what the task force set out to do."