Senate Considers Alternative to Public Healthcare Option

by Kent Garber

To get a glimpse of the possible future of American healthcare, a good starting point might be England, 1844.

That year, some British laborers got together and opened a small store in which they sold butter, oatmeal, and other goods. Their goal was not to make money but to create a way to buy food in bulk at cheaper prices.

The store was a success, giving rise to a global explosion of what are known as cooperatives, or co-ops. In the United States, co-ops have formed to sell everything from electricity to agriculture to healthcare, and the model is rapidly gaining traction among moderates in Washington as politicians struggle to complete healthcare reform.

Until recently, the healthcare debate has focused on a government-run insurance plan. But last week, that changed as word leaked that the Senate Finance Committee's bipartisan group of six senators, led by Max Baucus, a Montana Democrat, and Chuck Grassley, an Iowa Republican, has chucked the public plan in favor of something else: healthcare cooperatives. While negotiations on the overall healthcare plan are continuing, the idea seems to have the backing of many moderate Republicans, whose votes will determine whether healthcare reform is a partisan or bipartisan affair.

There's also some interest in the House, although the political deal reached lastweek between House leaders and fiscally conservative "blue dog" Democrats sticks with the public option.

But what exactly are health co-ops?

A few exist in the United States, and they share some basic features with their 1844 ancestor. They are nonprofits, and, like for-profit companies, they sell insurance, but they also tend to own hospitals and clinics, acting in some ways as a one-stop shop for healthcare needs.

"You really do hear the voice of the consumer with co-ops," says Karen Davis, president of the Commonwealth Fund, a widely respected national foundation that specializes in healthcare.

"A lot of their initiatives to slow the growth of their premiums come straight from their members."

One of the most successful cases is HealthPartners, which covers more than a million people in Minnesota and Wisconsin. It started in 1957, and Donna Zimmerman, who oversees HealthPartners' government policy, says it provides better care at cheaper prices than competitors, in part because it's run by the same people who pay for its services.

There are data to back her up.

A June study by Commonwealth Fund researchers found that HealthPartners has cut tobacco use among its members at twice the Minnesota state rate, in part because the co-op has instructed doctors to help patients find ways to quit.

Since 2002, the co-op has made a deliberate effort to shift from prescribing brand name drugs to generics, saving, in total, tens of millions of dollars. It's also put in place programs that identify high-risk patients -- smokers, obese people, etc. -- before they have major problems and financially reward them if they go to educational sessions.

Policy people in Washington face a big, difficult question:

Can health cooperatives be a national solution, or are they just a weaker alternative to a public option?

The Senate Finance Committee's draft plans call for setting up a national network of co-ops, maybe one in each state or at least one in every region of the country.

But Davis calls that plan "high risk."

For one thing, several efforts to start co-ops have failed, largely because of pressure from for-profit competitors.

New co-ops will need billions of dollars from the government to get started, as well as a guaranteed large customer base. Because of these challenges, health co-ops exist today in only a handful of places; HealthPartners owes at least some of its success to Minnesota's supportive healthcare laws.

A public option, on the other hand, could start up faster and be more powerful. But for many, it's also politically a nonstarter.

 

Reader Comments

The United States does have the best healthcare available in the world, but only for the people who can afford it.

That does not translate to having the best healthcare system in the world. Understanding this difference is key. One can say that a Ferrari or Porsche is the best car in the world, but it doesn't help anyone who is not driving one of these unaffordable cars. Let us all understand that the "best" stuff is not available to everyone, and that is exactly the point of this reform.

Comment by Mike C. of TX

 

Social Security and Medicare are government programs that are broken.

Politicians have been dipping into these accounts since their inception. But what they have shown us is that they cannot manage our money.

In case they haven't noticed we are in a recession and people have lost jobs and are having a hard time finding new ones because there is no incentive for business to grow or expand.

It's quite the opposite with all that is going on between national healthcare and cap-and-trade. The incentives are being offered overseas, not in this country. No one is in business not to make money and they will uproot and take off before the government soaks every last penny from them.

This is about government control and the only ones that will be the losers are American citizens.

Comment by Sue of IL

 

The particulars of healthcare reform are irrelevant. What matters is the cost of $1 trillion to $1.5 trillion over 10 years.

The country is in a deep recession and there is not a trillion dollars available for new spending. It makes about as much sense as an individual that is out of work thinking it is a great time to buy a new home. Increasing taxes to pay for this extraordinary spending will have nothing but negative economic consequences and must be avoided.

Comment by Bill Weronko of IL

 

I am wealthy and with the best health insurance money can buy. I will probably pay additional taxes to subsidize universal health insurance with a public option.

Why do I want universal health insurance?

Because there is nothing special about me that justifies me having good reliable health coverage while others don't. Because every man, woman, and child should know that they are not alone if they have to battle serious illness. Because it is the right thing to do.

Why do I want the public insurance option?

Because with it the number of people involved in government health insurance programs will allow the government to bargain for less expensive quality health services. That will bring the cost of healthcare down.

Comment by Janet of VA

 

The American Medical Association has long desired to maintain rationed healthcare in order to keep supply shorter than demand.

While physicians deserve to be rewarded for work, let's not pretend that the current system is a "free market" system.

Insurers, providers, and practitioners collude to keep prices high, deny coverage to tens of millions of Americans, and force citizens literally into bankruptcy at the first illness.

The current blood money system must be destroyed.

A new system that provides basic and emergency needs must be made available to all citizens. Healthcare is rightfully a national responsibility. The only people who wish to ration it are those whose pockets are lined by this artificial shortage.

Comment by Tony R. of NC

 

It is always those who have health insurance (at least today) who oppose others having access.

It is interesting to see the importance of an "insider" for so many Americans. To be an insider there must be those who are outsiders.

Kind of like immigration. Those who are Europe's descendants and hell bent on keeping others out -- even those who were born on this continent both the north end and the south end. Maybe more of Congress needs to be replaced for not having the backbone to do what is in the country's best interest.

Comment by Christine of MD