Local experts contribute to Clinton health care plan: Southland comprises microcosm of national challenge.

President Clinton is expected to further clarify his health care reform plans this week in his State of the Union address, and a number of L.A. County health care experts have played an important role in shaping those plans.

Little wonder President Clinton frequently tapped L.A.-area experts for their input on health care matters.

With about half of L.A. County's 9 million residents considered "medically at risk" because they are either uninsured or have government-subsidized insurance, Southland experts have plenty of first-hand knowledge about the shortcomings of the present system. They have had a lot to say about health care reform and their voices have been heard in Washington, D.C.

Despite being plugged into the national debate on health care reform, local experts said they have no concrete knowledge of what plan the Clinton administration will draft in the coming months. That plan is being drafted by a health care task force headed by First Lady Hillary Rodham Clinton.

But these local experts did offer their ideas on what's likely to transpire with health care reform, and what they would like to see happen.

Robert Valdez, one L.A. County health expert who advised the Clinton administration, said whatever plan is drafted will likely be labeled "managed competition," a blending of government regulation and free-market competition that wouldn't leave 30 million Americans without health insurance, as the present system does.

Valdez -- a professor at UCLA's School of Public Health and a health policy analyst with the Rand Corp., a government think-tank based in Santa Monica -- said the Hillary Clinton-headed task force is still hashing out a number of ideas.

Valdez said managed competition really is just a label, and the plan the task force ultimately comes up with could be quite different from what the concept's creators envisioned.

Those creators are Stanford University economist Alain Entoven and neurologist and pediatrician Paul Ellwood, who assembled a group of academics and health-policy experts to hash out the details of managed competition at Ellwood's home in Jackson Hole, Wyo.

Under the concept developed by its creators, managed competition would group individuals together into large health-insurance purchasing networks, and health care providers would compete for those networks' business. Employers would provide insurance to their employees, and unemployed people would get insurance through the networks funded by general tax revenues.

Valdez said he also expects a government-imposed cap on health care expenditures, but added that he is still unclear about exactly what that cap would be or how it would be implemented. Health care now consumes 14 percent of the nation's gross national product.

He said those involved in health care reform have reached a consensus supporting universal coverage because reforms won't work unless everyone is covered by health insurance. He said reformists also support organized health care delivery systems, such as the one used by Kaiser Permanente, one of the oldest and largest health maintenance organizations in the country. Not only does Kaiser offer health care for a monthly fee, but it also owns its own hospitals.

Rick Brown, Valdez's colleague at UCLA, also served as an adviser to Clinton. In addition, he helped Sen. Bob. Kerrey, D-Neb., draft "Health USA," a bill Kerrey used as a platform in his 1992 campaign for president and which he is considering reintroducing in Congress this year.

Under Health USA, everyone would get health insurance and each state would be responsible for making its residents' insurance premium payments. However, about 87 percent of the money the states would use to make those payments would come from the federal government. The national budget for health care, thus, would be the sum of state premiums. And, since all payments are, in effect, being paid by one entity -- state governments -- such systems are called single-payer systems.

Determining eligibility for health insurance would not be linked to whether or not a person is employed, and people would be free to choose from any health plan available in their area.

Instead of financing health care through private insurance premiums and out-of-pocket expenditures, health care would be financed through federal and state taxes.

David Langness, vice president of communications for the 230-member Hospital Council of Southern California, also has been consulting the Clinton administration on health care matters.

He said Clinton is too moderate to throw out the need for insurance companies, as is advocated by more socialized single-payer approaches. He said a struggle is heating up between forces supporting competition and those who advocate a more socialized system of medicine.

Langness said putting federal price controls on health care, which President Clinton has been supporting, conflicts with the concept of managed competition, under which prices would at least partially be determined by market forces.

He said the problem with providing health care through an employer mandate -- requiring all employers to provide insurance through an increased payroll tax -- is that it's not an "economic magic bullet."

Employer-mandated insurance, however, does have the support of a number of L.A. County health experts, including Dr. Richard Corlin, an L.A. doctor and president of the California Medical Association, and state Assemblyman Burt Margolin, D-L.A., head of the Assembly Health Committee. Both have connections in Washington, D.C.

Corlin said he met with Washington heavyweights -- Sen. John D. Rockefeller, Sen. Edward Kennedy and Rep. Henry A. Waxman -- when they were in L.A. visiting the Venice Family Clinic about three weeks before the national elections. Corlin also served on an advisory committee with Donna Shalala, the newly appointed director of the U.S. Department of Health and Human Services.

Other L.A. health care connections to Washington include the fact that Margolin served as Waxman's chief of staff from 1975 to 1977 and again from 1980 to 1982. Waxman himself is a Democratic congressman from L.A., and he is chair of the House Subcommittee on Health and the Environment. The California Political Almanac states: "Probably no Democrat has more influence on health issues (than Waxman)."

Corlin said he supports an employer-mandated health care policy because he doesn't see any other way of paying for health care.

"The only tax politically available is the payroll tax," he said, adding that no fewer than 22 bills calling for an employer mandate are now being considered by Congress.

Meanwhile, on the state level, Margolin introduced a bill in the California Legislature last year that called for universal health insurance funded mainly through employers. The state's estimated 6 million uninsured would be covered by the state.

In the private sector, Rand Corp. came out with a book called "Health Benefits and the Workforce" last June and used Judith Feder, Clinton's new undersecretary of the U.S. Department of Health and Human Services, as a sounding board, said Arleen Leibowitz, a senior economist with Rand.

Leibowitz said she also expects reform efforts to result in a health care system under which employers would pay for their employees' health insurance and the government would take care of the uninsured. She said she also expects to see more government reform aimed at making health insurance more affordable to small businesses.

A couple of other health care experts in L.A. County are also very vocal on health care reform issues, and they are both part of national coalitions. They are John Beauchamp, statewide coordinator for Health Access, an advocacy coalition, and Michael Cousineau, executive director of Homeless Health Care.

Both support a more socialized single-payer system under which the government would reimburse services.