PERSPECTIVE ON HEALTH REFORM : A Little Gridlock Might Help : Clinton’s plan is unworkable. This is Congress’ chance to make something better, instead of worse, by tinkering.

Bill Clinton is full of good ideas. His original jobs proposal was excellent; so was his budget proposal. Congress, however, killed one and radically transformed the other. Special interests, factional infighting and the Prince of Gridlock Sen. Bob Dole (R-Kans.) were the culprits, undoubtedly helped by White House tactical mistakes.

Clinton’s best idea is health reform. Universal health insurance is America’s most critical domestic issue, and candidate Clinton made its passage a top priority. But unhappily, from what we know of the “managed competition” proposals emerging from the task force led by Hillary Rodham Clinton and Ira Magaziner, we--ardent proponents both of universal health insurance--find ourselves hoping for a bit more congressional gridlock.

We would still argue for passing the Clinton proposal rather than nothing. But the President’s proposal is flawed in ways that have everything to do with means and nothing to do with basic principles--universal insurance and health care of high quality at affordable cost.

The problem with the Clinton proposal is that it already looks like a Clinton idea that has been massaged by Congress. Although the President’s plan has many good features, it is hardly the brilliant start that reformers anticipated.

First, maintaining work-based health insurance creates unnecessary and costly complexity and depresses the demand for workers. Simplicity should be one of the highest priorities for reforming a medical-care system that spends three times as much on administration as the next-worst of the advanced nations. Continuing the financing of health insurance through what amounts to a tax on employment (whether you call it employer mandates or payroll contributions) will increase unemployment. The President, to be fair, knows this. He sticks with employment-based financing because he fears even more what his political opponents would do if he proposed a straightforward tax.

The proposals coming out of the task force also aim to reduce costs by changing the behavior of doctors, hospitals and patients, rather than addressing the complexity of insurance companies and the role of large employers as insurance providers. This is backward. Such a plan fails to give patients choice precisely where they want it--at the point of service--in favor of choice of insurance plans. This again increases administrative costs while confusing consumers.

The attempt to force patients and physicians into HMO-style practice, including some serious effort to “manage” the care that is provided, will interfere with professional judgment and physician-patient autonomy. Once again, there is no reason to take this approach. There are plenty of other effective ways to promote preventive medicine and constrain spending.

Finally, the Clinton proposals seek to control costs by methods that are known not to work, are uncertain to work or may severely restrict access to needed care. Managed competition alone clearly does not work, because providers can shift costs. Managed competition combined with an overall restriction on total payments (the apparent Clinton plan) is unproven as a universal system anywhere in the world.

The fallback position of the Clinton plan seems to be this: Constrain costs by restricting the number of procedures, ailments or conditions that universal health insurance will cover. Certain groups will be well-served, others less so. The plan retreats from the promise of universality and again will require an enormously complex administrative system to set and keep the boundaries between insured and uninsured care. This being America, there will certainly be massive litigation about coverage.

The Clinton plan is not just flawed policy, but also bad politics. It is simply too complex to explain. From the very beginning, the task force refused to consider straightforward, government-administered universal health insurance, saying it is not politically feasible. Instead, they produced a slogan (“managed competition”), inexplicable proposals (details not yet available) and a fragile, complicated administrative design.

Selling such a scheme as a device to reduce the federal deficit or national health costs is perilous. Overpromising is a political time bomb. In the first place, competing health networks are unworkable in large parts of the country--the rural, agricultural, sparsely settled areas where one is lucky to find any hospital close at hand, let alone competing ones.

Managed competition is an example of an idealized model blocking realistic steps toward improvement. Needed are cost control, universal insurance protection and a willingness to deal with the way medicine is now practiced.

Happily, there are options to taking this plan or rejecting it. Better proposals already before Congress include the single-payer plans by Rep. Jim McDermott (D-Wash.), Sen. Paul Wellstone (D-Minn.), and Sen. Tom Dashiell (D-S.D.); the universalized Medicare proposal of Rep. Pete Stark (D-Oakland) and the “pay or play” plan of the Senate Democratic leadership. Our hope is that Congress will pass one of them, rather than making the Rube Goldberg presidential plan even more complicated, or perhaps defeating the whole thing.

After all, the President has shown a great capacity to accept “compromises” that verge on reformulation--perhaps a mistake on the economic package, but not this time. And, even better, the President has committed himself to allowing the states flexibility in developing alternate plans. As long as the national legislation permits simpler and more effective reforms, all will not be lost.