MEDICARE: SELLING A PAINFUL CURE

By NANCY GIBBS

If politicians have figured out anything about medicine, it's that a bedside manner makes a difference. Hillary Clinton learned this painfully, when the postmortems on her health-care plan suggested that her high-handed style hastened its demise. Newt Gingrich is not about to make the same mistake. He has known for months that his whole grand scheme to balance the budget depends on reinventing Medicare, one of the biggest, fattest, most popular and most expensive pieces of the Federal Government. So back in the spring Gingrich began plotting his moves, all the while bearing in mind that when you are forced to deliver bad news, you should do it very, very carefully.

This week, after months of stealthy preparations, the Speaker plans to take his campaign public, with a speech scheduled for Monday in Cleveland to lay out his sales pitch, though not an actual plan; that will wait until fall. Before Congress breaks for its August recess this week, he intends to prime his troops to deliver the message. It goes like this: Medicare's own trustees say the program will go bankrupt in seven years; the Democrats are too lily-livered to do anything about it; and so it is up to the Republicans to "save Medicare" by clamping down on its growth rate and producing $270 billion in savings over the next seven years. When Gingrich talks about the fight ahead, he seems almost giddy. "I have every confidence that if we get up every morning focusing on Medicare and we stay on top of this issue, we'll do fine," he says. "My only fear is that we will fail to do that, and we'll get blindsided. If we back off on any of it, we'll fall apart."

The Democrats, who have seen this coming, are using the 30th anniversary of Medicare to launch their pre-emptive strike. "I got the message of the 1994 election," Clinton declared at a birthday rally, "and I'm not going to let the government mess with your Medicare." Again and again, the President poked at the soft spots in the G.O.P. numbers, charging that the $270 billion taken out of Medicare would be used to pay for the G.O.P.'s $245 billion in tax cuts "for people who don't need it." Gingrich replied that Clinton was trying to scare senior citizens in order to get re-elected, "a very despicable strategy."

Neither side is being very gentle with the truth: some of Medicare's mossiest Democratic defenders are pretending that Medicare can remain sacrosanct, even though Clinton himself has proposed savings of $127 billion over the next 7 years, less than half what the G.O.P. proposes. And in a new ad campaign on Medicare called "Too Young to Die," the G.O.P. warns, "We won't let seniors go bankrupt paying for health care," as though it were politically conceivable that one day seven years from now senior citizens would suddenly have to start covering all their medical costs. The real fight, of course, has already moved way beyond the rhetoric: it's about just how fast Medicare has to change, who will be hurt, and how much. Gingrich's first tactic is to persuade Medicare's 38 million beneficiaries that there is a crisis. To that end he will focus relentlessly on the gloomy report from the Medicare trustees, three of whom are members of Clinton's Cabinet. Then comes the pitch, an updated version of the 14-year-old bumper sticker that said SAVE SOCIAL SECURITY--VOTE DEMOCRAT. Says Representative Bill Thomas, the California Republican who will be the point man in crafting the G.O.P. plan: "We're the ones who can put out the bumper sticker this time: SAVE MEDICARE--VOTE REPUBLICAN."

While the details of their proposal won't be unwrapped until September at the earliest, the contours are already clear. The G.O.P. will argue that Medicare recipients will be better off if they can choose from a number of managed-care options, like hmos and "preferred-provider organizations." Patients who wish to stay with the present fee-for-service system will have to pay more. Gingrich's private analogy is the "Medicare Mall." Says he: "It's as though we're offering the Wal-Mart or the Sears, Roebuck of health insurance, where everybody has the right to go choose. And the President's people are saying, 'No, no, no. Keep them trapped in the government cafeteria.'"

Millions of Americans have already been driven into managed care by their employers, which may give Gingrich the political cover he needs with the rest of the public, most notably the younger voters, who may not sympathize with complaints from the elderly about losing their right to any treatment with the doctor of their choice. As for accusations that he is "cutting" Medicare, Gingrich bristles with statistics. The goal, he says, is to slow the pace of overall spending growth, currently about 10% a year; but actual spending per patient would continue to rise. "It starts at $4,800 a year per senior citizen. It goes to $6,700 a year per senior citizen [over seven years]. Even with the grotesque demagoguery of the last few days, I cannot believe the Democrats can sustain for very long the argument that raising the amount $1,900 is a cut," he says.

As basic training, Gingrich last week ordered his troops back to a Capitol classroom for one of five one-hour lectures offered to arm them with the core principles of reform and the sound bites to defend them during the recess. In the meantime, the Speaker and his top lieutenants will continue to do what they have done for months: schmooze with the enemy. Any assault on Medicare means taking on the American Association of Retired Persons, the American Hospital Association and scores of interest groups devoted to keeping things just as they are.

This piece of the game plan is the clearest evidence that Gingrich learned from the last war. As co-chairman of the House G.O.P. health-care task force, he had a ringside seat for the White House debacle on that issue in 1994. Hillary Clinton's task force froze out powerful groups while the plan was being formulated, then tried to arouse public support by portraying insurance and drug companies as the villains of American health care.

Gingrich has spent more than 70 hours trying to charm and calm the opposition, from Blue Cross and Blue Shield to the American Medical Association. The 32 million-member AARP was the greatest challenge. Gingrich's diplomatic offensive began last March in the first of three private sessions with the lobby's leadership. Gingrich did not exactly wave an olive branch, but did manage to sound as if he genuinely wanted to cooperate. John Rother, the AARP's chief lobbyist, summarizes the message this way: "The Speaker told our board, 'I can't revolutionize Medicare over your opposition, and you can't do what you want to do over my opposition. So we need to talk.' He was very tactful." So far the AARP has remained fairly temperate; but that may have less to do with Gingrich's efforts than with the fact that for the moment there is no specific plan for them to attack. "As we get into September," promises Rother, "you will see us getting very aggressive in public." Then there will be the talk shows and the radio campaign, the ads, which the G.O.P. began running last week. Next Monday Gingrich plans to stage a splashy town meeting in Atlanta in order to hear from his constituents and, of course, move his message again. His advisers have warned him that he's playing a high-stakes game. "It's a very tough issue for Republicans because it requires education," says G.O.P. pollster Frank Luntz. "Facts are on the side of the Republicans. Emotion is on the side of Democrats. Can facts beat emotion?'' If not, he predicts, "This could be a fiasco."

The Democrats in Congress have been watching Gingrich's war games with mixed feelings. The optimists in the party are hoping that by taking on so sacred a cow as Medicare, while proposing tax cuts that seem to help wealthier Americans disprortionately, the G.O.P. is inviting accusations that it lacks fairness and compassion. Republicans point to polls showing that for the first time since before the 1994 elections, Democrats are running even with Republicans in terms of public confidence, and for one reason: among voters over 65, the Democrats lead by 28 points. "This is one of those defining issues that describe the difference between a Democrat and a Republican," Senate Democratic leader Tom Daschle says.

But to make the most of their opportunity, the Democrats will need a leader as skilled and focused as Gingrich, and some of them despair when they look at the White House. "We very much want [Clinton] in this fight," says a congressional aide. "We would be a hell of a lot more effective if he was more active in it, but I think there's no such thing as a permanent, firm commitment from him. He's with us this week. If next week Newt offers him a deal, my guess is he'll be with Newt."

While the Senate will also be shaping a reform plan, the debate there is moving sluggishly through the Finance Committee, where few revolutions have ever been hatched. It may be Gingrich who has the nerve and muscle to remake Medicare; if the Democrats are going to get in the game, they will first need to admit that the rules they have played by for years may have already changed forever.

--Reported by Laurence I. Barrett and Karen Tumulty/Washington

With reporting by LAURENCE I. BARRETT AND KAREN TUMULTY/WASHINGTON