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The "co-op plan" for health care reform is barely a week old as a concept, and only days old as a draft proposal by the Senate Finance Committee, but already many have declared that it can't work. These claims have often involved personal attacks against anyone who supports the idea.

Robert Reich has looked into the Republican soul and declared that the reason they support the idea is that cooperatives "won't have any real bargaining leverage to get lower prices because they'll be too small and too numerous. Pharma and Insurance know they can roll them." That may be true. It may also be true that Republicans realize that the market has failed to solve the problem and co-ops represent a way to do that with minimal government interference. Or perhaps it is a complex mix of motivations from many different individuals with different degrees of integrity and coziness with "Big Pharma and Insurance."

In any case, this was written a full week before a skeletal draft proposal came out, so it is hard to imagine that it is based on much beyond bias. I don't doubt for a second that Reich could support his claim; he just hasn't bothered to do so in anything I've found. He repeated his claim last week, but without further elaboration.

A few days later, Jacob Hacker delivered a similar dismissal. But to his credit, he at least provided some standards (three "B"s) by which he was dismissing the idea: "We need a national public plan that is available on similar terms in all parts of the nation as a backup. This plan has to have the ability to improve the quality and efficiency of care to act as a benchmark for private insurance. And it has to be able to challenge provider consolidation that has driven up prices to serve as a cost-control backstop."

I'll briefly address each of these with evidence that health co-ops could achieve these standards. Each of my examples provide some support for each of the "B"s but they particularly illustrate evidence that one of Hacker's claims need more support.

Backup: Coop Italia is Italy's leading marketer of packaged groceries, owned by 155 consumer cooperatives. It has a nearly 20% national market share through almost 1300 outlets, which are collectively owned by about 10% of the national population (which probably understates their true penetration because there may be only one member shopping for a household). My own research found that it provides organic fair trade products at prices that sometimes rival conventional competitors.

Backstop:  Quebec funeral cooperatives have a 14% market share, and a 2006 study shows that they have had a dramatic impact on costs industrywide. In 1972 (before co-ops) funerals in Quebec cost 20% more than in the rest of Canada. By 2000, the gap had been reversed, AND co-op funerals were 40% cheaper than the provincial average and 45% cheaper than the national average. Incidentally, this industry has a counterpart in the U.S. - Seattle-based People's Memorial Association provides dramatically better prices than the competition, and is also a part of the Funeral Consumers Alliance (a nonprofit for all sorts of nonprofit providers, whose Web site mentions that some of its members negotiate through cooperative purchasing).

Benchmark: Group Health Cooperative is directly relevant to the topic at hand. A 1984 article in the New England Journal of Medicine concluded that Group Health delivered roughly equal care for about 25%  less than fee-for-service care. But what I found really interesting about this report was that it also revealed that Group Health members had 40% fewer hospital visits (over a five year period). If keeping all those people out of the hospital isn't improved quality, I don't know what is.

Reich and Hacker each know more about economics than ten of me rolled up in a ball, but there's no way they did a feasibility study before making their declarations. I haven't found any online evidence that either has particular expertise in cooperatives. It may be that they have papers on this subject somewhere, and even though they are obsolete in the wake of a game-changing federal plan, I would still love to see them.

I would also appreciate a clear explanation of how a public plan will be sustainable in the long run; we are already dealing with serious problems for Social Security and Medicare, as well as general insolvency of the government.

Before we commit to relying on cooperatives for health care, we'd better be pretty sure that they can work. Even in ideal circumstances (i.e. large states with well-organized co-op movements),  it will be very challenging to pull this off, and any proposal will need some level of support for the development process. In places like Nevada or Wyoming, the challenge will be greater. I have my doubts, but the reason I'm making all this noise is that I want our decision to be based on more facts than assumptions. What is needed is an unbiased and expert study.

PS. Time just ran a pretty good piece on this, in which Hacker is a source; he does seem to have some co-op history background, so I stand corrected on my comment a few paragraphs up. I've also emailed him, and hopefully will have more information soon.

Originally posted to andrewmcleod on Sun Jun 21, 2009 at 10:31 PM PDT.

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Comment Preferences

  •  I agree with you (2+ / 0-)
    Recommended by:
    LordMike, openDoc

    I've tried to tell people here that a coop system is not an automatic loss. Any health care plan that can extends coverage to all at a reasonable price while encouraging prevention and reducing costs is a plan that works. You can call it single payer, you can call it spaghetti and meatballs, so long as it accomplishes the goals I specified.

    •  Why haven't they worked thus far? (0+ / 0-)

      Or, maybe more precisely, why aren't they being used to any great extent?

      •  lack of public support, perhaps (0+ / 0-)

        They are being used in other places, just not here so much. This might just be because people are unfamiliar with them. It might also be because we haven't really needed them. Co-ops are most useful when there is a market failure, such as a small town losing its last grocery store; nobody wants to own the store, but the town still needs to buy food.

        This may sound paradoxical, and obviously 46 million people need SOMETHING. But what I'm saying is that there hasn't been a critical mass of people whose needs aren't met at the same time as there is a concerted and well-supported effort to develop cooperatives and educate people about how it is in their interest to join.

        You raise an absolutely essential question for us to be asking. If we put our eggs in this basket, we need to be very sure that it works better than it did in the past. I don't have an answer yet, but I'll be working on that.

        •  Not just those who are uninsured need to (1+ / 0-)
          Recommended by:
          Brooke In Seattle

          have the health insurance system changed, those who are barely affording their premiums now, and those who are underinsured, need the system to change too.

                 Just my two cents,
                     Heather

          A Netroots Nation Scholarship applicant. Planning a March for Accountability.

          by Chacounne on Mon Jun 22, 2009 at 12:16:21 AM PDT

          [ Parent ]

      •  No mandate (0+ / 0-)

        Co-ops without mandate will only attract those that need a lot of resources. I think some coops will work, some won't because of mismanagement. Just like anything else.

        The devils will be in the details. In a lot of areas, public and state hospitals will take co-op patients. They will rely of NPs PAs to do most of lower level work with physicians doing the more elaborate stuff.

        I work at a public institution. We do not get paid for a lot of the care that we render. If a co-op existed in our area, or maybe if our health system was allowed to be the co-op,  we could deliver good care, quality care and inexpensive care.

        But you need a mandate that people buy into the coop before they get sick.

        Politically speaking, the solution will be co-ops. Everyone will have to buy coverage. The public option will not fly for various political reasons and cost.

      •  Inertia. Why aren't credit unions more in favor (0+ / 0-)

        than for-profit banks, especially given all the dissatisfaction with banking, mortgage and credit card services?  It's easier to find a bank with a lot of branches, and the "convenience" is too attractive, even though it has a price.  

        Nevertheless, there are health care co-op success stories, such as Puget Sound Group Health Cooperative, a well-run co-op, founded in 1947, with more than 1/2 million members.  Kaiser Permanente is a non-profit, so is like a co-op in that respect; it was founded during the Deprression to provide health care to workers in the construction industry, but is now open to the public.  It touts its community outreach programs on its web site, which makes it appear to me that it may emulate co-ops in this respect as well.

        It would be interesting to hear from Kossacks who are members of health care co-ops, and who could tell us how they perform and what they see as the advantages.

        The appeal of the co-op form to me is the opportunity for input by members, to a far greater extent than any unitary, "Medicare-like" public option could provide.  Does any Medicare user feel they have any influence over its policies, or input into issues that might affect its solvency?  These are not easy issues, but if you cede the right to be involved, you're in the position we are with Medicare and Social Security -- powerless to do anything but hope the powers that be come to their senses in time to prevent bankruptcy of the whole system.

    •  The current proposal... (0+ / 0-)

      ...has the co-ops administered by the HHS... sounds national to me....  could be a wolf in sheep's clothing...  Grassley hates it, so it can't be all that bad...

      But, it is a loss, 'cos a non-public plan could never evolve into single payer...

      DARTH SPECTER: I am altering the deal! Pray I don't alter it any further!
      LANDO REID: This deal keeps getting worse all the time!

      by LordMike on Mon Jun 22, 2009 at 12:07:57 AM PDT

      [ Parent ]

  •  stop blathering about your love of co-ops n/t (4+ / 0-)

    Cheney tortured detainees to elicit false justifications for invading Iraq.

    by ericlewis0 on Sun Jun 21, 2009 at 10:47:36 PM PDT

    •  No. (3+ / 0-)
      Recommended by:
      bobtmn, cwech, caul

      It's pretty sad that you aren't willing to consider my point of view. I do love co-ops, and I'm also not just saying that they are a magic solution because I'm quite critical of Conrad proposal. Even so, I am trying to help other people understand it so they can make an informed decision.

      If you don't like it, don't read it.

      •  if only there were way to unread it (1+ / 0-)
        Recommended by:
        samddobermann

        I'd do anything for the last 7 minutes of my life back.

        Cheney tortured detainees to elicit false justifications for invading Iraq.

        by ericlewis0 on Sun Jun 21, 2009 at 10:57:04 PM PDT

        [ Parent ]

      •  I don't agree with you (1+ / 0-)
        Recommended by:
        Alec82

        but you get a rec for this comment because the guy you're responding to is being a jackass.  I don't see the coop model working, but it is entitled to a serious debate rather than being told to "stop blathering about your love of coops."  Keep talking about coops, an honest debate on the issue is worth having, even if I think you're on the wrong side of it.

        "You can only protect your liberties in this world by protecting the other man's freedom. You can only be free if I am free."-Clarence Darrow

        by cwech on Sun Jun 21, 2009 at 11:00:08 PM PDT

        [ Parent ]

        •  Thank you. (0+ / 0-)

          But I actually haven't taken a side yet. I need a lot more information before I do.

          I'm just calling for people to look at the facts before taking sides.

          •  Really? (1+ / 0-)
            Recommended by:
            dewley notid
            You haven't taken sides on coops, even though  Andrew McLeod is a cooperative development specialist and a candidate for the Masters in Management - Cooperatives and Credit Unions from St. Mary's University in Nova Scotia?

            I normally never waste time looking at poster's info, but you've stood out with me over several threads, pounding this one drum.  I wondered who sponsored your postings.

            So I don't feel you're being candid.

            Also, how, if you're a "cooperative development specialist" do you not have a better answer for why they're not implemented more.  You're reply ... "lack of public support, perhaps?"  As a specialist, do you not know?

            •  Great points. (0+ / 0-)

              I regret the apparent lack of candor.

              I have indeed taken sides on cooperatives as a business practice, and I make no apologies for that. What I meant was that I haven't taken sides on this particular proposal, for reasons that I explain at length here and in my other blog.

              Yes, I am a one-trick pony. That's because cooperatives are my area of expertise, so I write about that. In particular, there is a lot of misinformation about this particular issue, so I'm focused on it at the moment. I could also tell you what I think about Iran, torture, or puppies, but that would just be my opinion as a random guy.

              At least I'm being transparent. You can easily look up my associations, and see that at the moment I'm an underemployed independent contractor. These messages have no sponsor, and you will notice that they tend to happen late at night and on the weekends.

              But in the interest of disclosure, since you asked, I would hope to be involved in the development of a health care co-op in my state, regardless of whether this proposal becomes law. But I'm not so interested in doing that if it's doomed to failure. Hence the fixation on trying to answer that question.

              And I don't know why health cooperatives arent' more common because I am a specialist about co-ops in general, and just now starting serious research into healthcare. Unlike most writers (about whom I complain), I am trying not to jump to conclusions when I don't have enough information. I'm trying to avoid hypocrisy.

              Thanks for your critical thinking.

  •  You lost me at this: (7+ / 0-)

    we are already dealing with serious problems for Social Security and Medicare, as well as general insolvency of the government.

    We are dealing with nothing of the sort.  And our federal government is not insolvent.  Personally, I don't trust the co-op option because it is being proposed by Republicans and they have a history of not negotiating in good faith.

    •  fact check (0+ / 0-)

      Kent Conrad, who developed the proposal, is a Democrat.

      Here's the conclusion of the official analysis of Social Security and Medicare (signed by Secs. Geithner and Sebelius): "The financial difficulties facing Social Security and Medicare pose serious challenges. For Social Security, the reform options are relatively well understood but the choices are difficult. Medicare is a bigger challenge. Its cost growth can be contained without sacrificing quality of care only if health care cost growth more generally is contained. But despite the difficulties—indeed, because of the difficulties—it is essential that action be taken soon, particularly to control health care costs."
      http://www.ssa.gov/...

      And regarding insolvency, perhaps I overstated my case because that word is defined as "the inability to pay debts as they come due; we are able to keep borrowing more money for now, but we are clearly broke if the Chinese stop providing credit for us.

      I'm just saying that we should not assume that a public plan will outlive us.

      •  fact check - if it were not for GOP "No" stance (0+ / 0-)

        there would be damned little need to look at alternatives - no matter how little or how much they bring to the table.

        The only reason this is slipped into the Finance Committee bill draft is as a palliative to the GOP who have an irrational and reflexive rejection of anything that is a Public Option, let alone a Single-Payer system.

        Oh, and despite that palliative CBO will end up savaging the plan as too costly precisely because it does too little to rein in costs.

        - the co-ops will not have the bargaining power of a national Public Option -  thus the cost constraint is insufficient going forward

        - the co-ops will - worse even than the above - actually be expected to come in at the price of current private insurance (thus ensuring that overall health care spending explodes)

        - the co-ops, as envisaged by Conrad & Baucus will remain unaffordable by those most in need of protection

        - the co-ops will be vulnerable to predatory de-mutualization -  ending up being bought by the very private concerns with which they are meant to compete

        - the co-ops as planned provide too little coverage (one plan paying no more than 65% of fees), so medical bankruptcies will continue

        - the co-ops as planned will not cover everyone presently under-insured or uninsured

        - the co-ops as planned are thus doomed to be a failure

        Unless I see rigorous analysis, or robust alternative proposals addressing the mechanistic and fiscal failings outlined above I see no reason to beat any co-op drum - ever.

        •  I'll get to work on all that... (0+ / 0-)

          ...as much as possible in my spare time.

          And I hope that folks apply the same rigorous standards to the public plan, which is at least as problematic as a government-led cooperative development plan. If you want to hear drum beating, you should try dissenting on the Daily Kos.

          •  You have - I take it - actually read (0+ / 0-)

            the many diaries which already have applied rigorous analysis to the distinctions between a robust public option and what many here prefer, single-payer?

            What you are asking for has already been done. So, the ball surely is back in your court. As the cooperative development specialist you probably could write your entire Master's Thesis around this one topic. At least then the need for spare time would not be an obstacle.

            I recognize that you are relatively new around here - but, please, before pulling out the fair and equal treatment card it would behoove you to actually see how many diaries, how many stories have been written on Public Option. Otherwise that statement takes on something like a lecturing tone:

            I hope that folks apply the same rigorous standards to the public plan ...
            If you want to hear drum beating, you should try dissenting on the Daily Kos.

            Or, worse, it displays a level of disconnection with the history of the health care debate on DKos which is somewhat alarming for a proponent of a relatively new proposal.

            Please, look over some of these Stories and Diaries and decide for yourself if the deficiencies of Public Option have been dissected with sufficient vigor: Found 3794 results, displaying 44. Search time 0.393 seconds, run time 0.507 seconds.

            •  drum circle (0+ / 0-)

              I wrote that "drum beat" comment in a moment of frustration and low blood sugar, and all morning I knew I would regret it. Thanks for the feedback.

              I am indeed new, and I'll work on being a bit more humble. I have indeed been browsing my blogging environment but due to the quantity of bad information I've been finding within my main search parameters, I've been a bit too busy playing defense to read all 3794 items you found. I'm sure that there are good analyses, and I didn't say (or imply) that they don't exist; just that people need to apply a fair standard to the different options. Your list would be comparable to my saying that we can't guarantee that we'll only have Democrat-controlled government (nor that the Chinese will keep lending us money so our economy doesn't implode) and Medicaid doesn't serve everyone who needs it, so a government based option can't work and I don't want to hear about it until you take care of that objection. Kind of unreasonable, isn't it? I hope we can have an environment that is more open to new ideas than this.

              My frustration came from the tone of your to-do list, which seems a bit unreasonable, as though you were not willing to investigate an option until after it had already been proven feasible. The first two of your items were already done by my original post (vive le Quebec!), so it also gave me a sense that you won't be happy with anything I produce. And reducing my attempt to inform the debate without even taking a final position to "beating a drum" is frankly sort of bizarre. Nevertheless, I recognize that this is a hot issue, so I'll try to avoid sarcasm in the future.

              You're right about the thesis idea. That isn't due until 2012, so it will be much too late for this debate (God willing). Still, I do intend to add this topic to my main research thrust, which is food systems.

  •  Co-ops are fine--IF (7+ / 0-)

    a strong public option is also part of the package. If the co-ops can outdo the feds, more power to them!    If!

  •  Why I dismiss the coop idea is that they (3+ / 0-)

    are permitted under current law but have not emerged. Perhaps a single coop that operated on a nation-wide basis and that was heavily subsidized during its start-up phase might be work examination. But the state-by-state idea for coops is a non-starter as the negotiating leverage would just not be there.

    •  good point (1+ / 0-)
      Recommended by:
      bobtmn

      I think that the creation of a major program might lead to the critical mass through which a federation of state/regional cooperatives could achieve success. But it's really hard to tell, and generally speaking co-ops are strongest when they are started from the ground up. Government support has a long history of mudddling up cooperatives, here and globally.

      But again, I don't see how you can quickly conclude that state co-ops wouldn't have the leverage. Co-ops have successfully provided leverage in many industries and many contexts, despite being smaller.

      Another example to consider is electric co-ops. The National Rural Electric Cooperative Association is made up of 47 state associations, with 900 co-ops and 42 million members. They electrified 75% of the nation's landmass, which is at least as daunting as the 15% of people without insurance. http://nreca.org/...

      •  The electric coops are a BAD example-there were (0+ / 0-)

        and continue to be massive federal subsidies for coops. And they do NOT compete with private providers - they serve markets that the private utilities were not interested in serving.

    •  That was my question. (2+ / 0-)
      Recommended by:
      alba, thethinveil

      If they're so great, where are they?

    •  Health care coops could work very well. (1+ / 0-)
      Recommended by:
      openDoc

      As an independent contractor and small business person I have tried to find ways to get health coverage, along with many other people.

      It is not possible to start a health care buying group unless someone will sell you the insurance at a fair price.   This is the reason they do not exist already.

      Group insurance rates, where everyone is part of the same risk pool and pre-existing conditions are not considered are offered ONLY to businesses.    

      You can buy health care at a discount through some trade associations, but the ones I have seen are INDIVIDUAL policies, based on your individual history and risks.

      I think a Coop could be very powerful if the insurance companies were required to sell them insurance under the same terms as a large business buyer.

      Another advantage of the Coop model is that the Republicans would not be able to take it away, or undermine it in the future.

      Religion gives men the strength to do what should not be done.

      by bobtmn on Mon Jun 22, 2009 at 06:30:12 AM PDT

      [ Parent ]

      •  But you need a mandate of sort (0+ / 0-)

        that people pay into these co-ops. One cannot be 25 and young and go without insurance and then when they get ill at 30 join a co-op.
        If everyone pitches in it will work.
        If there is a mandate, the risk will be spread and everyone should pay group policy.

        •  Age related costs (1+ / 0-)
          Recommended by:
          openDoc

          Any successful plan, including coops, will require universal coverage.  This would have to be considered a mandate if people have choices.

          Personally, I don't see anything wrong with charging more for older people.  I am 58 and would certainly be affected by this, because I have seen lots of my peers getting sick and dying the last few years.

          Older people are at higher risk, and older people generally have more money than younger ones.   I don't think it is fair to shift the cost of health care for all to the younger people.     Young people have enough to worry about with paying for education and housing and raising kids.

          Religion gives men the strength to do what should not be done.

          by bobtmn on Mon Jun 22, 2009 at 07:32:38 AM PDT

          [ Parent ]

      •  The pending Conrad proposal does not (0+ / 0-)

        require the insurance companies to sell group plans to coops. Also insurance companies have contracts with hospitals, doctors, and diagnostic facilities under which they get huge discounts. I have seen no discussion on the part of coop advocates in Congress that would require that kind of deal-making opportunities for coops.  

        •  insurance companies (0+ / 0-)

          I don't think that the idea is for co-ops to buy insurance from insurance companies. That would be kind of like McDonald's buying meat from Burger King (if McDonald's were a co-op, that is). Instead, they are self-insuring pools. Negotiation would take place with the other players you mention, and as long as the economy of scale is there, co-ops will be able to do anything that a for profit firm can. Of course, it seems like the real savings come when co-ops bring those sorts of things in house (like Co-op Italia has, as well as Group Health). The trick is that is a whole additional level of organizing; it could come later, as long as the various state co-ops are allowed to federate.

          •  It depends on how small the coops are (0+ / 0-)

            Small coops would be on the market to purchase group plans like an emloyer.

            And as has been noted repeatedly, coops are allowed under current law and have barely existed so unless there are huge subsidies and/or the barriers to entry associated with scale and/orand refusal to deal eliminated, they are not a viable option.

            •  subsidies and barriers to entry (0+ / 0-)

              Both of these are addressed on p 5 of the draft proposal:
              http://voices.washingtonpost.com/...

              As far as I can tell, the main reason for a federal co-op plan is to deal with these barriers by providing risk capital and operating loans. It seems strange to concluded that a plan won't work because the problem hasn't been solved without the plan, doesn't it?

              If we were to get a lot of these going at once, and in a coordinated way, they would have a much better chance of survival than the relatively isolated co-ops of the 1940s. Think of a single exposed seedling vs. a forest. The big trick will be to get them all going at once.

              •  There many barriers besides start-up (0+ / 0-)

                capital (and we know that it will not be substantial based on Chuck Schumer's statement today that the negotiations with the Republicans on the coop idea were not going anywhere). I agree that the coops could work but only if health care providers were required to deal with them in the same way that they deal with large insurance companies (i.e., sharp volume discounts) and certainly not if they are designed by the insurance industry as seems to be what is going on.

                •  totally surreal (0+ / 0-)

                  I just have to say that it is really disorienting to have Senators getting into a big argument about how a co-op should be structured. I never thought I would see the day.

                  I don't think we need a requirement that providers provide discounts. That seems like it would be a non-starter, and probably not even a very good idea. On the other hand, it might be necessary at first, until the economies of scale kick in.

                  To get around this, I think it would make sense to start with a few co-ops that are each available in multiple states, and then they gradually reproduce by something like cell division. That would make more sense than trying to create co-ops in states without much population or experience, and then adding the step of joining them by federation.

                  There are models of co-ops with non-member board representation, and that is usually because outside capital is needed. I'm afraid I'm with the Republicans on the level of government "touch" needed. I believe that a big part of the reason that regulation is needed is the inherent antagonism between consumers and investors; the former must be protected from the cost-cutting of the latter. In the case of a co-op, the two parties are the same, so there is much less need for the government to add an additional layer. I don't see the need for a lot of government oversight beyond the obviously intense legal requirements.

                  If you're right about co-ops being designed for the pleasure of the insurance industry, I shudder to think of what a mess that would be.

                  •  All insurance companies (0+ / 0-)

                    get huge discounts from all health care providers - if the coops don't get them, they don't survive - it's not even a debatable point.

                    The model you describe does not require a federal law and does not exist because its not viable.

                    Coops are generally run by boards and the members often don't have much of a say-so in their operations.

                    •  It's a good thing, too (0+ / 0-)

                      If 500,000 members were heavily involved in management, it would definitely be a train wreck. Better to have a board that is accountable to them choose someone competent. Collective management has its place, and this ain't it.

    •  They don't exist now for one reason. (1+ / 0-)
      Recommended by:
      alba

      Businessmen like profits.  That's what funds their exorbitant salaries and bonuses, that's what pays for their private jets.

      That's why BlueCross/Blue Shield, founded as non-profits in the various states, have tried mightily over the years to escape to the for-profit world, wherever state regulators have let them get away with it. (As of now, about half the Blues are for-profit; half remain non-profit.)

      Let me repeat:  Businessmen like profits.

      That's why the management of many federal credit unions have proposed converting into for-profit banks.  In many cases, these proposals have been bitterly fought by the members of credit unions, because they know management just wants the higher salaries, perks and bonuses they can pay themselves in the for-profit world. Dearborn Federal Credit Union, established as the credit union for Ford employees, is one example.  Its members fought a management proposal to go for-profit, and threatened to throw themout, forcing them to withdraw the conversion proposal.  

      With a dwindling number of mutual thrifts left in the country, investors have begun looking to credit unions as the next big thing in the high-return investment game. [snip] But strong opposing forces have kept the future of credit union conversions in doubt. The proposed conversion of Dearborn, Mich.-based DFCU Financial was withdrawn in April, and the NCUA passed rules in December that observers say will make it more difficult for credit unions to convert to thrifts. Dissident members of Lafayette Federal Credit Union are calling for regulators to invalidate the vote that approved the company's plan to convert to a thrift. In 2007, investors will look to the pending conversions of Sunshine State Credit Union and Think Federal Credit Union for signs that credit union conversions will become a permanent tool alongside mutual thrift conversions in the investment-strategy tool belt.

      http://www.snl.com/...

      Oh, one more thing:  did I mention that businessmen don't form co-ops, and try to convert anything in non-profit form to for-profit form, because

      Businessmen like profits.

      •  Exactly - I once belonged to a health care coop (1+ / 0-)
        Recommended by:
        southriver

        One day it somehow managed to sell itself to a for-profit and the rates skyrocketed the next day . . Somehow this was all done without the knowledge of the members and the profits from the sale were definitely not distributed to the members.

        •  The best kind of conversion. (1+ / 0-)
          Recommended by:
          alba

          Everything for the management, nothing for the members except higher rates to fund the higher salary levels.

          That's why any co-op health care law has to provide that, never, under any circumstances, will any co-op be allowed to convert to for-profit form.  If it is allowed to be done, it will be done, because  --  guess what?

          Businessmen like profits!

          They look at them like their personal piggy bank.

  •  Really, they should pilot test a bunch of systems (0+ / 0-)

    And adopt the most successful one nationwide.

    But government never seems to work that way.

    •  pilots (0+ / 0-)

      A federation of cooperatives would be an ideal incubator for determining best practices. We now have technologies for learning from each other that weren't available the last time a wave of health cooperatives was launched (mid 20th Century)

  •  So would the cooperatives be required to accept (0+ / 0-)

    anyone regardless of age, pre-existing conditions, etc.? Would they be required to not charge higher rates to those who are older and to those with pre-existing conditions?
         
                  Heather,
    Who is Canadian and dearly wants her American family and friends to have proper health care that isn't going to bankrupt them.

    A Netroots Nation Scholarship applicant. Planning a March for Accountability.

    by Chacounne on Mon Jun 22, 2009 at 12:12:29 AM PDT

  •  I Belong to a Health Coop (3+ / 0-)

    ...or what started out that way and continues to operate like one, Kaiser Permanente.

    I've had Blue Cross/Blue Shield and dealt with other insurers on behalf of friends and family. Kaiser Permanente is pretty terrific and, after what I've read here, I know I'm lucky to be in a place where it's available.

    I pay for the insurance myself, but more than insurance, it's really a campus of health care, with its own hospitals, labs, and medical services. It is very inexpensive, as well, which is puzzling. I suppose it suggests that they deliver full spectrum care cheaper than the rest.

    That being said, if I had a pre-existing condition, I doubt that I would be allowed to join.

    I don't see how a cooperative, however, can provide what America needs.

    •  Kaiser was not a coop; it was and is an integratd (2+ / 0-)
      Recommended by:
      Pluto, ItsSimpleSimon

      medical care facility.

      There are a few other places like that such as MAYO and the Cleveland Clinic and they are excellent. They EMPLOY the doctors; that is why they work. Doctors can't raise their income by ordering excess tests. They use lots of check lists and info sharing and internal quality control. They own the hospitals and everyone is an employee.

      A coop would no have control over the doctors and providers.

      State coops would be a disaster. I live in NM. What if I got sick in NH or Mass? What if I found that the best surgeons for my condition were in Minn? There is no provision for portability.

      Then who would run each? Elected officers? Health care is a lot more expensive than electricity. It's huge. Who would check up on the people actually running it? What team would bargain with suppliers which are each MD, the nurses, hospitals and medical centers, equipment providers like Oxygen providers and so on .... Let us not forget negotiating with all those pharmaceutical companies.

      So - a fair size bureaucracy X 51 = chaos beyond belief.

      Coops would take years to establish and years to get off the ground. Look at how all those other ones started and how long it took for them to grow to just where they knew they would survive.

      Would you join a new one? Or would you wait?

      We are in a time where it is risky NOT to change. Barack Obama 7-30-08

      by samddobermann on Mon Jun 22, 2009 at 02:07:26 AM PDT

      [ Parent ]

      •  I Agree Completely (0+ / 0-)

        ...about the future and, as I said, I don't see how a coop makes sense for all the salient reasons you've given. Even if I could argue the mechanism, I wouldn't because the solution does not lead where we must go to survive and compete globally.

      •  fact check (0+ / 0-)

        Group Health and HealthPartners both employ their own staff, much like Mayo and Cleveland. Co-ops are generally run by a professional manager, who is accountable to the board, which is elected by the membership. The structure is not much different than other corporations, but the accountability is.

        Most hospitals are already part of cooperative purchasing agreements, which would provide a great template for cooperatives. http://ncba.coop/...

        Co-ops sometimes honor each others' memberships. For an example of this, check out shared branching of credit unions: www.cuservicecenter.com/AboutSharedBranching.aspx

        Also, Group Health members can already get emergency treatment through Kaiser (due to the two organizations' entangled history).

        I would join as soon as possible, even though early adopters often don't get the best deal at first. You're right about the time to get things going. That's a big drawback, but it might be that this problem is bigger than quick fixes can solve. Better to try something sustainable. How can we trust a government program when Medicare is already going down in flames?

  •  I will put it this way with respect to your 3 B's (0+ / 0-)

    I put forth 2 C' (Choice and Competition).

    There are already over 1,000 Health Insurance Companies in the United States ... therefore why are they so afraid of a little more competition that offers greater choice to the American People.  So I say this if states or regions have a desire to form Health Care Co-Ops then let them (BTW the already do some with success and others not so much).  However, I also so that a National Public Option should be in the mix as a Choice that mirrors Medicare (maybe +10% as in Kennedy's Draft).

    1,000 Insurance Companies, 1 National Public Option, and as many state or regional Co-Ops as want to form. This provides maximal pathways of choice for the American People and in the end efficiency and quality of care should WIN THE DAY.

    Demographics do not equal destiny.

    by dr fatman on Mon Jun 22, 2009 at 12:31:31 AM PDT

  •  I don't see how the poor can afford it. (1+ / 0-)
    Recommended by:
    samddobermann

    The reason poor people who don't already qualify for a government health plan don't buy insurance is because they can't afford it.

    They can't afford the premiums, they can't afford the out-of-pocket costs, they can't afford the co-pays, they can't afford the drug costs.

    What will co-ops do for them that a public option with subsidies -- or a preferred single-payer plan -- can't do as well for a much lower cost? The power of single-payer is in its numbers. Co-ops just allow yet another splintering of groups who can't use their size for purchasing power.

    And no one has yet explained what happens to people in a co-op if they get catastrophically ill. Do they get kicked out? Do their premiums go up?

    Why can't people who are sick actually access the care they need?

    And as other posters have asked, if co-ops are so great, why don't we have them already? The ones in California and Oregon went belly up, and the one in Washington that keeps being pointed to as a huge success isn't all it's cracked up to be. In fact, I had never even heard of it before Conrad starting talking about it.

    I don't see how a co-op will help what is currently wrong with they system we have right now. The co-op plan is basically a solution that does not fix the problem.

    "The difference between the right word and the almost-right word is like the difference between lightning and the lightning bug." -- Mark Twain

    by Brooke In Seattle on Mon Jun 22, 2009 at 01:01:49 AM PDT

    •  Neither do I (0+ / 0-)

      The draft proposal includes tax credits to people up to 300% of poverty level. (see p.4 of http://voices.washingtonpost.com/... )

      I know this is not ideal, as it is basically a much-delayed reimbursement for something unaffordable. But that is another issue, and it seems that the public plan would be subject to the same scenario.

      I don't know what will happen to people with catastrophic illness. That would be decided by the democratically elected board.

    •  The "public option" will not be free (0+ / 0-)

      under anyone's proposal, just as Medicare isn't free.  The degree of subsidy necessary to make any proposed plan work is a separate issue, which will have to be confronted no matter what system is selected.

  •  My Mother & Father Called Group Health (1+ / 0-)
    Recommended by:
    ericlewis0

    Group Death. I had to fight the hospital for trying to boot my mother out on the street before any aftercare program was put into effect.  

    Fuck group health.  

  •  Andrew, if you're still around look at my comment (0+ / 0-)

    above. I explained WHY coop idea stinkth.  But it will provide many opportunities for insurance companies to under take the management of them – for a fee of course.

    We are in a time where it is risky NOT to change. Barack Obama 7-30-08

    by samddobermann on Mon Jun 22, 2009 at 02:18:00 AM PDT

    •  I don't understand your first comment... (0+ / 0-)

      ...and I'm not sure how an insurance company would be a manager of a co-op. But you're right about the need to watch out for consultants with hidden agendas. Realistically, co-ops should hire people with industry experience, and those are not likely to have strong co-op backgrounds. This is a big obstacle.

  •  It will be unworkable because of GOP restrictions (0+ / 0-)

    The AP is reporting that the GOP senators are demanding restrictions be put on the co-op plan to make it unworkable. They don't want it to be national, get sufficant start up capital, or government oversight.

    More importantly the plan will only be open to individuals and small business. Even if it won 20% of that market it will only reach a market concentration of about 2%. That is in any location at most 2 out of 100 people belong to it. That makes it unworkable.

    Group health cooperative works because of market concentration. It can set up Group health clinics and doctors. The Conrad Co-op plan would make that model unworkable.

    http://www.google.com/...

    •  Thanks (0+ / 0-)

      I appreciate that you took the trouble to crunch the numbers, and agree that 2% probably wouldn't work. But on the other hand, Group Health only has about 10% of the state's population, mostly concentrated around Seattle, but with smaller clusters in Spokane and Coeur d'Alene. I would not be surprised if they have significantly lower percentagest there.

      That's too bad about the idea being undermined. Here are the problems Sen Schumer is reporting (from your link)

      setting up a national structure for the co-ops - don't know what that means, but if they aren't allowed to federate, I agree that it is unlikely to work. Defeats the purpose.

      $10 billion in government seed money - without risk capitalization, it will be very hard to launch this. Maybe even impossible.

      power to negotiate payment rates to medical providers nationwide - again, not sure what it means, but related to my comment on federating.

      creation of a presidentially appointed board of directors - score 1 for the Republicans! Co-op boards should be elected by the membership.

      Thanks again.

  •  several options can work (0+ / 0-)

    We could use taxpayer dollars to fund everyone's purchase of private insurance. We could have a government-run plan compete against private insurance plans. We could have a co-op system. We could nationalize healthcare, treating it like the police or the courts. We could have have healthcare providers bill the government directly for services rendered, cutting out the middlemen insurers, ie, single payer or national health insurance.

    The relevant question is which works best. Co-ops and public plans could both work. But single payer has two key advantages. It's simplicity means it can be communicated more easily in public discourse and renders it more immune to attempts to water it down in the legislative process compared to co-ops and public option. It's also the most cost-effective. One plan that covers everyone from San Francisco to Wichita to Boston. One funding source that replaces the hodge-podge of various premiums and subsidies necessitated by other approaches. One billing and approval process for healthcare providers. And politically, it's a compromise between national healthcare and private insurance.

  •  Co-ops are a self-selected group where everyone (0+ / 0-)

    obeys the rules and has an interest in the co-op succeeding. In Ann Arbor, there were co-op bakeries and natural food stores and they were wonderful.

    However, co-ops don't scale - they are limited in size due to cooperative practices and cut throat competition. Note that there is no "Ecological Motors Co-op" beating GM & Ford by selling environmentally friendly cars even though many people are in favor of such a concept.

    I voted with my feet. Good Bye and Good Luck America!!

    by shann on Mon Jun 22, 2009 at 06:56:06 AM PDT

    •  Co-ops don't scale? (0+ / 0-)

      How much more can they scale than being about 10% of Washington's insurance industry, or 14% of Quebec's funeral industry, or 20% of Italy's freaking groceries? Please try to set aside your preconceptions, which are apparently preventing you from hearing my argument. We're not talking about collective bakeries here (although I would love to be having a national conversation about democratic management).

    •  There are lots of large scale co-ops. (0+ / 0-)

      Land O Lakes is a pretty sizable dairy co-op:

      Land O’Lakes, Inc. is a national, farmer-owned food and agricultural cooperative serving more than 300,000 direct and indirect members. Each of these producer-members is diverse in his or her thinking, ideas and approach, but all share a commitment to performance, leadership and the future of U.S. agriculture.

      We’re inspired by our roots, never forgetting how a group of Minnesota creameries joined together to create our cooperative in 1921.

      Ocean Spray http://en.wikipedia.org/... is a pretty good-sized co-op:

      Ocean Spray is an agricultural cooperative of growers of cranberries and grapefruit headquartered in Middleborough/Lakeville, Massachusetts. It currently has 750 member growers (in Massachusetts, Wisconsin, New Jersey, Oregon, Washington, Florida, British Columbia and other parts of Canada). The cooperative employs about 2,000 people, with sales of $1.4 billion in fiscal year 2005.

      They were started by 3 cranberry growers in the 1930s.

      There's really no question that very large enterprises can be carried on in co-op form.  Corporations, partnerships, co-ops -- that's just organizational form; pick the one that works best for you.  The key is to find the talent (management) to run it.  And that's the problem no matter what form of business entity you pick.

      •  small homogeneous groups! Yes, 300k is small (1+ / 0-)
        Recommended by:
        southriver

        compared to 3 million mush 100 million.

        And they are all cranbery farmers or dairy cow milker's. They are trade groups.

        We are in a time where it is risky NOT to change. Barack Obama 7-30-08

        by samddobermann on Mon Jun 22, 2009 at 11:45:18 AM PDT

        [ Parent ]

        •  You just compared apples to oranges. (0+ / 0-)

          Co-ops can be organized around producers/service providers OR consumers, OR both.  

          Ideally, a health care co-op is organized on both ends; that is, you would have member/consumers (those who need health care, and who doesn't?) on one side and, on the other, a "network" of member/service providers (doc's, nurses, hospitals, drug suppliers), with some provision for going out of network.  

          What you compared was the 300,000 butter producers in Land O' Lakes to the number of potential consumers in a health care co-op.  300,000 medical professionals (like the cranberry growers and butter makers, a more-or-less "homogeneous" trade group) would actually be a pretty hefty number of service providers for a health care co-op, and you would expect that, if there was one of that size, there would be many times that number of consumers to support that number of doc's, etc., just as there are many more butter consumers out there than producers.  

  •  Co-ops Not Well Understood, but Deliver Results (1+ / 0-)
    Recommended by:
    southriver

    Bravo, Andrew, for continuing to raise this issue and have it debated instead of immediately derided!  I think one answer to why we don't see more cooperatives can be seen in many of the comments.  They are poorly understood.  If capitalized properly, appropriately regulated and vigorously monitored by their members, cooperatives can deliver tremendous results.  Credit unions and rural electric cooperatives were given substantial boosts by the government to get started and now they provide a valuable, consumer-owned alternative to for-profit enterprise in their industries.

  •  With food you can also buy elsewhere in addition (0+ / 0-)

    to or instead of what the coop carries. And you can buy as much or as little as you want without costing anyone else.

    at prices that sometimes rival conventional competitors

    That implies that prices mostly don't rival others.

    We already have unreasonable gripping that others are "using too much."

    With funerals I would bet you get a limited choice of - well everything. And your payment is limited.

    Most things are fairly simple. Not healthcare!

    Does a prepaid group practice deliver less care than the fee-for-service system when both serve comparable populations with comparable benefits?

    This is not a Coop no matter what it's named. A Group practice means essentially salaried Docs and any thing extra shared.

    And this was freakin 1984 which means the study was done in 83 at the latest. Medicine was a lot simpler then. Nor does the abstract cover what happened in an emergency. Did they have an ER? Did they cover Cancer treatment – which was a lot simpler then? What happened if a patient needed specialists not in the group?

    The number of preventive visits was higher in the prepaid groups but this difference does not explain the reduced hospitalization.

    which is very good and may have reduced the need for hospitalization but the authors dismiss that out of hand. Why?

    They conclude:

    suggests that the style of medicine at prepaid group practices is markedly less "hospital-intensive" and, consequently, less expensive.

    That is undoubtedly true. But that would be impossible to set up today universally.

    This was a small group covering a small area, without the length of time of the study noted. Have you read the whole article? One thing I have learned is the abstract does not guarantee that the whole article would lead you to the conclusions stated in the abstract.

    And it says nothing about medication! Or if psych care was included.

    Medical care has changed radically since 1984. You would not wanted to be limited to the medical care of the day. They hadn't yet gotten human insulin and diabetics were prescribed 1 or 2 shots a day. there were no blood test monitors. All kids getting leukemia died; now we have more than 30% cured.But that is more complicated and expensive than letting them die. I wouldn't trade.

    Most of the drugs and procedures we use now were not around then. And it is not just adding more; it is more complex.

    The number (and rate) of surgeries is most closely associated with the number of surgeons and the number of hospital beds in the area.

    Furthermore this was a small group in an area that was relatively homogeneous at that time. There was NOT open enrollment.

    You say you don't understand my comments above. I was pointing out some of the complexities of setting up a new plan. You don't just announce yourself and set rates. There is a lot of haggling that goes on. What if you had 2 or 3 million dollar babies - and that depleted the coops funds for the year?

    And it can not be self sustaining. Not if you include the poor. Not if it won't cover everyone. Will you force healthy people in?

    Again: Do you want 50 sets of these complexities or one? 40? 30? 10? or 1.

    With the public plan we would not do away with the 200-300 different plans but they will just manage themselves as they have been doing. The public plan WILL need subsidies. It will need to be there for the sickest and the poorest.

    You say some silly things that I don't want to argue here but Medicare is in trouble because of the unbriddled practices of doctors and hospitals. And now rules payment practices and oversight are needed. But the main reason it's going broke is that the Republicans (with Democrats help) added the privatized prescription plans onto it WITHOUT providing a funding source. And then they dumped all covered by Medicaid into it. The prescription plan was set up in order to kill Medicare.

    There is a way to limit hospitalizations. It's being done now. If you are not lucky enough to have a big employer plan or enough money to buy really good non-rescission–able insurance or money to pay out of pocket, you don't get hospitalized. Until you are dying. Then the cost care falls on those who have insurance and the government.

    This study is NOT supporting Coops. It is about group practices which can be bad or good. It does not cover a full range of services which a public plan substitute would need to do.

    Andrew, you (and many others) have no clue what is involved in the complete range of health care. I have studied this extensively and I don't understand it fully but it is way more complex than you imagine.

    We are in a time where it is risky NOT to change. Barack Obama 7-30-08

    by samddobermann on Mon Jun 22, 2009 at 11:25:13 AM PDT

    •  complexities (0+ / 0-)

      Thanks for lending your insights. I appreciate that you are familiar with the Rand study that I cited, and that you referred to it. I'm all for evidence. I have read the study (as published in NEJM at http://content.nejm.org/... , which referenced a more comprehensive report) and I would like to know more about your objection re. the lack of open enrollment. Is it because the lack of growth would make the system stronger or otherwise unrepresentative?

      Admittedly, I was not clear enough about how I described the study, which was more about the savings from delivering services in-house, than about the organizational structure of the house. Even so, the fee-for-service experimental groups were in conditions that are much like a typical insurance environment. What I should have made more clear is that the co-op proposal seems to be only for creating cooperative insurers. There would still be some savings do to the profit skimmed off in an investor-owned firm, but not as much as the 25% cited.

      One thing I found curious was that the group that paid a higher share (the 95% group) also had more ambulatory visits than the free fee-for-service group. It's off topic, but I wonder what you make of this counterintuitive detail?

      I'm fully aware of how different things were then. But I'm also aware that the basic market forces are pretty similar. For fresher research, you might check out this study released last week: http://sev.prnewswire.com/... It was apparently an internal study and they don't seem to have posted any further information. But I doubt that they would put out this press release without something to back it up. I have a call in requesting more information, and I'll post whatever I learn.

      You raise a good point, but I think your condescending tone is a bit unfair. I do have a bit of a clue, although I've never represented myself as a medical industry expert and admitted my errors when I've made them. You'll notice that I'm calling for expert study, and not claiming to be that.

      I'm aware that health care is a horribly confusing mess. I was involved in trying to start an informal cost-sharing co-op a few years back (like the Ithaca Health Alliance: http://ithacahealth.org/ ) so I've dipped my toes in these turbulent waters and generally found them not to my tastes. I just chose to plunge back in because of the rampant unsupported (and often false) claims that I've seen.

      A big part of my motivation for blogging is to get real experts like Drs. Reich and Hacker to tell us the basis for their apparently hasty conclusions (reached before the draft proposal was released). Meanwhile, I welcome your input, and would be grateful for any sources you can provide about how the increased complexity means that co-ops are not (or less) feasible.

      •  New Group Health Study (0+ / 0-)

        I just heard back from Group Health, and they said that study hasn't been peer reviewed so they can't release it. However they referred me to this study from the Commonwealth Group: http://www.commonwealthfund.org/...

        I haven't read it yet, but during a quick skim I noticed mention of another report: http://www.commonwealthfund.org/...

        And while looking for that I found a paper on HealthPartners, which has also been mentioned as a model for co-op health care: http://www.commonwealthfund.org/...

        At first glance, these reports don't address ownership (private vs. public vs. co-op). However, they do call for integrated systems, which could be built by insurance co-ops as they mature. This system could also be built privately, but I'm not sure that's what we want. And of course, the government could build it. But that gets us back around to nationalized health care, for better or worse.

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