Business gives thumbs-down to Clinton health plan

AMERICAN big business has inflicted a serious defeat on President Bill Clinton by rejecting his health plan and endorsing a rival scheme. A vote by 200 top business leaders, in the face of heavy lobbying by Mr Clinton and his wife, Hillary, is a victory for the health care and insurance companies that are seeking to gut Mr Clinton's proposals.

In addition, the US Chamber of Commerce, representing 215,000 smaller companies, also came out against the Clinton plan yesterday.

The Business Roundtable, which represents some of the largest companies in the country, gave its support to a plan sponsored by Democratic Congressman Jim Cooper which does not guarantee universal insurance coverage. A worried White House adviser said: 'If you lose big business now it becomes acceptable for other groups with problems to bolt.'

The White House had lobbied hard to prevent the vote, which it fears will give momentum to the Cooper plan - more pro-business than the administration's proposals - as an alternative to Mr Clinton's scheme. The Cooper scheme would not rely on employers to pay for workers' coverage and would drop limits on insurance premiums.

In recent days the administration's plan for the radical reform of American health care, which absorbs one out of every seven dollars spent in the country, has come under increasing attack. The Republican leader, Senator Bob Dole, adopting the line of the right of his party, says there is no health care crisis in the US, though he admits there are health care problems.

Other Republicans believe that by underplaying health reform Senator Dole may damage the party. A USA Today/CNN/Gallup poll this week shows that 57 per cent agree there is a health crisis compared to 42 per cent who say there are problems. Guaranteed health care for everyone, the heart of Mr Clinton's plan, is supported by 79 per cent of Americans and his proposals by 57 per cent. Health and crime are the two most important issues facing the country, well ahead of the economy and unemployment.

Mr Clinton himself seemed to back away from key elements in his health care proposals over the week-end by suggesting that the regional health alliances, which everybody is meant to join to get insurance cover, are negotiable. Although he said he was misquoted, Mr Clinton's apparent willingness to cave in has resurrected the charge that he gives comfort to his opponents by compromising too early.

The weakness of Mr Clinton's plan is that nobody believes he knows how to pay for it. Critics say that by trying to ensure that doctors, hospitals, insurers and drug companies do not lose out he is preparing the way for a price explosion. The health care alliances were meant to focus buying power and bring down costs. From the beginning Mr Clinton ruled out government-set prices - as in France, Germany and Sweden - for services provided by doctors and hospitals. A US surgeon earns on average dollars 223,000 ( pounds 148,000) a year.

The health care industry is funding a subtle and effective television advertising blitz which fosters fear that Mr Clinton is devising a bureaucratic monolith that will, in future, determine the health care that Americans receive. Senator Jay Rockefeller of West Virginia, long an advocate of universal health care, says that big business only likes Mr Cooper's plan 'because he does not change the status quo'. He blamed the insurance and drug companies for stampeding other business leaders into rejecting Mr Clinton's plan.

The costliness of US drugs compared to Britain was shown yesterday by the publication of a study by the General Accounting Office. It shows that in 1992 the prices of the 77 most commonly prescribed drugs in the US were 60 per cent higher than in Britain. For 47 of the drugs prices were twice as high in the US as in Britain.

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