All Sides Take Aim at Clinton Health Plan : Legislation: While President fine-tunes proposals to gain wide appeal, most groups withhold support. It is due to be unveiled Sept. 22.

Even though President Clinton has fine-tuned his health care reform proposal to have the broadest possible appeal, most groups representing doctors, hospitals, insurers, employers, drug manufacturers and other affected interests are withholding their support.

Due to be unveiled officially by the President on Sept. 22, the proposal is the result of a nine-month effort by Clinton’s advisers to strike a delicate political balance between the interests of liberals and conservatives, consumers and providers, Republicans and Democrats.

Designed to please everyone, the President’s plan satisfies almost no one. Even as details were being worked out at the White House over the weekend, leaders of many interest groups are denouncing key provisions.

The plan is neither a Canadian-style system of socialized medicine nor a pure free-market approach but seeks to combine elements of the two. It borrows heavily from the so-called “managed competition” model favored by conservatives, but it includes a strong element of government regulation sought by liberals and consumer groups.

In an effort to make the plan more acceptable, Clinton recently abandoned some of the most controversial ideas contained in earlier drafts, such as price controls. Yet few interest groups are satisfied.

The American Medical Assn. fears the plan does not do enough to combat malpractice suits. The American Hospital Assn. and the American Assn. of Retired Persons worry about proposed cuts in Medicare.

The Federation of Independent Business, representing small businesses, refuses to embrace the plan because it requires all employers to provide health insurance to their workers. And many big companies are concerned that under the plan, they would lose control of their health care costs.

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Likewise, the Health Insurance Assn. of America and many of the nation’s big insurance companies are balking at the President’s plan to limit increases in the premiums they charge for coverage. And the Pharmaceutical Manufacturers Assn., while pleased by Clinton’s decision to rule out price controls, fears that the Administration plans to limit prices indirectly.

Even the standard package of benefits outlined in Clinton’s plan, which emphasizes preventive care, is drawing fire from many lobbying groups. Predictably, abortion benefits are the most controversial item, but many consumer groups argue that the mental health coverage is too skimpy.

The most widely shared criticism by interest groups is that the plan does not appear to contain sufficient funding to provide coverage for the estimated 37 million Americans who currently lack health insurance. “Where will all the extra billions come from?” one lobbyist asked.

Health reform advisers have not yet determined the total cost of the plan, although it is expected to reach $50 billion to $70 billion a year. Shying away from any new, broad-based tax, Clinton hopes to fund the program entirely with employer payments and individual premiums, a modest new tax on cigarettes and liquor and more cuts in Medicare spending.

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In addition, many critics complain that by empowering states to create so-called “health purchasing alliances,” or powerful bureaucracies that would buy insurance for most citizens, the President is veering too close to the Canadian “single payer” health care model, under which the government serves as a direct intermediary in health care, collecting taxes and paying doctors.

“He is really setting up a single-payer system in disguise,” said Rick Pollack, executive vice president for the American Hospital Assn.

This view apparently is shared by consumer groups that favor a Canadian-style system, such as Families USA and Consumers Union, which are expected to be among the strongest supporters of the Clinton plan.

But to most interest groups, the proposal is seen as little more than the opening bell in a long legislative battle over health care reform. Lobbyists for these organizations are already looking for sympathetic members of Congress to amend the legislation to make it more to their liking.

Some Republicans, such as Sen. John H. Chaffee of Rhode Island, are known to be drafting a full-blown alternative proposal, and a few Democrats who disagree with the President’s approach are expected to do the same.

As a result, no one expects the final legislation to hew closely to the plan Clinton has drafted. “We’re going to take the President’s proposal and work with it,” explained Rep. Henry A. Waxman (D-Los Angeles), chairman of the House health and environment subcommittee.

While few--if any--interested groups disagree with the President’s goal of providing universal health insurance coverage, there is no agreement on how it should be accomplished.

Clinton’s plan to require all employers to provide coverage runs counter to the free-market views of many business leaders. Businesses would pay at least 80% of each worker’s premiums, with the employees paying the rest. But employer contributions would be limited to 7.5% to 8.5% of payrolls for large firms and 3.5% or more for small firms, while workers would be asked to pay 1.9% or more of their wages.

Even though Clinton recently pledged that the government would subsidize insurance for low-wage workers and small businesses, the National Federation of Independent Business, which has 500,000 members, remains unalterably opposed. The federation believes that the employer mandate would force many small businesses that cannot afford insurance to shut down or lay off workers.

To the larger employers, most of whom already provide their employees with health insurance, the Clinton plan also looks like a risky bargain.

“Big companies are mildly positive and skeptical at the same time,” a Washington lobbyist for several corporations said. “We feel we have a good package of benefits and we’re starting to get a handle on costs. . . . If the President’s plan lets us do that, we will welcome it. But if it means the government sets all the rules, and we just provide the cash, we don’t like it. We need to preserve our autonomy.”

In response to this criticism, Clinton decided that companies with more than 5,000 workers would not be forced to join health purchasing alliances but could continue to cut their own deals with insurers. Still, many large companies fear that if the plan is underfunded, they will eventually be called upon to underwrite more of the costs.

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While insurance companies would continue to play a big role in the nation’s health delivery system under Clinton’s plan, they are upset that it would give the health purchasing alliances a virtual monopoly over insurance purchases for most Americans. They also object to proposed limits on premium increases.

Charles N. Kahn III, executive vice president of the Health Insurance Assn. of America, argued that the President must cure the underlying problems that are fueling health care costs instead of simply trying to limit premiums. “In effect,” he said, “arbitrary premium caps are a cost-containment cop-out.”

Drug manufacturers, doctors and hospital administrators breathed easier after Clinton announced that he had rejected the idea of price controls. But officials of the Pharmaceutical Manufacturers Assn. said their members fear the Administration wants to authorize government agencies to prohibit sale of certain drugs judged to be overpriced.

In addition, the pharmaceutical industry was stunned by First Lady Hillary Rodham Clinton’s suggestion that the government might require drug companies to offer the same price to all purchasers. Many drugs manufactured in the United States are sold overseas for less than the domestic price.

“It is our sincere hope that the final version of the Clinton plan will not advocate either direct or indirect government price regulation,” said PMA spokesman Jeffrey Trewhitt.

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As for the doctors, whose support for the plan is viewed as essential by the Administration, they are still nervous that Clinton will not keep his pledge to cut down on malpractice claims. Recently, the President rejected a controversial idea known as “enterprise liability,” under which the employers of doctors, not the individual physicians themselves, would be liable. Clinton has not said what he will offer in its place.

The President’s health care advisers are trying to decide “whether they want to take on the doctors or the lawyers,” said James S. Todd, executive vice president of the American Medical Assn.

Medicare cuts will certainly limit support among the elderly for Clinton’s plan, even though he has promised he will use the savings from health care reform to finance prescriptions and long-term care for senior citizens. Hospitals that depend on Medicare funding are also wary.

Peter Ashkenaz, spokesman for the American Assn. of Retired Persons, said the Medicare program that provides health benefits for the elderly already has endured enough cutbacks. “Medicare is not a piggy bank to keep running to, to fund everything,” he said.

Times staff writer Robert A. Rosenblatt contributed to this story.