NEWS ANALYSIS : Ailing Health Reform Could Stage Recovery

Eleven months ago, when President Clinton stood before a joint session of Congress and unveiled his health care reform proposals to bipartisan applause, the effort to restructure the nation’s health system looked like a marathon runner heading for the final mile.

Today, the effort more closely resembles a patient on life support.

Of course, the patient’s parlous condition does not rule out a recovery. Congressional veterans can reel off examples of weighty legislation, from deregulation of natural gas prices in the late 1970s to tax reform in the mid-1980s, that died a thousand deaths but rose in the end.

In the Senate, particularly, Democratic leader George J. Mitchell of Maine appears to have stitched together a package that could, eventually, gain a majority. Republicans have so far blocked votes on any amendments to Mitchell’s bill--a sign, perhaps, that they believe that if test votes were held, Mitchell would win.

But in the House, which many oddsmakers had thought would have an easier time with health care reform, action has stalled, with no firm indication of when it might resume.

And even Mitchell’s Senate bill faces high hurdles. Many key senators, while saying they could accept central parts of the measure, reject a proposed new tax on high-cost health plans designed to discourage excessive health spending and to generate revenue for subsidies to low- and middle-income working families. Others, including the nonpartisan Congressional Budget Office, have raised serious questions about whether key elements of Mitchell’s plan, necessary as political compromises, would be unworkable in practice.

Administration officials and their allies argue that only large-scale reform will work--that incremental changes in the health system are the equivalent of trying to jump halfway across a gorge. But those arguments run up against the natural tendency of Congress to seek a politically safe middle ground.

“You cannot control costs, you cannot reform the insurance industry unless you have universal coverage,” said House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.). But, Dingell conceded, incremental alternatives will be very attractive to “all the white mice and all the timid souls who want to rush through this thing and say we have voted for a compromise.”

Finally, even if those problems can be surmounted, all reform efforts now face the awful pressure of the clock, which threatens to tick down before a bill can be enacted.

What went wrong?

The answer, according to White House officials, members of Congress, lobbyists and congressional observers, is a host of factors: The inherent difficulty of the enterprise, Clinton’s weaknesses as chief executive, declining voter anxiety about the economy, the increasingly partisan Republican response, deep-grained public skepticism about government, and White House missteps in the preparation and sale of the health plan all combined to reduce the prospects of any reform bill’s passage.

The biggest single problem might simply be the scale of the effort. Health care accounts for more than one-seventh of the U.S. economy, affects almost every interest group in the nation and touches the average family at the most personal level.

In recent weeks, Clinton has taken to noting that Franklin D. Roosevelt, Harry S. Truman, Lyndon B. Johnson and Richard Nixon all tried--and failed--to get major health care reform bills through Congress. Unstated, but implied, in such statements is the message that voters should not blame him too much if he also falls short.

Even some of Clinton’s opponents accept that argument. “It’s just a huge undertaking,” said Rep. Jim Slattery (D-Kan.), whose opposition was one reason that the Energy and Commerce Committee failed in its effort to write a health care bill. “I don’t know that you can say that somebody’s strategy failed, or that somebody was the bad guy. . . . It’s a bridge too far.”

White House officials like to compare health care reform with enactment of Social Security under Roosevelt and Medicare under Johnson. But “Medicare passed after the 1964 landslide against Barry Goldwater, and Social Security passed after one of the greatest crises in American history,” noted Republican strategist William Kristol.

In trying to repeat such a feat without a major crisis to spur action, “there was a little bit of hubris here,” he said.

Indeed, in one of the ironies of the debate, Clinton’s successes on economic policy might have undermined his case for health care reform. As the economy has improved, middle-class Americans have stopped worrying so much that they might soon lose their jobs, and thereby lose their health benefits.

That change might have made them less willing to support major restructuring of the health care system, although pollsters disagree about the strength of the link between the two issues.

What no analysts disagree about is that an undertaking as huge as reshaping the health care system has been made doubly difficult by the deep skepticism Americans feel toward government.

For many lawmakers, those doubts have been symbolized by a story, often repeated on Capitol Hill, about a member of Congress who was accosted by an angry constituent who said he opposed the health bill.

“I don’t want the government messing around in Medicare,” the constituent said, apparently unaware, or unwilling to concede, that the giant medical program for the elderly is a wholly government-run enterprise.

So long as Clinton talked about the problems facing the health care system, a majority of Americans agreed with him. But as soon as he, or anyone else, began outlining proposed solutions, doubts began to overwhelm the proposals.

“If you look at our society in general, there are so many splintered voices of authority, and there is so much skepticism, even cynicism, about the political process,” said First Lady Hillary Rodham Clinton. Because of that skepticism, she said, “huge amounts of money spent to convey an intense, negative message has a very powerful impact.”

Despite those inherent problems, many say they believe that the Administration could have handled its case better.

The first stage of the process, the lengthy study by an Administration task force run by Hillary Clinton and White House policy adviser Ira Magaziner, comes in for almost universal criticism inside and outside the Administration.

The task force worked in secrecy, allowing opponents to plant the idea that its participants were up to no good. While the First Lady and others held extensive talks with members of Congress, including Republicans, the failure to include any in the task force lost what could have been a key opportunity to co-opt potential opponents.

Despite the length of the task force process, when the President finally presented his plan in a nationally televised speech last September, the White House was still unprepared.

Officials had talked of having booklets and other explanatory material ready to send across the country in order to make the case to voters following the President’s speech. Instead, they had nothing. At a time when Americans were deeply curious about exactly what Clinton was suggesting, opponents were able to fill an information vacuum with their own derogatory descriptions of the plan.

Some critics argue that the President and his aides made a crucial error by insisting on providing health coverage to everyone instead of starting with a less-sweeping package, then compounded the error this past winter when Clinton vowed during his State of the Union speech to veto any bill that did not include universal coverage.

“They were attached to madness. They were attached to scientific impossibility,” complained one senior congressional aide. “If they would have gone to 95% (coverage) in March, they could have had (Senate Republican leader) Bob Dole. We’d be in a legislating mode now, rather than a frenzy. They’ve missed every single turn in the road in timing.”

White House officials angrily deny that. “I thought the veto threat was a good idea then. I still think it was a good idea,” said one senior official. “It shows people what we are fighting for. People know where (Clinton) stands.”

The real problem, according to this official and others in the White House, is that Clinton’s political weakness on issues other than health care caused Republicans earlier this year to abandon conciliation and move to an all-out attack.

Last year, for example, 20 Republican senators, including Dole, co-sponsored a bill that promised to achieve universal coverage through a requirement that all individuals buy insurance. Dole publicly said he thought the country faced a health care “crisis” and sharply criticized Kristol for urging Congress to reject Clinton’s plans outright.

By now, all 20 of those Republicans have disavowed their original plan, Dole has abandoned talk of a crisis, and talk of compromise has faded away.

“When they sensed a political opening, their support for health care melted away,” the senior White House official said. “This had a lot to do with events outside of health care,” referring to such problems as Whitewater, the sexual-harassment suit filed against Clinton by Paula Corbin Jones and the Administration’s reversals on foreign policy matters.

Indeed, even Republican strategists such as Kristol agree that in late winter and early spring, GOP opposition to health care reform began to harden. Lawmakers who earlier talked of compromise began to speak more openly of killing Clinton’s bill outright.

The increasingly fierce nature of the opposition compounded a pre-existing problem: Clinton’s potential allies in the health care reform fight proved far more timid than his opponents.

Administration strategists knew that many small businesses would reject any plan with the so-called employer mandate requiring companies to purchase insurance for their workers, but they hoped to gain significant support from big businesses that already provide coverage.

Instead, while some businesses, such as automobile and steel companies, have lobbied for Clinton’s plan, most large companies have stayed on the sidelines, in part because top executives, most of whom are Republicans and conservative, decided they were uncomfortable pushing for a liberal Democratic initiative.

The U.S. Chamber of Commerce started out in favor of the employer mandate. But in February, its board retracted that support. Within days, two other business groups--the National Assn. of Manufacturers and the Business Roundtable--joined in the rejection of Clinton-style plans.

Similarly, the American Medical Assn. endorsed universal coverage and the employer mandate two years ago, but backed off last December. In July, the AMA shifted position again, joining the AFL-CIO and the American Assn. of Retired Persons to again call for universal coverage. This past week, the doctors flipped a third time, saying they would support an incremental reform bill proposed by conservatives in the House, rather than the universal coverage bills backed by the Democratic leadership.

Meanwhile, some groups that had much to gain from comprehensive health care reform remained eerily silent. Some hoped to gain greater bargaining leverage, others were unsure what to do.

The most notable was the AARP, whose 33 million members would have benefited from Clinton’s proposals to expand coverage for long-term care and outpatient prescription drugs.

The AARP’s leadership resisted repeated personal overtures from the President to support his plan. Instead, like other groups that were generally in favor of the Clinton approach, the AARP talked up long-term care and drug coverage without mentioning Clinton.

This became a pattern throughout the past 18 months. “People who opposed reform attacked the Clinton plan by name. But supporters just talked up the elements,” said one lobbyist. Only this past week did the AARP leadership explicitly endorse the Democratic bills.

Those who opposed Clinton from the outset have been not at all reticent. The Health Insurance Assn. of America represents small- and mid-sized insurance firms, many of which faced bankruptcy under a Clinton-type reform plan. The HIAA launched the highly successful “Harry and Louise” ad campaign that raised doubts about the President’s plan.

The opposition came even though HIAA shared many of Clinton’s other goals, such as the employer mandate and universal coverage. Earlier this year, HIAA President Willis D. Gradison Jr. met with White House officials Harold M. Ickes and George Stephanopoulos and, during the course of a long conversation, suggested that an effective advertising campaign could be made to promote their common goals. In the end, those talks came to naught.

The combination of hesitant support from friends and unstinting opposition from foes has left many senior legislators and Administration officials exhausted and dispirited.

“Ultimately, a lot of us, a lot of groups, have to sublimate their concerns to some extent in order to get the group, the society, to be able to step forward and to change things for the better,” said House Majority Leader Richard A. Gephardt (D-Mo.). “If everyone is just going to focus in on their narrow viewpoint on a particular issue, we’re never going to get to the consensus that we’ve got to have in this society to move forward.”

And after months of fighting, some in the Administration have begun, at times, talking in the language of post-mortems.

“You win some and you lose some, but at least you kind of pushed the ball and you keep moving the public debate,” Hillary Clinton said in a recent interview. “So I think this is a political issue that is not going to go away, no matter what happens.”

Times staff writers Karen Tumulty and Edwin Chen contributed to this story.