AN IMPORTANT ASPECT of President Clinton's health-care plan is its effect on competitiveness - the ability of U.S. companies to sell against foreign producers here and abroad. So far, most of the debate in this area has been too simplistic. For globally competitive companies, understanding the impact on competition - which varies from industry to industry - may be critical in deciding whether to support Mr. Clinton's plan or some other.
The administration is predicting lower long-term business costs - and therefore greater competitiveness - from health-care reform. Mr. Clinton's critics, on the other hand, look at the cost of forcing companies to pay for insurance and see a competitive nightmare.Neither view is right.
For starters, it's important to understand that health-care costs are mostly borne by workers, not companies. If workers demand health care from their employers, most companies will hold down wages over time to offset the higher benefit costs.
Since workers ultimately "pay" for rising health-care costs through lower wages, they stand to gain - through higher wages - from the savings of health- care reform. That means total U.S. labor costs wouldn't fall, so overall American competitiveness wouldn't improve.
That's what several economists told the Senate Finance Committee on Wednesday. Henry Aaron of the Brookings Institution said health reform ''matters very little for the competitive position of the United States as a whole." But he was quick to add that health reform would "matter considerably for individual companies."
That's because the administration's package has a different impact on different industries. Mr. Clinton's plan would require all companies to pay 80 percent of insurance premiums for all employees; small companies and low-wage workers, however, would receive subsidies. The government also would provide big subsidies for workers who retire early. Moreover, everyone in a certain region would pay the same health insurance premium, regardless of age or medical condition. This important change would reduce health costs for industries with older workers.
The upshot of all this is that the Clinton package is expected to lower health costs for some industries and raise them for others. Studies by Brookings and by Lewin-VHI, a consulting firm, came to much the same conclusion: Manufacturing, mining, communications, transportation and utilities will pay less under the Clinton plan; retail trade, other service industries, construction, agriculture and finance will pay more.
The reason for this split is no mystery. Most of the "winners" already provide health coverage. In fact, they indirectly cover uninsured workers
because doctors and hospitals charge them more to cover those without insurance. They also incur heavy costs for retirees. Under the Clinton plan, some of those costs would be transferred to firms that don't now offer coverage or to the government.
Some of the savings for the winners, of course, will go to higher wages. So if the auto industry, for example, has lower health costs under the Clinton plan, it is wrong to suggest that most of those savings will translate into a cost improvement vs. Japanese automakers.
But it's just as wrong to say health savings won't make any competitive difference. Some of the gains in a particular industry may go toward lowering prices, which would improve the industry's competitive position. Or the company might keep some of the savings as profit, which could then be reinvested to improve competitiveness.
On balance, then, while health-care reform won't help the overall competitive position of U.S. industry, it could have a noticeable impact on manufacturing and a few other industries. The down side is that since services and agriculture are major U.S. exports, those industries may actually be less competitive under the Clinton plan.