San Francisco soon will become the first city in the nation to offer health care services to all of its uninsured residents.

The bold plan will be watched closely by health experts and patient advocates across the country.

If it succeeds, other cities and counties may attempt a similar move toward universal health care. But it won't be easy to follow suit.

San Francisco has unique qualities that make it the perfect place to launch such an experiment, many say.

"For most of us, universal coverage really has to be a local, a state and a federal solution," said Dave Kears, director of the Alameda County Health Care Services Agency. "It is beyond the realm of local finances.

"But kudos to San Francisco for making an effort," he said. "If nothing else, they can shame the state and the feds into doing more."

San Francisco is both a city and a county, which means it has just one set of leaders to grant approval for such a plan.

It also has a well-established primary care system, a sizable amount of health-care dollars it can redirect and disproportionately fewer uninsured than many other areas.

Dr. William Walker, director of Contra Costa (Calif.) Health Services, is among those who will keep a close eye on the program.

"I certainly want to follow the San Francisco experience and see what's applicable," Walker said. "I think it could serve as a model for other entities."

Oakland, Calif., Mayor-elect Ron Dellums also is exploring ways to expand health care for the uninsured in his city.

The San Francisco plan, approved last week by the Board of Supervisors, emerged as a compromise between proposals by Mayor Gavin Newsom and Supervisor Tom Ammiano.

The goal is to offer health care services to the 82,000 uninsured adults who earn too much to qualify for Medi-Cal, which serves the state's poorest residents.

The program would be open to everyone, regardless of immigration status, income or a pre-existing medical condition.

It differs from typical universal health care proposals in one key aspect: It would provide access to services, rather than insurance.

That concept appeals to Alain Enthoven, a professor of management in the graduate school of business at Stanford University.

Many uninsured residents already obtain treatment through San Francisco's health system, but only after they become so sick they arrive at a hospital emergency room.

That is a costly way to provide care.

Under the new program, participants would receive preventive care and screening to help ward off chronic conditions or at least identify them early enough so they can be kept from getting worse.

Not only does this result in healthier people, it helps lower costs, Enthoven noted.

It also highlights one way that San Francisco will pay for its experiment, estimated to cost $200 million annually.

City officials plan to redirect into the new program the $104 million they spend annually on the uninsured.

"San Francisco has been generous historically in health care spending and so I have a lot of health care dollars that I can direct," said Dr. Mitch Katz, head of the city's Public Health Department.

A mandatory contribution from businesses has been the most controversial aspect of the plan.

Newsom, who has operated several small businesses himself, initially wanted a contribution to be voluntary. But he worked with Ammiano to devise a mandatory plan both could support.

Firms with 20 or more workers have to kick in $1.06 for each hour worked by an employee. Those with more than 100 workers will pay $1.60 per hour.

Companies that already provide health insurance to their employees will be exempt, as long as they spend at least as much as the mandatory contributions.

The fees will take effect next July for businesses with 50 or more employees, and in April 2008 for those with 20 to 49 workers. Companies with fewer than 20 workers will not pay a fee.

The business contribution is expected to bring in $30 million to $49 million a year.

Legal challenges are expected, said Jim Lazarus, senior vice president of the San Francisco Chamber of Commerce. The chamber opposes the mandatory contribution but has not discussed a lawsuit.

Lazarus predicted dramatic impacts on some small businesses.

"We have restaurants with $40,000 a year annual premiums that are going to triple or quadruple," he said. "A lot of those businesses don't have that profit margin. They're going to have to go out of business."

Participation would be optional for the uninsured. Those who do join will have a co-pay based on their income.

The co-pays would range from $3 per month for those at the lowest income levels to $200 per month for those at the highest.

Katz expects the plan will withstand legal challenges and the city will begin serving patients next July.

He plans to gear it up gradually over three years, rather than attempting to enroll everyone at once. The system may face a pent-up demand for mammograms, pap smears and other types of preventive care.

Some question whether soaring health-care costs will bog down the program, a problem that plagues much of the industry.

But Katz said he believes it may help San Francisco keep expenses in line, in part because the care will be provided through an existing network of clinics and hospitals, rather than having third-party insurers reaping profits.

"We stand a better chance of controlling costs by getting people into preventive care and managing that care than doing nothing," Katz said.

For Contra Costa County to attempt such a program, all 19 of its cities would have to impose a business fee, Walker noted.

In Alameda County, if Oakland decided to enact such a program unilaterally, businesses could simply move next door to Berkeley, Calif., or San Leandro, Calif., to avoid the fee, Kears said. Oakland also would have to work out an agreement with Alameda County, since the city does not have its own health care system.

It might take $400 million to set up a similar program for the 160,000 uninsured in Alameda County, Kears said.

"Can you take that out of the business community?" he asked. "I don't know that you can."

While he praised San Francisco for its innovation, Kears said it will take all levels of government to explore ways to control costs.

Like San Francisco, most counties are looking for ways to expand access to services, rather than providing insurance coverage, he said.

Because they lack insurance, participants in the San Francisco program will not be entitled to receive care outside of city limits.

While acknowledging that San Francisco has advantages in setting up such a program, Katz said many of the ideas could be applied elsewhere, including using dollars already in the system and requiring employers and the uninsured to contribute.

But first, many want to see how San Francisco does with its experiment.

"Any political body that tries to advance the issue or move towards universal access is a positive step," Kears said.