Health Care’s Reform’s Cook, Chief, Wife and Detail Lovers : Reform: Interviews reveal a Garamendi recipe, copied by Clinton, baked by First Lady and a cast of hundreds.

The winter sun was already setting when candidate Bill Clinton finally arrived at the Regency Club in West Los Angeles for a scheduled five-minute meeting with California Insurance Commissioner John Garamendi. One of half a dozen Democrats seeking his party’s presidential nomination, Clinton was shopping for someone to chair his California campaign.

Puffy-eyed and hoarse, the Arkansas governor was grateful for a respite from the all-out campaigning in snow-covered New Hampshire. He perked up even more upon seeing Garamendi, a like-minded reformer. “What do we do about health care?” Clinton asked his friend.

For the next 45 minutes, the two men talked revolution.

The words and concepts they tossed back and forth sounded arcane--universal coverage, global budgeting, health insurance purchasing cooperatives. But the objective was nothing short of audacious--remaking an industry that accounts for a seventh of the entire U.S. economy.

“He found Garamendi’s ideas very provocative and asked all the right questions,” recalled one of only two other people in the room.

Thus began a little-known, 18-month collaboration between Garamendi and Clinton--and their top aides--that had a dramatic impact on the national health care reform agenda the President will unveil in a nationally televised address Wednesday night.

The President’s pending reform manifesto is the product of months of exhaustive work by the 500-member White House Task Force on National Health Care Reform headed by First Lady Hillary Rodham Clinton. Yet in many important respects, it is a virtual clone of the national plan that Garamendi drew up at the President-elect’s request before he took the oath of office.

As Garamendi quipped one night last week: “I’m the one to blame.”

While Garamendi’s meeting with Clinton at the Regency Club in the winter of 1992 started the ball rolling, there were other defining moments in the making of Clinton’s health care reform initiative.

As scores of analysts thrashed out complex issues inside the ornate Indian Treaty Room in the Old Executive Office Building next to the White House, there were moments both of drama and drudgery, of elation and despair. There were marathon meetings, all-night writing binges, skipped meals, lost sleep, bungled communications and hurt feelings.

Over the past eight months, as the President and his task force set out to plot the most ambitious piece of social legislation in the nation’s history, The Times interviewed all of his senior health policy advisers, as well as top campaign and transition advisers who have returned to the private sector or academia.

The scores of interviews reveal that the process of developing a comprehensive plan to restructure America’s $900-billion health care system has been anything but smooth or straightforward. It was, in fact, a tortured process of trial and error--at once open and secret--that disrupted the lives of virtually every participant, leaving everyone exhausted, some embittered--and most exhilarated.

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As a longtime governor, Clinton felt strongly that national health care reform must provide coverage for all, rein in spiraling costs and grant states sufficient flexibility to design their own solutions. His only other preconceived notion was that America must not adopt a Canadian-style, single-payer system in which the federal government collects health care dollars and then pays all the bills.

Beyond that, Clinton was wide open--and trying to buy time.

In December of 1991, with the New Hampshire primary only weeks away, the pressure was on for Clinton to come up with something meatier than the three-page statement of principles his campaign staff had prepared. Two of his rivals, Sen. Bob Kerrey of Nebraska and former Massachusetts Sen. Paul E. Tsongas, had detailed proposals.

Working feverishly and alone out of a tiny office in Washington, Bruce Reed, Clinton’s issues director, began to flesh out a plan, calling experts all over the country.

“It was the worst two weeks of my life,” Reed, a Princeton University graduate and Rhodes scholar, recalled with a laugh. “The problem clearly was bigger than we could solve in two weeks.”

Ira Magaziner, a longtime Clinton friend and adviser, argued against providing too much detail. “You don’t gain anything by getting specific. Stay general,” he counseled.

Reed eventually came up with a draft. On a frigid Saturday evening in January, he and the Clintons hammered out a 12-page statement of principles while eating takeout Chinese food in a small Manchester, N.H., hotel room.

The document promised universal coverage without new taxes. Once it was released, the issue seemed to go away. “All the candidates were for reform, so it just wasn’t a cutting-edge issue,” Reed recalled.

As Clinton’s rivals began falling by the wayside, more and more “experts” began elbowing their way into Clinton’s circle of health care advisers, who numbered about 30 at the time.

“A lot of people were trying to bend his ear,” said adviser Ron Pollack, head of Families USA, a health care reform advocacy group.

“They meant well, but they contributed to his sense of unfocus,” said Washington lobbyist Bruce Fried, another key campaign health policy adviser.

Clinton asked Magaziner to take charge of producing “Putting People First,” which spelled out the policy proposals underlying the Clinton campaign. Before the book could go to press, on the eve of the Democratic National Convention in New York, a big problem arose. There were, in Magaziner’s words, “problems with some of the health care numbers.” They didn’t add up.

On a gorgeous Saturday afternoon in late June, Fried was home napping when the phone rang. Clinton wanted a conference call with his health care advisers--in half an hour.

Three of his top advisers, Pollack, Judy Feder and Atul Gawande, were unreachable. A frantic Fried rounded up several others.

When Clinton got on the line from the governor’s mansion in Little Rock, Ark., Magaziner expressed his discomfort with the numbers. Even if they were right, they could be subject to attack, Pollack chimed in.

Someone suggested omitting any mention of health care in the book. It was, after all, largely an economic recovery plan. Magaziner argued that health care must be included precisely for that reason. Clinton agreed.

But what about the faulty numbers? After a 45-minute debate, a frustrated Clinton finally ordered the numbers taken out.

“God damn it, now I know why no President since Franklin Roosevelt did anything about health care,” Clinton fumed.

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Coming out of their convention, the Democrats were jubilant. Clinton and his running mate, Al Gore, were making a triumphant bus tour across Middle America. Support for incumbent George Bush was softening, and independent candidate Ross Perot had quit the race.

But Fried, Magaziner, Pollack and the others were worried.

Clinton still seemed unable to deliver a coherent health care message from the stump--a victim of “too many competing ideas and different viewpoints,” Fried concluded. In California a month later, Garamendi also was troubled after hearing Clinton at a fund-raiser he hosted at his Walnut Grove home.

By early August, some of the GOP attacks against Clinton’s health care proposals were “beginning to stick,” recalled Gawande, a 27-year-old Harvard Medical School student who was on leave. It was time for Clinton to reconcile the competing viewpoints and, in Gawande’s words, “put in the next level of details.”

In mid-August, Gawande convened an all-day meeting at the Wexler Group, a high-powered lobbying firm that occupied the same Washington office building as the local Clinton-Gore campaign office. About 40 people attended, representing virtually every point of view.

Clinton himself was already moving toward a market-oriented approach that would rely less on government intervention and more on open competition to drive down prices.

After seven hours of lively debate, something close to a consensus was reached on a hybrid model that would create large consumer alliances to shop among medical providers for the best coverage plans. Managed competition, it was to be called.

A month later, a small contingent of health policy advisers flew to East Lansing, Mich., to brief Clinton.

It was Sept. 22, the day that the first presidential debate was to have been held on the Michigan State University campus. Bush had refused to participate, but Clinton was there to underscore Bush’s absence.

As thousands of students milled about on campus, waiting for him to appear, Clinton and his advisers convened at the Holiday Inn--in the Governor’s Suite. As they laid out the proposals, Clinton became animated.

“He’d take a minute part of the plan that we provided and talked about how it would fit in with his economic plan,” recalled Pollack. “He walked out of there with a much greater confidence and seemed to feel a whole lot more secure.”

Outside, Clinton delivered a rip-roaring speech attacking Bush for his economic record and for ducking the debate, telling his youthful audience that the key to economic recovery was health care reform.

The next day, Reed and campaign strategist Paul Begala began drafting a major health care speech that Clinton was to deliver the following morning in New Jersey. It took them all that night to pull the elements together. The snag, once again, was whether the amount of claimed savings was credible.

Looking back, none of it seemed to matter. “Our private polls showed that we’d won the health care debate before we even started,” Reed said.

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Five days after taking office, and with a greater sense of urgency than he let on, the new President announced the formation of a Cabinet-level health care task force.

There was no time to waste. Clinton had promised to deliver a comprehensive health care reform plan within the first 100 days. But his transition team never developed a specific action agenda. Also, some of his analysts were telling him that the price tag for health care reform could be much higher than anticipated.

Few advisers knew it at the time, but even before taking office, Clinton realized that he needed outside help. While vacationing near Santa Barbara at the home of Harry Thomason and Linda Bloodworth-Thomason, Clinton called Garamendi, reaching him at home just before midnight.

Garamendi by then had unveiled an innovative statewide health care reform agenda. Clinton asked him to convert the California plan into a national agenda. Within days, Garamendi and his top two aides, Walter Zelman and Larry Levitt, sent off a national proposal to the Clinton transition team.

When Garamendi and Zelman attended a transition team meeting on health care in Washington in mid-December, they learned that their recommendations were being embraced wholesale. Garamendi was less surprised when the President turned to his most trusted adviser, Hillary Clinton, to head up the health care task force. Magaziner was named to run the group’s day-to-day affairs.

Within hours of Clinton’s announcement, the First Lady was working the phones, looking for allies and assistance. Among those she called was Garamendi, whose program had been passed by the California Legislature but vetoed by Gov. Pete Wilson. Without hesitation, Garamendi recommended Zelman and Levitt.

At Hillary Clinton’s invitation, Garamendi and his wife, Patricia, also flew to Washington, spending a night at the White House in early February. Garamendi further sold the Clintons on the idea of incorporating the medical components of workers’ compensation and auto insurance into a new health care system. “The President really understood the concept,” Garamendi said.

It was Magaziner, though, who recruited most of the 500 experts--from Congress, federal and state agencies, universities and the private sector--who joined the process.

The task force’s role was much misunderstood even by many participants. Magaziner intended for them to merely test theories and do research. But many participants thought they were there to make policy. That misunderstanding would cause plenty of hurt feelings all around.

At the first meeting of a core group of task force workers, Hillary Clinton talked about the enactment of Social Security, recalling how its architects later viewed their work as the high point of their careers.

“It should be the same for all of you,” she said, looking around the room at the 25-or-so health policy aides.

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Even Magaziner concedes now that the overnight creation of a task force and the crash development of a health care reform plan became an exercise in “managed chaos.”

Analysts were summoned to Washington from as far away as Los Angeles, often with less than a day’s notice. Zelman was once called on a Monday and told he was needed for a meeting with Hillary Clinton on Tuesday.

Each morning, long lines of task force members tried to get clearance to enter the Old Executive Office Building. Once inside, many had no place but the floor to plant themselves and their overcoats. Desks, chairs, computers--even telephones--were scarce commodities.

Worse yet, a Draconian code of secrecy was imposed by Magaziner. There could be no unauthorized contact with reporters, and paperwork was to be kept to a minimum. Even contact with task force members assigned to other work groups was sternly discouraged.

“A lot of work had to be done without knowing what the context was,” complained one work group leader. “It was like trying to design a new national transportation system without knowing whether there will be trains, cars, airplanes or bicycles.”

The lack of information also required numerous meetings between groups. “I’ve never been in a process where there were so many meetings--an ungodly number,” said UCLA public health professor Robert Valdez.

Given the group’s diversity, many meetings were slow to get off the dime. “People even had different ideas of what managed competition is,” Valdez said. “And some people from the South didn’t know what a health maintenance organization was.”

Each work group was given assignments and deadlines that required virtually round-the-clock work. “It was a shock,” said Rick Kronick, a task force leader who took a leave from UC San Diego. “I went to meetings all day and wrote memos most of the night.”

When Kronick ran into an acquaintance last spring and the friend suggested an after-work drink, Kronick readily agreed. “How about 11:30?” he suggested.

Valdez, as co-chairman of a group that developed a standard benefits package, went out of his way to foster a more hospitable working environment. While other work groups settled for stale sandwiches or pizzas for dinner, he had elaborate meals for his team catered by Chinese, Italian and Thai restaurants. Over such meals, the group managed to analyze more than 1,000 health insurance plans and review the published literature on the subject.

To review and monitor the progress of the work groups, Magaziner scheduled “tollgate” meetings that sometimes ran for 10 hours or more at a time, with some that started as late as 10 p.m.

Despite the group’s frenetic pace, the President did not meet his self-imposed early May deadline. In the spring, Hillary Clinton was absent for several weeks, attending to her dying father in Little Rock. “The whole process froze,” Magaziner recalled.

Even after her return, health care remained on the back burner as the Administration focused on getting Clinton’s budget passed. Only now are the Clintons putting the finishing touches on the plan that the President will introduce Wednesday night.

By then he will have made more than 1,000 individual decisions.

In defense of the controversial process he created, Magaziner said it was perhaps inevitable, given the nature and urgency of the assignment, that frustration and unhappiness would arise.

“But I think in terms of accomplishing the goal, it was a very good process,” he said over a recent dinner in his second-floor corner office in the Old Executive Office Building.

Pointing to a credenza lined with thick three-ring binders, Magaziner concluded: “They’re going to serve us very well as we go through this process, because basically we have gone down a whole lot of option trails. . . . And as people raise ideas, in Congress and elsewhere, the chances are that we’ve thought about it and we can say: ‘Well, we looked at that, and here’s why we didn’t go that way.’ ”