Health Cooperatives Are Not the Answer
Their poor record has not stopped the Senate Finance Committee from putting forth $6 billion to help restart them.
The media and government policymakers are abuzz over the possibility of health cooperatives replacing the public option in the current health care reform debate. Earlier this month Hudson Institute convened perhaps one of the only public forums to discuss the pros and cons of such a proposal. Left and right agreed that health cooperatives are not the answer for health care reform.
Even the neutral Congressional Budget Office, in their recent score of the Baucus health proposal, agrees: “The proposed cooperatives had very little effect on the estimates of total enrollment in the exchanges or federal costs because, as they are described in the specifications, they seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments.”
The biggest problems with cooperatives relate to structure. According to Robert Rosenberg — former CEO of the first health cooperative in Washington, D.C., Group Health Association (GHA) – reasons for his organization’s failure included internal problems such as naïve management, inability to secure investment capital from banks, the entrenchment of unions, and the costs imposed by a high option model. In addition, external forces such as the onset of competition in the 1980s from large national groups such as Kaiser Permanente, constraints of the structure of health care, and lack of competitive edge to control hospital costs also helped doom the GHA. While health cooperatives can be successful — as evident from health cooperatives in Washington State, Idaho, Minnesota, and Wisconsin — they aren’t a promising model upon which to build a national network for improving access to health care throughout the United States.
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Kacie Marano is the Executive Assistant at the Center for Science in Public Policy; Jeremiah Norris is the Director of the Center for Science in Public Policy.
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4 Comments
1. Eric:Although I sometimes enjoy reading all the articles discussing this or that aspect of the health care debate we must always keep one thing in mind, the Democrats goal is NOT to increase coverage, lower costs, or in any way improve the health care system in this country. Their goal is to take it over in order to increase their control over We the People. All the alternative options they float in order to gain a little more support from Blue Dog Dems and Liberal Repubs is simply cover. Progressives NEVER take their eye off the ball. They just take what they can get and ask for more later. ANY compromise on health care that gives them one iota of what they want is merely one step closer for them to their ultimate goal of a single payer government run system.
Obama has said so, Pelosi has said so, Shakowski has said so, and countless others have said so. Why would any rational, liberty loving person give these socialists an inch? Just say no.
The only answer is the market and the reduction of government intervention and manipulation.
Oct 24, 2009 - 9:28 am 2. JP:Apparently, we must always keep one crazy, untenable canard in mind.
Oct 24, 2009 - 11:09 am 3. goy:What’s desperatedly needed is government reform, not health care reform.
Every attempt by government to meddle in health care has produced conditions that cause health care costs to rise at successively accelerating rates well beyond inflation, going all the way back to Medicare, continuing with HMOs and then with tax incentives for group comprehensive health care coverage. The trend is clear.
The government created the current ‘crisis’ by systematically destroying the free market for health care, forcing costs to skyrocket to the point where even routine care is excessively expensive, and conditioning Americans to conflate health care and fully-paid, comprehensive group insurance. Health care and “coverage” are not the same thing.
As Einstein’s observations regarding insanity prescribe, the problems created by government meddling in health care will not be resolved by more government meddling in health care. We must work to restore the free market in health care and bring the costs of routine health care back into equilibrium with other routine costs of living. That is the key. Increasing dependency on government is social suicide.
Oct 24, 2009 - 12:51 pm 4. goy:What’s desperatedly needed is government reform, not health care reform.
Every attempt by government to meddle in health care has produced conditions that cause health care costs to rise at successively accelerating rates well beyond inflation, going all the way back to Medicare, continuing with HMOs and then with tax incentives for group comprehensive health care coverage. The trend is clear.
The government created the current ‘crisis’ by systematically destroying the free market for health care, forcing costs to skyrocket to the point where even routine care is excessively expensive, and conditioning Americans to conflate health care and fully-paid, comprehensive group insurance. Health care and “coverage” are not the same thing.
As Einstein’s observations regarding insanity prescribe, the problems created by government meddling in health care will not be resolved by more government meddling in health care. We must work to restore the free market in health care and bring the costs of routine health care back into equilibrium with other routine costs of living. That is the key. Increasing dependency on government is social suicide.
Oct 24, 2009 - 2:46 pmBTW I love your blog!