The year was 1980. Dr. Otis "Doc" Bowen, Republican governor of Indiana, watched in despair as his wife of 41 years suffered an excruciatingly painful downhill struggle with multiple myeloma -- bone marrow cancer.

"Her bones would constantly break," he remembers. "I tried to lift her and broke her collarbone."

A pragmatic man with a low-key yet direct manner, he did what seemed to him sensible and right. In the months before her death in January 1981, he gave her three unapproved drugs, one of them the active chemical ingredient of marijuana, THC, to ease her way.

The act was characteristic for a man who is conservative yet willing to stick out his neck for what he believes. This quality led last November to his appointment as the first doctor to head the federal government's main health agency, the giant Department of Health and Human Services.

Interestingly, Bowen now oversees the body that approves therapeutic drugs, the Food and Drug Administration. It would "be a pleasure," he said in an interview recently, to make more drugs available in exceptional cases, although drug approvals have been speeded up greatly, he believes, in the past five Republican years.

He thought less of the drug approval process back in 1980 when his wife, Beth, was ill and, he said, "Every time she moved she broke ribs."

He gave her DMSO, a solvent and pain-killer banned by the FDA for most human uses. He got it from a state senator friend -- a veterinarian -- and it gave his wife some relief.

Also: "Her chemotherapy just made her retch and vomit. Imagine the pain -- with broken ribs."

Through an internist friend, he got some investigative THC -- in effect, marijuana capsules -- which "worked like magic" to reduce her nausea. He also gave her a French experimental drug that it was hoped might heal bones.

"She was ill for 3 1/2 years," he remembered. "She was totally bedfast the last five or six months. The drugs were not illegal, just unapproved then."

"Why can't a dying person with severe pain have easy access to DMSO?" he asked at a 1981 medical conference. "The only excuse I could find was that after prolonged use and heavy dosage it caused an occasional cataract in dogs only. The container said, 'For horses only.' " He and his wife "laughed about that, but it really wasn't funny."

Otis Bowen, 67, stocky, stolid, white-haired, square of face, square of shoulders, smiles a soft, ready smile.

An Indiana state legislator for 14 years, including two as minority leader and five as House speaker, governor of his state from 1973 to 1981 and its first two-term governor in this century, he still looks more like a small-town doctor than a powerful politician.

A small-town doctor is what he was for 30 years. "He's a personable, caring family physician, like everyone would hope his family doctor would be," says Linda Aiken, a sociologist and vice president of the Robert Wood Johnson Foundation, who served with him on the federal panel to salvage Medicare during President Reagan's first term.

Others call him "humble," "calm," "patient," "moderate," "caring," "concerned," a "fiscal conservative who's also compassionate" and, above all, "a pragmatist."

A friend called him "soft but hard," however, and James Carroll, Associated Press Indianapolis correspondent, recently wrote: "Despite his soft-spoken demeanor, 'Doc' earned a reputation as a shrewd politician who punished his enemies and rewarded his friends." A longtime associate who declined to be identified said, "As governor he kept two yellow pads. I referred to them as the bad guys and the good guys. The country doctor will teach them all a lesson in Washington."

"Running HHS is going to be one great big headache, but Doc Bowen will be able to handle it," said Sen. Dan Quayle (R-Ind.). It was Quayle who strongly told the White House Bowen should be appointed after the president strongly told HHS Secretary Margaret M. Heckler she should become ambassador to Ireland.

Bowen shakes his head at such accolades. Whatever his record, his mark as a Washington operator is still to be made. He is aware that most of the problems HHS deals with can at best be alleviated, not solved, in any short period. HHS deals with the entire health and welfare of the nation. Money to accomplish anything is in fervent demand.

"I'm afraid expectations will be too high," he said. But he intends to do all he can, he said, and try to do it in the way of a doctor.

Medicine, he has explained, taught him how to approach emergencies and problems with a certain calmness and common sense. "I have tried to approach the problems in government the same way I did in medicine," he said. "First, you have to find out what's wrong" -- make a diagnosis. "Second, find a plan of action" -- a treatment. "And, third, you have to apply it."

Pragmatism was the way of survival in his birthplace in Richland Center, Ind., a community too small to make the state highway map. "My father was a schoolteacher with five children. We'd live on the edge of town with a couple of acres where we put in a big truck patch in order to eat."

When he was 12 or 13 he began hiring himself out to farmers, helping them thresh and make hay. At the University of Indiana later, he earned his room and board by running his fraternity's dry cleaning and shoe repair concession.

Most people called him "Otie" or "Ote," names still used by very old friends. He remained an Indiana purebred, with medical school at the same university, an internship in South Bend, then family practice in Bremen (1980 pop. 3,500) just to the south.

He had an inquiring mind. When he wondered whether cancer victims wanted to know the truth in that day of fewer cures, he sent a questionnaire to 1,000 of his patients and got 477 replies. Ninety-six percent wanted the truth. He was "amazed" but not displeased. He, too, preferred truth.

A combination of pragmatism and idealism led him into politics. When his county needed a new coroner and the local MDs felt the job should be filled by a physician, he ran and won and served for four years. Then, finding a certain satisfaction in government, he ran successfully for the Indiana House of Representatives.

"Occasionally a patient will ask, 'Why do you want to get mixed up in politics?' " he once wrote in an article urging fellow doctors to join him. "The answer is, 'I'm a first-class citizen interested in good government the same as you are and instead of sitting on the sidelines complaining, I want to be where the action is . . .' "

He carried his medical bag to the legislature. "Whenever a member was ill," reports Dr. Allan Fischer of the Indiana University School of Medicine, "he was there with his black bag."

Perhaps not incidentally, he also gained a reputation among legislators as an affable colleague willing to see some sense on both sides of the aisle. He was a "compromiser" and "problem solver," "not a zealot," says a friend.

When he moved into the governor's chair in 1973, he set aside the black bag. He had run on a platform of tax cuts and "common sense," and he made the tax cuts.

He also attacked a significant health issue. Doctors were seeing what has since become a steady climb in malpractice insurance rates. In what he saw as a model law -- one still perhaps the nation's most sweeping -- he succeeded in 1975 in getting legislation that: created impartial panels to tell both sides in a potential suit whether or not there seemed to be true malpractice; limited the number of years in which a suit could be filed, limited lawyers' fees, and limited damage awards to $500,000 and that only for persons who needed permanent care; required doctors to be insured up to $100,000 and funded the rest of any award by a small surcharge on all malpractice premiums; mandated reporting all adverse verdicts to the state's medical licensers, who then determine whether a doctor is competent to practice.

How did he get so tough an act through when doctors in most states were -- and for the most part still are -- stymied by legislator-lawyers and the impressive argument that patients suffer if suits are too hard to file?

"I had been a legislator," he explains. "I had good relations on both sides of the aisle. I was a physician.

"But most important, we involved the people. We insisted that what we were trying to do was on their behalf. In several instances a solo practicing physician had a suit against him and -- maybe he was almost ready to retire -- he just closed up shop. People began to worry whether or not they'd have a doctor, and they essentially told their legislator, 'Don't come home until you fix the problem.' "

He also, as governor, vetoed a bill that would have legalized the supposed anti-cancer drug Laetrile. His tolerance of experimental medicines does not extend to false medicines. "It would have legitimized the use of a drug that investigators had shown had no value," he said. "It would also have legislated a method of treatment when treatment should be a medical decision."

He was, he concedes, not an inspiring political speaker. "The only way to stay awake through an Otis Bowen speech is to give it," he once said. But he was called a "master of persuasion" with individuals or small groups.

"People did not think of him as a politician," said Floyd Fithian, former Democratic congressman from Indiana, now chief of staff for Sen. Paul Simon (D-Ill.). "They thought of him as a doctor or a friend. But he was probably this state's shrewdest, toughest politician."

Another longtime Indiana political operative said: "He's a combination of Santa Claus, the Easter Bunny and the Pillsbury Doughboy, and he's Teflon-coated. But he was probably as political a governor as anyone who ever got there."

He became the first governor to serve simultaneously as chairman of the National Governors Association, the Republican Governors Association and the Midwest Governors Association.

He was urged by Republican party leaders to challenge Democratic Sen. Birch Bayh in 1980 but declined. He chose instead to become professor of family medicine, and once again a practicing doctor, at his state medical school. His nearly five years in that job were interrupted, however, by continued calls for public service.

First as governor, then as a professor, he served three presidents: Ford as a member of commissions on federal paperwork, intergovernmental relations and science and technology, Carter as an adviser on energy and Reagan as a member of an advisory council on federalism, then the chairmanship for two years of the important Advisory Council on Social Security.

That bipartisan body, the "Bowen commission," responded to the threat of future Medicare insolvency by recommending, among other steps, a raise in the future Medicare eligibility age to 67 and a tax on employer-paid health benefits.

"There were no palatable solutions," he said. But "we supported those ideas that we disliked the least." He has also said: "If we want Medicare to survive at all, everyone's going to have to swallow some awfully bitter pills."

The approach is typical. He has said throughout his life that he fears government over-regulation and the demise of the independent, fee-for-service physician. Yet he becomes HHS chief at a time when medicine is increasingly being practiced by large, competing organizations. The government is regulating Medicare payments to hospitals. HHS officials, pre-Bowen, have been saying that they see "capitation" -- paying doctors so much a head per patient per year rather than paying a fee for each service -- as a next step in controlling health costs.

Bowen agrees. Long an American Medical Association member, he told an AMA conference in plain language this January that "eventually capitation in some form will be the ultimate" payment method. He sees some "interim" measures -- action, for example, to prevent one doctor being paid five times as much as another for the same procedure. But he sees increasing motion toward "competition and capitation" as "a price we must pay" to lasso costs.

Anyone but a conservative doctor and lifelong AMA member might have been tarred and feathered for giving the AMA this news. "It matters not what I feel about these things," Bowen insists. "That's the direction in which we're going. And I think this is probably as fair a system as we can develop."

When the Reagan administration decided to dispatch Heckler to Ireland last year, and summoned Bowen, he made a list of "27 or 28" problems he wanted to attack. But he also realized that he had to settle on about a half dozen priorities, which he warns against regarding in any special order:

*Fostering competition and capitation of medical payments in as fair and orderly a way as possible.

*Combining federal and private action to cover the now uncovered costs of catastrophic illnesses and long-term care for those over 65 -- and finding ways to increase coverage of these problems for everyone.

*Finding new ways to pay for care of the indigent and the uninsured.

*Backing federal action to prompt states to reform their medical liability as well as their entire liability payment systems.

*Improving the health of newborns by persuading expectant mothers not to smoke or drink, by curbing teen-age pregnancy and, above all, by "strengthening the family."

If any priority is in fact his true No. 1, it seems to be this: getting to the root causes of excess infant mortality by helping rebuild solid families. How? By "stimulating parents, community leaders, teachers and preachers" to "change attitudes," he said, by getting people to "think about morality," by "reducing the emphasis in all media on sex, violence and pornography" and by "emphasizing the responsibility of the young," including young men, to "think beforehand if they can't take care of a family," rather than thinking "that having a baby at 14 is great."

He knows this is "a tall order." He knows it involves attacking poverty, too.

But he sees doing something about the problem of too many weak, underweight babies with poor prospects for life or normal development as a realistically "possible" start. "I'd like to have an impact on that in the time that I'm here," he said.

If he can indeed have any major impact on even a few of his priorities, he will be one of only a small number of secretaries of the agency to make a great impact.

His ideals have already run into Washington reality.

His confirmation hearings were friendly but not without some sharp questions and some answers that aroused opposition from some quarters, perhaps more from the right than the left.

He supported federal financial support of family planning for low- or modest-income persons. He said he opposed abortion but would permit it when the mother was in danger or the pregnancy resulted from rape or incest.

He also said, "As a father, personally, I would like to know [if a daughter seeks contraception], but as a practical man and a physician I believe that unwanted pregnancies can be prevented by sexually active teen-agers obtaining family planning services if necessary without notifying their parents."

Sen. Edward M. Kennedy (D-Mass.) attacked the Bowen Social Security commission's suggestion that Medicare eligiblity begin at 67. Bowen said "no emergency" now requires this, but "I couldn't say we would never need to do it."

Still, he was confirmed by a 93-2 Senate vote and, a fact that disturbs some on the right, won almost as many commendations from Democrats as from Republicans. Democrats view him as a Reagan loyalist, which, like it or not, they expect, but also his own man and not an idealogue. Joseph Califano Jr., Carter secretary of what was then called Health, Education and Welfare, calls him "open" and "unusual," someone who "listens."

In contrast, Stuart Butler, director of domestic policy studies at the conservative Heritage Foundation, saw his plans for catastrophic insurance as an unwelcome "massive expansion of the Medicare system." This is not what Bowen says he intends. He thinks combined federal and private means -- possibly a new premium for Medicare eligibles, possibly new "medical IRAs" to encourage saving for future care -- could suffice without an increase in federal spending. This may or may not be realistic. Some critics doubt it.

He was sworn in on Dec. 13. The same day he got an unwelcome welcome: several severe cutbacks by the White House's powerful Office of Management and Budget in his department's fiscal 1987 budget proposals. There were major cuts for Medicare, the National Institutes of Health, AIDS and other programs, including some of his "priorities."

Bowen wrote a sharp letter to OMB Director James Miller III, protesting OMB "micro-management" of HHS. He then went to the mat with OMB and, as arbiter, White House Chief of Staff Donald Regan. He won back only some compromises on an OMB plan to cut Medicare payments to hospitals for future buildings, renovations or medical equipment.

Bowen maintains: "I think the disagreement was overstated a little. We had a little disagreement on a couple of things. But we have now created a good line of communication with OMB. I do get my input."

He also said the AIDS allotment should be adequate, a statement likely to be disputed by many scientists and AIDS victims.

An ambitious proposal to provide catastrophic coverage for Medicare patients ran into a blitzkrieg from commercial insurors, who already sell profitable "Medigap" insurance to those who can afford it. In response, the president ordered Bowen to conduct a broad preliminary study of the problem and ways both government and private interests could participate -- a goal which Bowen says he favors.

Still, this is another area, he emphasizes, in which he would like to have an impact, because "I've seen too many individuals who have had to spend themselves down to the Medicaid level to get adequate medical care. It's a great blow to one's pride to feel you have to be dependent on someone else for your very existence."

One thing Bowen-watchers inside and outside HHS agree on: he has won White House cooperation in starting to fill several long-unfilled top positions. He has also created a new Family Support Administration to tie together several HHS components and perhaps add others to help rebuild the family.

"The Heckler period was a disaster," one HHS official maintained. "Nothing got done. Now things are happening again."

Some observers give Heckler better marks. She was a poor administrator, they admit, but an equal problem, they say, was lack of cooperation by White House officials, irritated because she fought them on some issues.

However tough -- or impossible -- the problems ahead, Bowen intends to keep using his medical experience. Calling on his decades as a family doctor, he has began making weekly, 60-second "Housecalls," recorded messages available to all radio stations on subjects he considers important to health.

"Hello," one typically starts. "This is Doc Bowen. I have a message for you if you're pregnant, considering pregnancy or know anyone who's planning to have a child . . . If you're pregnant and have been drinking during your pregnancy, it's important to stop now."

"Housecalls." Social Security. Food and drugs. Medical care. Health costs. Doctors. Patients. AIDS. NIH. Welfare. The family. He ticks off the problems.

"Well," he recently told some AMA colleagues, "so much for golf on Wednesdays."