President Carter's 18-month effort to construct a comprehensive health policy that would control skyrocketing medical costs and provide Americans with national health insurance is in new trouble on several fronts.
Legislation to control hospital costs floundered again yesterday in the House Commerce Committee and hit new snags in a Senate Finance subcommittee.
At the same time, Carter's advisers are pressing him for a decision within the next week on national health insurance, with his economic advisers urging him to reject a comprehensive package in favor of a more limited, and, they say, less inflationary proposal.
A leading health newsletter, the McGraw-Hill Washington Report on Medicine & Health, said this week that Vice President Mondale had joined with James McIntyre, director of the Office of Management and Budget, and others in arguing that the country cannot afford even a promise to start broad national health insurance in three or four years.
Mondale yesterday denied the report, but said he is working to fit health insurance "into the budget, consistent with other national aspirations."
An administration source said that a "solid phalanx of economic advisers," including McIntyre, Council of Economic Adviser Chairman Charles L. Schultz, Treasury Secretary W. Michael Blumenthal, and chief inflation counselor Robert S. Strauss, are arguing for a "targeted" health insurance plan and said that "Proposition 13 gave them new steam."
Health, Education and Welfare Secretary Joseph A. Califano Jr. and Carter's chief domestic adviser, Stuart E. Eizenstat, urging Carter to approve a "comprehensive" health plan, even if it must be phased in, step by step. But McIntyre said "they had to heed the lesson of Proposition 13."
Only Califano, Eizenstat and presidential health adviser Peter Bourne, among Carter's top advisers, are pushing strongly for comprehensive health insurance. "If Mondale's doing anything," the administration source said, "he's staying in the background and saying they need to fulfill the president's promises without creating a revolt among the economic advisers. And this is practically impossible."
The president's problem is that if he satisfies the economic advisers he will anger the United Auto Workers, the AFL-CIO and the main congressional supporter of broad health insurance Sen. Edward M. Kennedy (D-Mass.), who has supported Carter on a range of policies.
Schultze said in a blunt May 2 memo to Califano that "it is unrealistic at this time to propose a package which mandates universal and comprehensive" health insurance, and such insurance is "relatively low on the list of immediate national needs."
He said the government should use general tax dollars to finance "modest increased federal outlays for the poor and for catastrophic coverage," that is, coverage of all citizens' huge health bills, beyond normal insurance.
Califano has sent the president both a May 22 memorandum and a detailed follow-up presenting various options. He has argued privately that Carter should make up his mind quickly, announce a much-postponed set of health insurance "principles," and then send Congress a specific plan so Kennedy can begin hearings in late summer.
"But everything is still up in the air," a White House official said. "Everything is still open and volatile."
In the House Commerce Committee, Rep. David A. Stockman (R-Mich.) unexpectedly won a 21-to-20 vote to amend - his opponents said "cripple" - a modified administration hospital cost control bill.
The bill would give hospitals two years to try to control costs themselves, but trigger mandatory federal controls if they fail. The Stockman amendment would let them add the full cost of every added admission over past years. HEW legislative representative Grant Spaeth said this would "encourage hospital administrators to make money by increasing their admissions."
Stockman won by gaining the vote of Rep. Tim Lee Carter (R-Ky.), who had mainly backed the administration before. A doctor, Carter said he was angry at previous amendments to exempt non-supervisory labor but "not other employes" from controls, angry at the administration's attitude about "certain professionals" - obviously including doctors - and angry at "unusual wheeling and dealing." He made it clear that he referred to a deal by which the White House helped Rep. James J. Florio (D-N.J.) win a go-ahead for a Camden, N.J., veterans' hospital in return for Florio's vote for the hospital cost bill.
In the Senate Finance Committee, both Republicans and Democrats raised objections to an incentive-and-penalty type of hospital cost control bill proposed by Sen. Herman E. Talmadge (D-Ga.). Staff members of Talmadge's health subcommittee early this week predicted quick committee approval. But some observers yesterday predicted that there will be a fight there, too.