Clinton Calls on Hospitals to Back Health Plan : Reform: He tries to blunt criticism of his proposal. He says rival plans fail to address the inefficiencies of the current system.

President Clinton, trying to head off criticism of his health plan’s complexity, declared Tuesday that insurance rules have made the current system a bureaucratic nightmare that “in his wildest dreams, Rube Goldberg never could have designed.”

Appearing before separate meetings of governors and hospital officials, Clinton made his most specific criticism yet of rival plans offered by Rep. Jim Cooper (D-Tenn.) and Sen. John H. Chafee (R-R. I.). And as he tried to rally hospitals to his cause, he scolded members of Congress for not bothering to study his plan closely or to examine his adversaries’ proposals.

“The biggest thing you need to do,” he told members of the American Assn. of Hospitals, “is to make sure the people in Congress know how the system works and what these various approaches would do if they were passed.”

Clinton’s forceful language came amid a flurry of critical new industry-sponsored TV commercials and congressional appeals for compromise on health reform. In his comments on the system’s complexities, he was responding to complaints that have received new prominence since Senate Minority Leader Bob Dole (R-Kan.), answering Clinton’s State of the Union Address, brandished a flow-chart with a diagram of the Administration’s proposed health bureaucracy.

But Clinton tried to signal that he remains open to negotiation. At the session with the National Governors’ Assn., Clinton spoke of the need to forge a consensus. Later in the day, he even praised Dole for conciliatory comments that the Republican had made at the meeting with the governors.

Through its paperwork requirements, the insurance industry has created a system in which “it is impossible for hospitals to do their jobs,” Clinton said. “No other country in the world is burdened with it and we should not tolerate it any longer.”

He said that the system enables insurance companies to “slam the door on anybody who isn’t healthy enough to get covered.” That system, he said, is “irrelevant to the fact that we have the highest quality care in the world.”

Without mentioning them by name, Clinton criticized the Cooper and Chafee alternatives for proposing to begin taxing health benefits without taking steps to correct the inefficiencies of the existing system.

Citing the 20-year stagnation of American wages, Clinton asked: “Why take something away from hard-working people before you squeeze the system and its unconscionable burdens on hospitals, doctors, nurses and the American people themselves?”

Cooper’s bill would prohibit employers from taking tax deductions on benefits to workers above a specified level. Chafee’s measure, in contrast, would impose the new tax burden on employees, not employers.

In his appeal to the hospital administrators, Clinton sought to mobilize a powerful group that has been split on health reform but could become an important counterweight to the insurance and drug industries.

“I implore you to take this debate to Congress, get beyond the rhetoric, get beyond the ideology,” he said.

Chiding lawmakers, he quoted an unidentified member of Congress lamenting that “I have no idea how to get my colleagues in the Congress to take this issue seriously and spend all the time it would take to absorb it all.”

Clinton took up again the question of whether health care is in crisis, as reform advocates have argued, or is only faced with problems, as some Republicans have maintained.

Clinton called the matter a “big linguistic battle.”

He cited what he said are signs of a crisis: a steadily rising number of uninsured, small business insurance premiums that average 35% higher than those of larger institutions, uncompensated hospital health care expenses that have grown to at least $25 billion annually, exploding costs of the Medicaid health program for the poor and rules that set lifetime limits on 75% of insurance policies.

Clinton, whose plan has been criticized as a threat to jobs, tried to turn the tables with an anecdote about a South Carolina woman whose small business was threatened by the current health system. The woman, suffering from diabetes and arthritis, had seen her insurance rates rise to $305 a month, though she took home only $205 a week.

Her doctors told her to give up her business and go on disability but, calling herself a “proud American,” she resisted the idea. “I think we should heed her call for help,” Clinton said.

Although he has signaled his willingness to compromise on most points, Clinton warned against any move toward incremental reform.

“We have to do it now,” he told the hospital executives. “And what we have to do includes providing guaranteed private insurance to every single American.”

“What normally happens around here is that everybody gives their speeches and then we have Washington-style reform where we tinker at the edges. . . . That’s what we’ve been doing for years,” he told the governors.

But unless all are covered, he said, inequities will remain for the states, for the hospitals and for individual Americans.

Times staff writers Edwin Chen and Karen Tumulty contributed to this story.