THE CLINTON HEALTH PLAN : California’s Reform Gurus


These five Californians made key contributions to President Clinton’s health reform plan.

Alain Enthoven

* Age: 63

* Occupation: Marriner S. Eccles professor of public and private management, Stanford Business School. Has held positions as an economist with the Rand Corp. and as an assistant secretary of defense. Helped England and the Netherlands reform their health care systems.


* Role in reform: He was a member of the prestigious Jackson Hole group that established the “managed competition” philosophy behind the Clinton plan. Enthoven was called on for advice but was not a member of the Clinton health reform task force.

Enthoven is considered the intellectual “father” of managed competition, arguing in two 1989 papers in the New England Journal of Medicine that everyone not covered by Medicare or some other public program should be able to buy affordable coverage either through their employers or a public sponsor. Managed competition, he proposed, would control the waste and excess that bogs down the current system. However, he has been critical of some elements of the Clinton plan, saying that it has too many regulatory controls and may have trouble passing Congress.

* Quoted: In the past two decades, “the incentives were there for health care providers to do more and more whether it was necessary or beneficial to the patient. There was no reward for doing things in a less costly way.”

John Garamendi


* Age: 48

* Occupation: California Insurance commissioner. Ex-Peace Corps volunteer; Harvard MBA. Elected to state Assembly in 1974 and to state Senate in 1976.

* Role in reform: The Garamendi plan to provide health care to Californians, launched in 1992, became a springboard for the Clinton plan. At Clinton’s request, Garamendi developed the state plan as a model for the nation. Although Garamendi did not serve on the task force, he has been an active participant in discussions in Washington.

The Garamendi plan was one of the first to pair government price controls with managed competition. It proposed setting up regional purchasing cooperatives to bargain with private insurers and HMOs for reasonable prices. The other element of his plan was a payroll tax paid by employers, with workers contributing. Clinton dropped the payroll tax proposal.


* Quoted: “It’s inefficient in that 25% of every dollar that enters the medical system is used for administrative expenses: paper pushers, computer systems, tracking claims, tracking forms.”

Walter Zelman

* Age: 49

* Occupation: White House health care policy adviser. Received Ph.D. from UCLA in American politics. Formerly executive director of Common Cause. Ran for insurance commissioner against Garamendi and lost. Garamendi then hired him to develop a state health care plan.


* Role in reform: An architect, along with Garamendi and Larry Leavitt, of the California plan produced in 1992. When Garamendi’s plan went to Washington, Zelman went with it.

Zelman did hard work in the trenches in formulating the Garamendi plan. The plan blended elements of competitive and regulatory approaches and worked to make a competitive system more compatible with democratic values. He touted the plan as incorporating the best of managed competition, single-payer and play-or-pay employer mandates.

* Quoted: “To the average individual, the proposals we’re making won’t be very disruptive. In fact, most individuals will still go to the same doctor, will still enroll in the same health plans they’re in now, or have the choice to choose another.”

Larry Levitt


* Age: 30

* Occupation: White House health care policy adviser; former Kaiser Permanente economist. In the 1980s, he worked for then-Gov. Michael S. Dukakis’ Administration to implement Massachusetts’ health plan. Before joining the health care reform task force, Levitt worked for Garamendi.

* Role in reform: One of the three architects of the Garamendi plan, which became the basis for many of Clinton’s proposals. A student of managed competition proposals, he toiled on many of the fine points in Garamendi’s plan, including how to marry the managed competition plan pushed by Enthoven with a publicly financed system. Helped with Garamendi’s proposal to integrate worker’s compensation into the health care system.

* Quote: “It is a relatively simple matter to suggest that all employers should be responsible for contributing some defined percentage or amount toward health coverage for their employees. But exactly how employer contributions are structured has important implications for, equity, risk selection and redistribution of resources relative to the current system.”


Richard Kronick

* Age: 40

* Occupation: Assistant professor in UC San Diego’s Department of community and family medicine. Earned a Ph.D. in political science with a dissertation on health care financing and the poor. Worked as a health policy consultant for health organizations, employers and government agencies. A protege of Enthoven’s, Kronick helped with designing policy options for providing affordable health care to the uninsured in 1987-89 work at Stanford.

* Role in reform: Member of Clinton task force on health care reform. Kronick coined the term “HIPC” or hippick (Health Insurance Purchasing Cooperative), a central tenet to the managed competition proposal. HIPCs would contract with health plans to provide service to large populations, seeing to it that care and services are adequate for the price paid. Kronick advocates that federal government should not try to impose managed competition or any particular model on states. States and HIPCs should act to determine the best way to provide service economically.


* Quoted: “We’re trying to create a system in which there’s more political and financial accountability. Right now, if your insurance premium goes up, who do you yell at? In this system, you would yell at the alliance and the state that created it.”