Rival Health Care Debate Ads Take Outlandish Turn : Reform: Commercials backing Clinton’s program criticize Pizza Hut. Opposition links the controversial surgeon general to President’s plan.

As the effort to reform the nation’s health care system enters its final and possibly decisive phase, the escalating public relations war waged by policy advocates and interest groups is taking some bizarre turns.

On Friday, for instance, several television stations announced that they were declining to run advertisements by a group that supports President Clinton’s health reform proposals because of libel threats issued by the Pizza Hut restaurant chain, which is criticized in the ads. Democrats quickly countered by threatening hearings next week to investigate Pizza Hut’s health insurance practices, as well as those of rival fast-food chain McDonald’s.

The bullying and bellowing reflect the critical choices confronting lawmakers on Clinton’s most important domestic policy initiative. If Congress is going to reform health care before this year’s midterm elections, it has only three months left to act. And the choices it makes are certain to be influenced in part by the competing public relations campaigns.

Already, Americans are being barraged by an intense and potentially confusing round of advertising--much of it targeted at specific members of Congress.

Pizza and hamburgers were introduced to the debate when the Health Care Reform Project, a group that favors Clinton’s reform plan, released a study accusing McDonald’s and Pizza Hut of engaging in health care hypocrisy.

The two companies are leading opponents of Clinton’s proposal to make all employers pay the bulk of their workers’ health coverage. They have argued vociferously that the employer mandate, a fundamental element of Clinton’s plan, would impose an unbearable financial burden on some employers and cost tens of thousands of jobs.

But the Health Care Reform Project report says that both companies are expanding rapidly in countries that impose just such mandates, including Japan, Germany, Canada and Belgium.

“These companies are living proof that shared responsibilities work for employers and employees,” the report states. “But instead of applying their successful experiences abroad to the United States, these companies have effectively said to Congress and the American people: ‘Do as we say, not as we do overseas.’ ”

The advocacy group plans to run full-page advertisements in the New York Times and the Washington Post attacking Pizza Hut. “No matter how you slice it,” the ads declare, “Pizza Hut does not deliver the same health benefits in America as it does in Germany and Japan.” It planned to air similar television ads in Washington, D.C., over the next 10 days.

Pizza Hut, a unit of PepsiCo, moved quickly to sidetrack the television campaign. It had its Washington law firm send letters to all of the affected stations, arguing that the ads are false because they suggest that Pizza Hut offers no health insurance to its U.S. employees.

If the stations decided to run the ads anyway, the letter suggested, the company might sue for libel. All of the stations subsequently declined to broadcast them.

Pizza Hut’s preemptive strike prompted Senate Labor and Human Resources Committee Chairman Edward M. Kennedy (D-Mass.) and House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.) to suggest that they might schedule congressional hearings to get to the bottom of the company’s benefit policies.

“We have a question for them,” Kennedy said at a press conference. “What do they have against American workers. . . . ? Why do they want to treat Japanese workers, German workers, Belgian workers, Netherlands workers . . . better then they treat American workers here at home?”

Kennedy asked the chief executives of PepsiCo, Pizza Hut and McDonald’s to testify before his committee next Friday.

Rob Doughty, Pizza Hut’s vice president of public relations, said that his company has been singled out because it dared to speak out about its experience with employer mandates abroad. “They (mandates) are a disaster,” Doughty said. “The same pizza that costs $11 in the United States costs $19 in Germany and $25 in Japan and the primary reason for the cost differential is mandated health care.”

Serving up its own response to the Health Care Reform Project report, McDonald’s issued a statement observing that business practices vary considerably from country to country and involve many complications besides health benefits. Focusing on medical coverage in isolation, it said, is too simplistic.

Senate Minority Leader Bob Dole (R-Kan.), who is leading the attack on Clinton’s plan in the Senate, plunged right into the pizza flap. In an address to the American Medical Assn., Dole stated that forcing Pizza Hut to help provide health insurance for all of its part-time employees would make one of America’s favorite fast foods prohibitively expensive.

Pizza Hut, which is based in Dole’s home state of Kansas, has 190,000 part-time employees, Dole said, and “the Clinton plan would cost them $200 million.”

The Sunflower State’s other senator, Republican Nancy Landon Kassebaum, agreed with Dole. The Clinton plan would double the price of pizza, Kassebaum said, and “give America the same thing that government controls have given Europe--high prices, high unemployment and weak economies.”

That verdict is hotly disputed by some lawmakers, particularly Democrats. Sen. Paul Simon (D-Ill.) said at another event that the cost of employer mandates would be considerably less than Republicans suggest. Under a Clinton-style reform plan, many small businesses that already provide health coverage would wind up paying less than they do now, Simon said.

But the pro-Clinton contingent by no means has a franchise on acidic advertising. Some of the more pointed messages are emanating from the right.

Gary Bauer, a conservative activist in Washington, placed an ad in the staunchly conservative Washington Times, linking health care reform to Clinton’s controversial surgeon general, Joycelyn Elders. She has become a political lightning rod to conservatives because she has suggested that the nation should consider making some drugs legal and has expressed support for gay adoption.

“Bill Clinton Chose This Doctor,” states the Washington Times ad, which features a photo of Elders. “Now He Wants To Choose Yours.”