Key Economist Flays Clinton Health Plan : Medicine: In speech to insurance group, Stanford professor calls for President to abandon price controls. He says draft reforms won’t work.

President Clinton’s beleaguered health reform plan took another hit Wednesday, this time from the Stanford University health economist credited as an intellectual father of health purchasing alliances--a centerpiece of the President’s proposal.

In a speech in New York, Prof. Alain C. Enthoven said that Clinton’s plan is unworkable and should be rewritten. He specifically called for the President to abandon price controls--a reference to the proposal to cap the rate of growth of insurance premiums.

“Price controls don’t and won’t work, and therefore the first thing Congress should do is delete pages one through 1,342 of Clinton’s 1,342-page bill,” Enthoven said in a speech before the American Insurance Assn.

Enthoven’s criticism of the Clinton agenda is not surprising. The co-founder of an influential, free-market oriented club of health economists known as the Jackson Hole Group, Enthoven was consulted in connection with the Clinton plan but was not a major player in the development of it. He became increasingly vocal in his opposition to the proposal through 1993, both in speeches and in his writings.

Ironically, the other principal architect of managed competition--Richard Kronick, on leave from UC San Diego--was a key participant in the health care task force and serves as a senior Administration health policy adviser.

Enthoven and Kronick came up with the notion of creating a nationwide system of purchasing cooperatives that pooled consumers into networks to buy health insurance at lower, group rates.

But the White House Health Care Reform Task Force, under the direction of First Lady Hillary Rodham Clinton, has added numerous other elements to that concept. Among them is a government mandate requiring all employers to pay at least 80% of the cost of the health insurance premiums for all full-time workers.

Kronick on Wednesday disputed Enthoven’s characterization of the insurance premium caps. “We don’t have price controls the way they are normally thought of,” Kronick said. The main (price control) mechanism is creating a competitive market that works. The cap on the rate of growth of premiums is only a backup mechanism, an emergency brake.”

Since its introduction last fall, Clinton’s health reform plan has been roundly criticized by many major interest groups unhappy with some element or other. Such attacks have largely gone unanswered while the President has been distracted by other issues and controversies, much to the dismay of many Administration health analysts and backers of the Clinton plan.

Many leading Republicans in Congress seem to have hardened in their opposition to the President’s plan and even some key Democrats have begun expressing skepticism about the plan’s ambitious nature.

The debate over health care reform is expected to heat up sharply later this month when the President delivers his State of the Union speech and Congress returns to begin the task of overhauling the health care system.