Reaction to Bush Health Plan Mixed : * Medicine: Hospitals and doctors oppose the voucher and tax credit system, but small businesses and HMOs like it.

California hospitals, doctors and many large employers on Thursday gave a strong thumbs down to President Bush’s health care proposal, while small businesses and health maintenance organizations said it was a good plan.

But Wall Street gave it a yawn, indicating that the $740-billion health care industry does not expect significant change from either the Republicans or Democrats in the immediate future. Trading in health care stocks, from hospitals to pharmaceuticals to HMOs, showed little reaction to Bush’s proposal.

“The prevailing wisdom is that this debate will result in more jawboning than legislation,” said Randall Huyser, an analyst with Furman Selz.

Hospital officials took a dim view of Bush’s health proposal, saying its lack of an adequate financing mechanism will lead to more hospital bankruptcies and emergency-room closures. Many large employers in California complained that it would increase the burden of health care costs on employers that already provide insurance for their workers.

“The bottom line is the Administration proposal will shift more costs to employers who already provide insurance and are also paying for care for the uninsured. The plan does nothing to slow the rapid increase of health care costs,” said Jacque Sokolov, medical director of Southern California Edison.

There is no consensus on how the proposal would affect California. “It’s consistent with Gov. Wilson’s efforts to make insurance available to the working poor,” said Kassy Perry, a spokeswoman for California’s Health and Welfare Agency, which welcomed the plan.

But some critics say the peculiarities of California’s health care situation make Bush’s proposed remedies, which they say seem based on East Coast and Midwestern conditions, inadequate.

California already is far ahead of most of the nation in its high membership in HMOs and other “managed care” organizations that attempt to control costs. So Bush’s encouragement of people to join HMOs might do less to improve California’s situation than other states’, the critics argue.

On the other hand, California is among the states with the highest proportion of uninsured residents. Many of these Californians would find the vouchers and tax credits offered by the Bush plan inadequate, experts say.

Insurance Commissioner John Garamendi called the Bush plan “terrible . . . awful.”

“The health care system is badly broken and needs serious surgery. This offers a Band-Aid that won’t even stick,” said Garamendi, who is planning to announce his own health insurance reform plan next week.

David Langness, spokesman for the Hospital Council of Southern California, gave the proposal “a big raspberry.” He said the maximum $3,750 credit, or $312.50 a month for a family of three or more, was not enough to buy individual insurance policies. Group HMO policies average $530 a month, Langness said. And the individual indemnity plans that are often the only type available to the working poor cost hundreds more, he said.

Langness said that, because the plan would cut increases in Medicaid and Medicare payments, California hospitals would end up doing more uncompensated care, which totaled $3.6 billion statewide in 1990.

Cutbacks in Medi-Cal and Medicare payments have already contributed to the closing of 18 hospitals in Southern California in the past two years and the closure of 11 trauma centers and at least 10 emergency rooms in the region since 1987.

Doctors were also critical of Bush’s plan. “I don’t think it’s comprehensive enough to face what the problems are,” said Dr. Richard Wigod, president of the Los Angeles County Medical Assn.

The National Federation of Independent Businesses has criticized a plan proposed by the California Medical Assn. requiring employers to provide insurance, saying its members cannot afford the high cost of health insurance. The federation says it likes the Bush plan because it will not require employers to provide insurance, though it would improve access to insurance for people who cannot get insurance on the job.

* MAIN STORY: A1