RSS Feed MenuHealth-care cooperatives seem the big coming idea in the Senate version of healthcare reform. Last month, the Heritage Foundation offered 7 key principles to ensure that co-ops do not become a disguise for a government-run plan. These principles make more sense today than ever:
- Cooperatives must be voluntary, open to individuals who choose to freely join together without coercion or restraint, and controlled by its members, not the government;
- Cooperatives must be viable on their own and must not receive anti-competitive government support in any form including assumption of risk, “start-up” capital, or continuous subsidies to the organization–which would turn them into government-preferred public plans;
- Health plans must be selected only by a co-op’s members, not the government;
- Competitiveness must be based on the member strength of the cooperatives and not on any favored status, including government subsidies, access to government pricing, coverage or coding decisions, or regulatory intervention;
- Any necessary regulation to keep a level playing field among health plans must be reserved for the states;
- State reforms should open doors to competition, including the competition that cooperatives would bring; and
- All individuals–including those who receive public subsidies and individuals eligible for Medicaid or SCHIP–should be free to join cooperatives of their choice.
Principle 2 is especially urgent. The rule in healthcare is the same as in everything else: To help the poor, always subsidize the CONSUMERS of a public service, never the PROVIDERS.
midcon // Jul 29, 2009 at 9:47 am
I disagree with principle 5 – “Any necessary regulation to keep a level playing field among health plans must be reserved for the states;”
unless… the pool of insured are residents a specific state and the providers operate only in that state. We do not need a 50 state mish mash of regulation when the providers engage in interstate commerce. While there may be regional nuances that should be considered I believe in and want federal regulation of the basic functionality of co-ops. States are free to incentivize competition as they see fit to meet their citizens needs but we need a federal framework to achieve a certain level of consistency.
liv&win // Jul 29, 2009 at 2:01 pm
re:principle 5 midcon: with the exception of a dozen or so geographically indistiquishable areas (Vancouver Washington, Tahoe Nevada, Kansas City Kansas and most of commuter New England to name a few) all health care is local. Only in rare instances does one travel out of state to get health care. Rare examples include ‘centers of excellence’ which health plans have already established to treat specific disease in specialized settings.
By the way, I also think the co-op formula is a perfect alternative to the public school system.
midcon // Jul 29, 2009 at 3:12 pm
liv&win – I agree that health care is mostly local (Mayo Clinic and others notwithstanding). However, health insurance, in my experience, is not local. In it’s narrowest form, it is regional. There is no need for United Health Care, Blue Cross/Blue Shield and others to be subjected to 50 different sets of regulation.
The c0-op system, as a model, could have many applications across our society. Homeowners Associations (HOAs) is a kind of a co-operative. So are communes, Amish societies, some religious orders and other forms cooperative communities are all examples of co-ops that provide and efficient and effective means of deliver benefit to a larger group. I’m not a fan of communes, but being from California, to each their own!
MFarmer // Jul 29, 2009 at 3:52 pm
I have a feeling that whatever is passed is going to be a red herring to allay fears of government overreach, and that it will be manipulated for eventual government control. Something like Fannie and Freddie.
liv&win // Jul 29, 2009 at 4:34 pm
Midcon: Oh, we’re talking health INSURANCE, not health CARE. Well, yes, health insurance regulations are ridiculously complicated by the fact that they are legislated by the states. Health Care too is regulated at the state level, but ironically I am OK with that. But we are at a toss up because of the state’s rights issues.
dragonlady // Jul 29, 2009 at 10:13 pm
The problem is once you accept govt money, it’s only a matter of time for the govt to sooner or later get their hooks into you, like MFarmer said (Fannie and Freddie). Unless the law is written exactly as Heritage proposes above (which I doubt it will since the GOP is out of power).
Midcon, while I may be persuaded on some broad form of federal regulation for health care, the states are supposed to be our laboratories. Rural health care and urban health care requirements are vastly different. Why are you presuming the federal govt knows health care requirements better than the states?
midcon // Jul 30, 2009 at 8:58 am
dragonlady, I don’t presume the federal government knows health care better than the states. However, I was referring to health insurance regulation vice health care, because most of the health care insurance industry operates across state lines and I am sure you understand how a plethora of regulations regarding insurance could cause inefficiencies and additional costs. States should be free to provide, promote, and control the delivery of health care. My concern is primarily on the financial end of it. I know that cost does affect delivery but we need a common framework across all states. Remember our society is much more mobile than decades ago. For instance, I spent many years in California and now I am living in the Washington DC area. I was able to keep the same insurance because I selected a national insurance plan (because I worked for federal government). Rural and urban health care do have different needs but United Health Care operates in both rural and urban settings and I do not see the need for 50 states to issues insurance regulations that affect UHC.
barker13 // Jul 30, 2009 at 3:39 pm
FYI –
http://online.wsj.com/article/SB10001424052970204619004574318474224065070.html
BILL
dragonlady // Jul 30, 2009 at 4:10 pm
midcon, like I said, I can be persuaded the federal govt may need to issue some broad guidelines for the health insurance industry so I don’t think we’re too far apart on that. And yes, I understand how over-regulation can actually drive up the cost of insurance. But states should be allowed to implement specific regulations (or not) if they want, as long as it does not run contrary to fed govt regulation. B/C insurers operates across several states, I can see the case for the fed govt stepping in due to the commerce clause in the constitution. I’m fine with making health care more portable since we are more mobile society. But what I’m saying is we just can’t take the states’s ability away to pass laws and regulations if an insurer. That is what I meant.
Donald Johnson // Jul 30, 2009 at 11:49 pm
Conrad Coops won’t work, as I’ve blogged at http://www.businessword.com. Ag and electricity coops are not role models for health coops. The health insurance biz is just too complicated to be run by “elected members’ (think school boards). A national network of Conrad Coops would evolve into a single-payer Government HMO.
Note that the WSJ editorialized against the Conrad Coops today and warned they would be new Fannie Meds.
midcon // Jul 31, 2009 at 9:42 am
dragonlady, then we do agree. Of course the devil is in the details, so I would not accept or dismiss a Co-Op out of hand but properly structured it could work.
I read the WSJ piece as well as the Conrad piece. Both claim that Co-Ops won’t work because they would be structured like other Co-Ops. Ok, so what if they are not structured like other Co-Ops? Is there only a single definition of cooperative arrrangement to achieve an end result?
Second argument – Co-Ops can be politicized. Yes, depending on how they are structured they could be politicized. One would think that we could develop a structure that would be somewhat immune to that – such as we had to do with military bases (BRAC).
Third argument – Co-Ops will lead to or are a public option in disguise. Well, a rose by another name… We already have a public option (Medicare, Medicaid). The bottom line is the current administration intends to insure millions of Americans who are not currrently insured. The simple fact is that if the private health care industry had ability to do that before now, it would have been done and they would have gotten the government to pay them to do it. The only other alternative is to ignore the issue (don’t insure those currently uninsure) or pay the uninsured directly (tax breaks, incentives, etc) and then force them to buy insurance. Well, I trust those individuals a lot less than I trust the government and direct payments/subsidies to individuals is simply income redistribution with little to no control. If the government is going to spend my money, I want some accountability.