Jon Cohn's post on Clinton's health care plan is essential. I can't think of any lesson so misremembered, warped, opportunistically used, and wrongly interpreted as the one Democrats have drawn from that battle. In it, the special interests whom the plan was designed to win over (big business and the insurance industry) sat out and the Democratic constituencies (labor, liberals) who needed to play ball walked off the field. But this isn't, as many Democrats seem to think, an inevitable outcome of health care reform, it's a lesson on what happens if you assume good intentions where none exist.
Business wasn't ready to help, the insurance industry didn't want to help, labor was pissed off about other things, and liberals wanted single-payer. Worse, Whitewater hit, [House Ways and Means Chairman] Dan Rostenowski was defeated, and Senate leader George Mitchell retired, throwing Democratic politics into disarray. Clinton's strategy of preemptively vetoing anything that didn't provide universal coverage was monumentally stupid, as was writing the plan himself (Presidents can't introduce plans, Congress has to write them. And by creating such a specific, coherent document, Clinton created a lot of congressional opposition that might not have existed if they could've worked out their own policy that conformed to Clinton's principles). It was bad strategy coupled with bad circumstances compounded by the inexperience of a young administration. It's a lesson, not a prophecy.
Anyway, Cohn's post on it is a must-read, so read it.