WHY HEALTH CARE "CO-OPS" WON´T WORK FOR AMERICA

And the GOP has jumped all-over this CO-OP concept.

First, let´s define just what a "Health Care CO-OP" actually is….?

Democratic Senator, Kent Conrad from North Dakota, has proposed the CO-OP Health Care approach.

The Senator has defined the concept as: "The creation of 50 separate cooperatives, one for each state. Each cooperative would be nonprofit, run by a board of directors elected from within the ranks of co-op members. They would essentially act as self-insurers, meaning premiums paid-in by members would cover the cost of claims.

The theory is that co-ops would be able to offer health insurance at lower costs for individuals and small businesses. These are the ones who today must pay some of the highest rates for commercial insurance. They would instead, create larger risk pools while states with smaller populations could join with nearby states to form regional alliances and larger pools of members."

What brought on this idea was due to two existing, successful, nonprofit health-care cooperative models. Group Health and Health Partners. Both organizations are nonprofit HMOs based in Seattle and Minnesota´s "Twin Cities", respectively. Both co-ops have solid reputations in the health care world, offering high-quality care at costs lower than those on the commercial, "for profit" health care market.

They do this by offering both health insurance and health services. Each HMO has its own network of staff physicians and free-standing hospitals and clinics. This allows both HMO´s to integrate and to have better cost controls.

Please note that this is a smaller approach for these specific, two city regions. But the concept for a state CO-OP would be at a major disadvantage, and any large, state-based health-insurance cooperatives would have no chance of replicating what the city CO-OP´s have done.

Of course, the GOP has jumped all-over this idea.

And some of the "spending-wary Democrats" are starting to scale back their initial "single-payer" proposals. And this is all despite the fact that recent polls show that 72% of all Americans (87% of all Democrats) support the creation of a real public health plan as an alternative to the current private insurance plans.

Even if a CO-OP concept idea were to be agreed upon, in the beginning, the US Government would still have to play a very big role. According to a Washington insider, Congress would have to provide at least $3 billion to $4 billion (probably more like $10 Billion) in start-up money for set-up costs and initial capitalization.

And on top of everything else, as of today, there has been no public debate on this concept and there is little knowledge about how health cooperatives could be established. That is not to mention what they would cost, how many people they could insure and how they would bring down the overall cost of health care.

But even with all of these deep, empty holes, the Senate Finance Committee appears to have tentatively signed on to idea of the CO-OP concept and an outline of a plan, drafted by the powerful finance panel, included a proposal for such cooperatives.

However, other than the aforementioned two successful small CO-OP´s, the past history of large nonprofit HMOs is full of many past failures.

In the 1990s, a nonprofit HMO in the Washington DC area called Group Health Association (GHA) was forced to sell itself to Humana, a private insurance company. This occurred after GHA´s finances deteriorated to the point of insolvency. GHA, which had approximately 130,000 members, was plagued by falling membership rolls, striking staff doctors and nurses and competition from other HMOs.

Before being acquired by Humana, GHA attempted to transform itself into a "for-profit HMO" to stop the bleeding. A partnership between two nonprofit HMOs in New York, is currently seeking state approval to do the exact same thing; turn itself into a for-profit company for raising capital.

In a recent article in Time Magazine by author Kate Pickert, she states: "According to Jacob Hacker, a political science professor at the University of California, Berkeley, rural health cooperatives established after the Great Depression were disbanded, in part, because they were badly managed and were opposed by the physician community, the same factors that spelled death for GHA. "The history of cooperatives is that it's very hard to set these things up, and while we're trying to set them up, there's not going to be accountability and pressure [on private insurers]," says Hacker. "They would be weakest when they're most needed — at the outset." In addition, cooperative health policies would not be portable, meaning if you had one and moved to another state, you would need to drop coverage and enroll elsewhere. Rates could also vary dramatically, depending on regional differences in health costs and the size and makeup of co-op pools."

Ms. Pickert went on to say: "Assuming state-based health co-ops could offer lower premium costs by being nonprofit and creating large risk pools, an equally crucial question is when they would be created. Even with federal seed money, setting up 50 co-op boards, signing up enough members to make each co-op viable and establishing administrative systems to set premium rates and pay claims would not happen overnight. "The principle of eliminating some of the profit motive and placing it with the motive to get value out of care is a good principle," says Karen Davis, president of the Commonwealth Fund, a nonpartisan health-policy think tank. "But there are a lot of ifs, and it's not a strategy for a nation in an economic crisis [like the US today] when we need a solution soon."

The reality is that health care needs to be looked at in America as being a part of our Declaration of Independence and the US Constitution.

The "Declaration" says that we have "unalienable rights" that include; "Life, Liberty and the Pursuit of Happiness". And the "Constitution" says that as American citizens, we will be able to be, "insured of domestic tranquility" and that the document would "promote the general Welfare".

"Health care for all" was obviously not a specific issue to be considered over 230 years ago for either of these documents. However, today it would be difficult to NOT agree that having good health care for the time that we are here on this earth, would have qualified for our founding fathers as an "unalienable right" for all Americans. That is, "if" back then, they had had the availability of today´s modern health care.

These documents today are referred to as "Living Documents", and it´s time for the US to up-date the concept of America´s "founding documents" and to come up to the equal of all the other industrial countries where health care has already become an "unalienable right" for all of their citizens.

Copyright G.Ater 2009

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