Operation Hillary

By MICHAEL DUFFY

Hillary Rodham Clinton appeared last Thursday to be taking it easy. Her office announced that she had only one meeting planned -- with five female Senators to discuss health care. What her aides neglected to mention, however, was that before that session Hillary had a 45-minute chat with Representative Ron Wyden about the "core benefits" package that Oregon law guarantees its eligible residents. Then came an hourlong chat with Senator Jay Rockefeller, Representative Sonny Montgomery and others about how best to integrate the nation's $14 billion veterans' hospital system into a new national health-care framework. Next she tackled some financing questions in a private conference with Senator Daniel Patrick Moynihan. Before she finished, around 7 p.m., she had squeezed in radio interviews with 20 different stations and satellite interviews with nine TV outlets in Florida and Iowa.

Ever sensitive to critics of the First Lady's influence, Hillary's office refused to release the full details of her day even after it ended. But other White House officials were undaunted. "O.K., O.K., O.K.," said one. "I guess we might as well admit that we actually have 12 Hillarys."

The White House may soon wish it had even more than that. For Hillary's still-developing plan to transform the nation's health-care system is emerging as the most challenging and far-reaching domestic initiative of Bill Clinton's presidency. Selling Congress, much less the American people, on a complete overhaul of an $800 billion-a-year industry that represents one-seventh of the gross domestic product makes selling a controversial budget plan look easy. "Of all the decisions he has made," said one adviser, "doing health care involves the highest risk and is most indicative of his desire for change."

Some of Clinton's top advisers still don't understand why he is so intent on reforming health care this year. Yet Clinton has said for weeks that businesses won't start hiring unless they are free of rising medical costs. The President's political aides note that much of the free-floating anxiety that Americans feel is rooted in fears of health-care expenses and worries about losing their coverage. "People are not going to feel secure," said an adviser, "until they feel they can afford to be sick."

In many respects, the health-reform task force is going to test a central working assumption of the Clinton team: that the best way to solve any problem is to assemble the smartest people in a big room and pull a lot of all- nighters. The goal is nothing less than to find a way to provide universal access to health care while lowering costs for patients, companies and the government. Though the American Medical Association and other groups have complained of being cut out of the process, more than 400 task-force officials have held 237 meetings with outside interest groups and have convened more than a thousand private sessions of its working groups. White House aides dismiss critics' complaints of exclusion. "The AMA doesn't just want a seat at the table," says one. "They want the whole bleeping table."

The White House won an important victory last Wednesday when a federal judge ruled that the task force and its subgroups may meet in secret if they are preparing or providing advice for the President -- a ruling Hillary applauded as "a stamp of approval." Still, not everyone at the White House is convinced that the health-care tangle can be unraveled by unnamed experts working around the clock in secret. Asked last week if the crash program will be successful, Treasury Secretary Lloyd Bentsen paused, smiled and said, "We're about to find out."

The task force is proceeding according to a carefully scripted, day-by-day "work plan," written by White House aide Ira Magaziner, that one official called "more complicated than a major state university's schedule of classes." During the 100-day life of the task force, the 34 working groups will report seven times to a large review board called a Tollgate and chaired by Magaziner. At first, participants were skeptical of the Tollgate sessions, during which options are discussed and amended. "Now," said a working-group member, "people can't handle it unless we're having a Tollgate." Last week in the ornate Indian Treaty Room on the fourth floor of the Old Executive Office Building, Tollgate 3 went on for 18 hours one day and 14 hours the next, with only three breaks.

This week Magaziner's team begins to move from gathering ideas to discarding them. Only the barest outlines of the plan are known. Hillary is leaning toward a health-care delivery system called managed competition, in which giant networks of businesses would negotiate with insurers, health-maintenance organizations and other health-care providers for the best care at the lowest price. In theory, competition among providers would force down costs and drive doctors into joint practices and HMOs. Employers would be required to provide basic health insurance to all employees, while the government would provide coverage for the uninsured.

The tricky part of selling such a scheme will be convincing Americans who already enjoy lavish health-care coverage that they will have to pay more for fewer options. So it is likely that the Clintons will try to modify managed competition to meet the range of political imperatives. The task force must design a package of core benefits in conjunction with hospitals and insurance companies, determine how people who want more coverage can obtain and pay for it, decide how to keep the costs incurred by the new super-providers from rising as fast as health-care costs are already rising, calculate how to help small businesses that can't afford to provide insurance, and determine how best to integrate the enormous Medicaid, Medicare and veterans' beneficiaries into the new system. Hillary has indicated to lawmakers that the final package will also include some kind of liability reform, both to help bring down doctors' costs and to enlist their support for the plan.

The stickiest questions turn on costs. Bill Clinton has signaled that he will boost taxes on alcohol and tobacco to help meet the $50 billion-to-$70 billion price tag for providing insurance to America's 37 million uninsured. Sin taxes alone, however, won't be enough. Last week Magaziner privately asked representatives of large and small businesses how best to cap costs in the short term while phasing in benefits more slowly. That idea concerns some in the White House, who insist, as one put it, "We have to create winners before we create losers."

In the past two weeks, the AMA, U.S. Chamber of Commerce and the Pharmaceutical Manufacturers Association have publicly jumped on the managed- competition bandwagon. Under fire from the White House for price gouging, the drugmakers last week asked the Justice Department to grant an exemption from antitrust prosecution so that they can negotiate voluntary price restraints. "The train is leaving the station," said a drug lobbyist. "We're just trying to slow the train down long enough . . . to get on board."

Until now, Hillary has not submerged herself in the day-to-day work of the . task force but has been briefed regularly by Magaziner. For the most part, she has played congressional lobbyist, paying calls on members and listening for ideas while a trio of aides take copious notes. Lawmakers report that the First Lady, for all her reputed aloofness, knows the right moves. When Illinois Democrat Dan Rostenkowski suggested to Hillary that her husband was sending her into a "huge hellfire" on health care, she adroitly replied, "You know, Mr. Chairman, Chicago looks a lot better as a result of that fire." Legislators always get a letter the next day -- and sometimes a picture -- thanking them for their thoughts on very specific subjects. "This is not a casual exercise," said a top White House aide. "She is making a set of judgments about where there are sensitivities and who will be natural allies."

She is also involved in legislative strategy. For the past few weeks, Democratic leaders in the Senate have been wrestling with ways to attach the health-care bill to the economic package in a giant superbill later this year. Senate rules made the gambit look unlikely from the start, but last week Hillary joined one final push on the issue before Senator Robert Byrd confirmed that it wouldn't be appropriate.

The general public has yet to see the Hillary who is everywhere at once, perfectly conversant on 100 different health-care topics. For now, her goal is to avoid becoming a distraction -- or a target for opponents. At a health-care forum last Friday in Tampa, Florida, a visibly tired Hillary listened quietly while witnesses made their cases for various reforms. She usually made her comments, such as they were, in the form of a question, much as Justices do when they hear oral arguments at the Supreme Court. Meanwhile the other 11 Hillarys were probably working back in Washington.