COLUMN LEFT / ALEXANDER COCKBURN : Put ‘Managed Competition’ in the Garbage : Perhaps candidate Clinton had to curry business favor, but now let’s hear a real health-care plan.

Popular expectation is high, and if you combine the Clinton and Perot vote, the yearning for change is overwhelming. How can Bill Clinton satisfy such expectations?

Already his people are sending up cautionary smoke signals: Expect nothing dramatic in the way of first-100-day assaults on the economy. Clinton aides leak probable Cabinet appointees of impeccable economic orthodoxy, soothing Wall Street and the international speculators.

But Clinton is the very last man who has to persuade the world that he is not a woolly populist tilting at the ramparts of corporate decorum. He spent his whole campaign doing that. Now he has to demonstrate to the millions who voted for him and his party that he can materially improve the circumstances of their lives.

He can do some things at the stroke of a pen. A hundred federal judgeships await nomination. The new government will surely put up judges more diverse and sensitive to human beings than the Reagan-Bush appointees who now fill 80% of the federal judiciary.

Clinton can start to dismantle secret, unaccountable corporate government, as represented by Dan Quayle’s Council on Competitiveness, and place strict and enforceable controls on the Office of Management and Budget. OMB in the Reagan-Bush years sabotaged enforcement of hundreds of environmental regulations, invoking narrow cost/benefit criteria. Similarly, Clinton can appoint people to federal agencies and regulatory bodies committed to enforcement of the law, even if it means stamping on corporate toes.

If there’s one area where he could answer popular expectation, it is surely health care. Everyone knows the health care system is a shambles. Everyone wants it fixed. Health costs eat up 14% of gross domestic product. For many businesses, it’s a huge and growing chunk of the costs of production. Millions are uninsured.

In the campaign, Clinton’s response to the overall crisis in health care was a variant of former McNamara whiz-kid Alain Enthoven’s “managed competition” plan. The intent of this appalling scheme is to remove all choice and independence from the majority of health care seekers and health providers. The insurance industry would gain absolute power in operating a vertically integrated system.

To make “managed competition” work, employees would be coerced into cut-rate health maintenance organizations, where providers--hospitals, doctors and other health care workers--would also be under the direct control of the insurance companies. Tax penalties would inhibit those seeking care outside the allocated health-maintenance organization. The theory is that buying agents would bargain on behalf of those seeking coverage for contracts between competing HMOs, thus driving overall costs down.

The reality would be a multi-tier, class-based system, with poor people in cut-rate HMOs at the bottom and the rich opting out for top-class health care. The HMOs would have every incentive to reduce their costs by stinting on service to the truly sick.

Clinton has claimed that he would impose cost controls by setting a state-by-state cap on total spending on health care. But at this point there are no reliable data on what health spending is in each state and no reliable system to collect such information. At least two and probably three years would elapse before the word “cap” in this scheme would have any meaning.

As Enthoven himself admits, his system is more complex than the present ramshackle structure, and would cost more to administer. As much as half of all Americans live in population areas unable to sustain more than one large managed care organization, which kills the idea of competitive bidding. Competing insurers would go to great lengths to lower their costs by driving away the risky or chronically ill.

The appeal of this plan to candidate Clinton was clearly that it would leave the insurance industry intact. The price for President Clinton is that after a couple of years of providing lousy health care for patients and lousy conditions for providers, the plan would fail, sending costs up and promises of comprehensive coverage for all Americans out the window.

There is, of course, an obvious alternative: single-payer comprehensive health coverage along Canadian lines. The downside for Clinton is that he would have to take on the insurance companies and the corporate lobby mustered behind “managed competition.” The upside would be that he would satisfy popular expectation and probably ensure his reelection.