Clinton Plan: Made for Compromise : Health: Congress to open months of hearings today. The proposal merges conflicting theories of how best to deliver medical care.

When President Clinton unveiled his health care reform proposal last week, it was portrayed by the Administration primarily as a blueprint for social and economic change--a new vision for revamping the medical delivery system.

But starting today, as Congress opens months of hearings on health care reform, that very same plan also will be recognized for the political document that it truly is--a carefully drawn road map for compromise between conflicting special interests that have long stood in the way of health care reform.

“President Clinton has very, very artfully crafted a proposal designed to minimize the differences,” observed GOP political analyst Douglas Bailey. “By basing it on broad principles and leaving the details to others, he has made it seem all the more reasonable.”

Moreover, by seizing the middle ground on key provisions, Clinton hopes to force opponents into the politically difficult position of seeming to advocate extreme positions. Liberal critics of his reliance on private-sector insurance, for example, face the uphill task of selling their “single-payer,” or government-run, approach to a public already skeptical of bigger government.

Indeed, on virtually every controversial topic from abortion to malpractice, Clinton’s plan either charts a political middle ground or glosses over the details in such a way as to cast both sides in the struggle as extremists.

As such, the plan is characteristic of Clinton’s style of governing--a style that so far has won him both praise and condemnation in Congress.

While some Democrats think that Clinton is too quick to back away from principle, his instinct for the middle ground clearly pleases those who grew weary of the unyielding, ideological approach to government Ronald Reagan brought with him to the White House 13 years ago.

First Lady Hillary Rodham Clinton, who spearheaded the drafting of the President’s plan, will be the first to testify at today’s hearings before the House Ways and Means and Energy and Commerce committees. These and other committees are set to conduct hearings on health care well into next year before they draft legislation.

Clinton’s proposal is certain to be altered substantially under lobbying pressure on Capitol Hill. “None of this will hold up in Congress,” said Bailey. “We’re going to see Washington at its worst--the special interests will really take over.”

But by drafting a plan that looks conciliatory at the outset, Bailey noted, the President is in a position to criticize Congress whenever it yields--as it inevitably will--to special interest pressure to alter the proposal in ways that might be unacceptable to consumers.

Compromise is the essence of the Clinton plan, which is fundamentally a hybrid of two conflicting proposals--the so-called managed-competition model favored by Republicans and conservative Democrats and the Canadian-style national health insurance system that liberal Democrats like.

“It marries two seemingly conflicting theories--a market approach and a regulatory approach,” said Linda Lipson, health care specialist at Consumers Union.

By promising to give all Americans a choice of three or more competing health insurance plans, the Clinton proposal tries to please those who want to harness free market forces to drive down costs.

At the same time, by permitting every state to establish a completely government-run insurance scheme, if they want to do so, the President gives liberals reason to hope that one successful state experiment will grow into a national system, as happened in Canada.

Likewise, on virtually every important issue within the plan, Clinton makes concessions to competing views. This is what Sen. John B. Breaux (D-La.) has described as “the gumbo approach--where you put in a little of everything and stir it up and hope it comes out well.’

Clinton’s effort to resolve the age-old dispute over medical malpractice between physicians and trial lawyers is--as Lipson described it--”the best example of Clinton trying to cut it down the middle.” The proposal, which favors neither the physicians nor the lawyers, provides some things each side wanted.

Historically, doctors have demanded limits on malpractice settlements that lawyers and consumers have resisted. The Clinton plan would limit fees for plaintiffs’ attorneys, impose a mandatory system of alternative dispute resolution and authorize the government to keep a public registry of doctors with a record of malpractice offenses.

Yet while this proposal offers something for doctors, lawyers and consumers, it satisfies none of them. The American Medical Assn., the Trial Lawyers Assn. and many consumer groups all have criticized the malpractice plan.

Lipson, herself a critic of the malpractice proposal, sees the responses of these groups as an object lesson for Clinton. “Everybody is going to hate it a lot or a little; I think it’s hard to pass legislation that way,” she said.

Clinton’s proposal contains dozens of other compromises, all of them designed to appeal to particular constituencies. Among them:

* Because some big corporations objected to being forced to join with others in a single regional health insurance purchasing group, the Administration agreed to exempt those companies with 5,000 or more employees. To opt out of the system, however, they will be required to pay a penalty equivalent to 1% of payroll.

* Because organized labor objected to the idea of taxing benefits that exceeded the minimum standard package, the Administration decided that all benefits in existence as of last Jan. 1 would be exempt from taxes, as long as the employer registers for an exemption with the Internal Revenue Service.

* Because doctors objected to many elements of the plan--especially the malpractice proposal--the Administration added loans and antitrust exemptions that would make it easier for physicians to form their own managed-care networks to compete with the insurance companies. This would satisfy their complaint that insurers are intruding in the patient-doctor relationship.

* Because the elderly objected to the Administration’s plan to finance reform, in part, by trimming expenditures for Medicare, the White House added sweeteners for Medicare beneficiaries, including drug benefits and some long-term care proposals. In addition, Clinton dropped the idea of merging the Medicare system with the insurance system for everyone else, a plan senior citizens’ groups opposed.

* Because small business owners have objected vociferously to being required to provide insurance for their workers, Clinton has offered subsidies to firms that cannot afford to pay for these benefits.

But nowhere is the President’s readiness to compromise more obvious than on one of the most emotional health care issues ever to face Congress: abortion. Clinton has proposed that private plans continue to cover abortion services but he would also permit providers who opposed abortion to refuse to perform them.

Moreover, Ira Magaziner, senior White House adviser for policy development, has indicated that, while Clinton favors abortion rights, he is open to any reasonable proposal upon which members of Congress can agree.

Such a willingness to compromise on the part of Clinton’s health care advisers has only encouraged special interest groups to intensify their lobbying in Congress.

Lobbyists for the doctors, lawyers, insurers, small businesses and other special interests were further encouraged to learn that at least 16 congressional committees and subcommittees are claiming jurisdiction over elements of the health reform proposal, giving every interest group more than one opportunity to argue its case.

Mrs. Clinton will get a taste of these jurisdictional disputes this week when she is called to testify before five separate committees in the House and Senate.

While Republicans have proposed several alternative plans, no one in Congress is yet willing to predict whether special interests will defeat the compromises struck by the President or whether--in the end--his plan will provide an acceptable middle ground.